June 9, 2023

Distribution from an Estate or Trust

When one party gifts property to another, it is typically a quick process. For instance, a father says to his son, "the car is yours, here are the keys to your dream car, a 1996 Suzuki X-90." The father then hands the keys to his son and the son drives off in his fabulous 1996 Suzuki X-90. Or, a mother says to her daughter, "here is your grant aunt's antique Omega constellation watch which I inherited decades ago and now the watch is yours" and then hands her the watch.

However, enforcing a future gift can be a complicated endeavor. A recent unpublished appellate opinion focused on a daughter attempting to enforce a gift her father had allegedly promised her that would take effect upon his passing.

"Appellant Kelley Dupree claims her father gifted her a piece of real property during his lifetime but held the legal title for her benefit. Almost three years after her father died, appellant filed a petition seeking an order directing his estate to transfer legal title to her. The probate court sustained the demurrer of respondents David Yoder, William Yoder, and Tracey Leachman (respondents) without leave to amend, finding appellant's claim was time-barred by Code of Civil Procedure section 366.3, which sets a one-year statute of limitations for claims seeking distribution from an estate based on a promise or agreement by a decedent."

"Section 366.3 provides that a claim arising from "a promise or agreement with a decedent [for] distribution from an estate or trust" must be brought "within one year after the date of death." (§ 366.3, subd. (a).) The issue in this appeal is whether section 366.3 bars appellant's petition to convey title to property held by the decedent at the time of his death because appellant failed to bring that petition within one year of the decedent's death."

"In light of the facts alleged, this case presents a relatively straightforward question of statutory interpretation: Is a petition to enforce a promise to convey legal title upon death a claim for a distribution from an estate or trust within the meaning of section 366.3? We conclude that it is."

The appellate court upheld the trial court's decision.

The rationale for imposing a 1-year deadline to bring a claim against an estate or trust for a distribution is to ensure the orderly administration of estates. For example, assume the decedent's house was sold during probate. Years later, a party brings a claim against the estate, alleging that the decedent promised him the home upon his death for being his caretaker at the end of his life. During this period, the house has been sold multiple times. If the claimant were successful, multiple transactions would need be unwound in a very messy process.  

Estate of Yoder, Shasta County Superior Court case #29522