August 2019 Update
California Rules of Professional Conduct
The California Rules of Professional Conduct have been revised and renumbered, effective November 1, 2018. Note that the California Supreme Court denied the request to approve proposed Rule 1.14, regarding a lawyer’s obligations in representation of clients with diminished capacity. See §7.62.
Summarized below are other developments included in this update since publication of the 2018 update.
Chapter 1: Introduction: Issues in Estate Planning and Family Law
Parentage presumption. The Uniform Parentage Act (UPA) (Fam C §§7600–7730) has been amended to “[e]nsure that the parentage provisions of the Family Code treat same-sex parents equally, including the conclusive marital presumption of parentage in Section 7540 of the Family Code, and for parents who conceived children through assisted reproduction, to establish their parentage through a voluntary declaration of parentage” and to “[u]pdate the genetic testing provisions to match current scientific requirements, apply gender neutrality, and codify case law regarding the relevance of genetic testing in cases involving multiple claims of parentage.” Stats 2018, ch 876, §1(b). The amendments are effective January 1, 2019, but some amended sections—e.g., Fam C §7571, regarding voluntary declaration of parentage—will not become operative until January 1, 2020. Stats 2018, ch 876, §29. In the Probate Code, the treatment of same-sex and opposite-sex couples for parentage in intestate succession situations is also equalized. For example, “father” becomes “parent” and “paternity” becomes “parentage.” Prob C §6453. Clear and convincing evidence of parentage, for the purposes of establishing a parent and child relationship, may include genetic DNA evidence acquired during the parent’s lifetime if it was impossible for the parent to hold out the child as the parent’s own. Prob C §6453(b); Stats 2018, ch 116, effective January 1, 2019. See §§1.16–1.17.
Adoption. In Estate of Obata (2018) 27 CA5th 730, the court found that the Japanese practice of yoshi-engumi constitutes a legal adoption under Prob C §§6450–6451; thus, the 1911 adoption severed the relationship between the decedents’ father and his biological parents, thereby precluding intestate inheritance by the descendants of his biological parents. See §1.17.
Registered domestic partners. New Rev & T C §62(q) excludes from the definition of “change of ownership” any transfer between local registered domestic partners occurring on or after January 1, 2000, to June 26, 2015. Local registered domestic partners may apply for reversal of reassessments in violation of this subsection. Stats 2018, ch 919, effective September 29, 2018. See §1.14. See also §4.112.
Chapter 2: Premarital and Preregistration Agreements
Fraudulent transfer. In Sturm v Moyer (2019) 32 CA5th 299, a case of first impression, the court held that the Uniform Fraudulent Transfer Act (UFTA) (former CC §§3439–3439.12), the predecessor to the Uniform Voidable Transactions Act (UVTA) (CC §§3439–3439.14), can apply to a premarital agreement in which the prospective spouses agree that on marriage, each spouse’s earnings, income, and other property acquired during marriage will be that spouse’s separate property. Whether the Act does apply depends on whether there was actual or constructive fraud under CC §3439.04, which is a factual question. See §§2.10, 2.48, 2.49. See also §3.71.
Chapter 3: Issues During Marriage, Registered Domestic Partnership, and Cohabitation
Joint title community property presumption. In Marriage of G.C. & R.W. (2018) 23 CA5th 1, involving the couple’s residence, the court held that reimbursement ordered for the separate property contribution under Fam C §2640 may not include an amount for appreciation of the property during marriage. The value of the appreciation is a community asset and must be divided equally on dissolution. See §3.59.
Methods of apportionment. In Marriage of Brooks (2019) 33 CA5th 576, the court held that the community was adequately compensated by husband’s salary during marriage, so husband’s business interest (and stock appreciation) remained separate property. See §3.63. See also §5.10.
Transmutation. A “trust transfer deed” that used the words “grant” and “gift” did not unambiguously indicate a change in character or ownership of real property and did not satisfy the express declaration requirement because it did not include an express statement specifying what interest in the property was granted to wife. Hence, the residence was not wife’s separate property. Marriage of Begian & Sarajian (2018) 31 CA5th 506. See §3.67.
On the other hand, in Marriage of Kushesh & Kushesh-Kaviani (2018) 27 CA5th 449, the court found that an interspousal transfer grant deed satisfied all transmutation elements, given that the “interspousal” deed “grant[ed]” or conveyed to wife an interest in a condominium “as her sole and separate property” in writing. On remand, the trial court must determine if the transfer gave wife an unfair advantage over husband. See §3.68. See also §2.40.
Liability for debts. In Marriage of Marshall (2018) 23 CA5th 477, the court held that a capital gains tax liability was a community debt to be divided between the parties in their dissolution action. The state court is not bound by the IRS or FTB “innocent spouse” determination. See §3.73.
Chapter 4: Issues at Dissolution or Legal Separation
Equal division of assets and debts. The general rule is that the trial court must value the community assets and liabilities “as near as practicable to the time of trial.” Fam C §2552(a). However, in Marriage of Oliverez (2019) 33 CA5th 298, the court of appeal found no abuse of discretion when the trial court set the property valuation date at the date of remand after appeal according to principles of equity. See §4.78.
Chapter 6: Retirement Benefits and Other Deferred Compensation
ERISA preemption. In Sveen v Melin (2019) ___ US ___, 138 S Ct 1815, the Supreme Court resolved a split of authority among the circuits over whether the contracts clause (US Const art I, §10, cl 1) prevents a revocation-on-divorce statute from applying to a preexisting agreement’s beneficiary designation (here, a life insurance policy) and following Lazar v Kroncke (9th Cir 2017) 862 F3d 1186 (applying Arizona law; when ERISA was inapplicable, state’s revocation-on-divorce statute was not preempted by federal law and former spouse not entitled as IRA beneficiary). See §6.137.