May 30, 2024

Promise of an Inheritance

Probate Code §366.3 provides that a party has one year to file a claim to enforce a promise or agreement made by a decedent regarding a distribution from an estate or trust. A recent unpublished appellate opinion involved the applicability of Probate Code §366.3 to the case's particular facts.

"Between the 1960s and the 1980s, decedent Junichi Frisco Yamasaki made repeated oral promises to leave his entire estate to his two sons, petitioners Daniel and Gene Yamasaki, in exchange for their financial support. In the 2000s, after a falling out with his sons, Junichi executed a will and a revocable living trust, through which he completely disinherited his children. In 2012, Junichi amended his trust, naming his long-time girlfriend and new wife, Reiko Nakazawa, as the trust's trustee and the primary beneficiary of his entire estate."

"Around late January 2013, Junichi was hospitalized, and later moved to a nursing facility, after his health deteriorated.

In April 2013, Gene drafted a new lease agreement for the Whittier Laundromat (Amended Lease). The Amended Lease named Junichi as the landlord and Gene as the tenant, and it provided that Gene would pay Junichi $500 per month for a 10-year term. The Amended Lease included two options, allowing Gene to extend the term of the lease for an additional 10 years. The Amended Lease also included an option allowing Gene to purchase the Whittier Laundromat for $5,000 at any time during the initial 10-year lease term or the extended terms. On April 15, 2013, Junichi signed the Amended Lease. Nakazawa signed the agreement as a witness to Junichi's signature.

Nakazawa later testified that she did not review the Lease and the Amended Lease, or otherwise understand what they were, before she signed them."

"In April 2013, Nakazawa filed a petition to be appointed as Junichi's conservator. Nakazawa alleged Junichi had been diagnosed with dementia, a heart condition, and macular degeneration and, as a result, was incapable of caring for himself, including his financial affairs. Nakazawa also alleged that Junichi never read or understood the Lease and the Amended Lease before he signed them. In December 2013, the trial court granted Nakazawa's petition.

In August 2014, Gene filed a petition to confirm the Lease and the Amended Lease under Probate Code section 850, subdivision (a)(3)(A) (Lease Petition).

In July 2015, Junichi died.

In September 2016, the court denied the Lease Petition, finding the Lease and the Amended Lease were unenforceable because Junichi suffered from dementia when he signed them and, therefore, lacked the capacity to enter into the agreements.

In December 2016, over a year after Junichi died, Daniel and Gene filed another petition under Probate Code section 850, subdivision (a)(3)(A), which sought to enforce Junichi's oral promises to leave them his estate when he died."

"In July 2021, the court issued a 23-page statement of decision. As a preliminary matter, the court found the brothers' claim to enforce Junichi's oral promises was barred by Section 366.3's one-year statute of limitations because they filed their petition more than one year after Junichi died."

The California Court of Appeal affirmed the trial court's decision.

Yamasaki et al. v. Nakazawa, Los Angeles County Superior Court case no. BP148064