July 29, 2004

Devries Column

Spouse may have claim on ‘pay on death' account funds given away during lifetime


This week's question: 
I just found out that my wife has been siphoning off money from our accounts and putting the money into a pay-on-death account of her special friend. This has been going on for years. Of course, this was done without my knowledge or consent, written or oral. She refuses to do anything about it. What if she were to die with this unresolved? Is there anything I can do? 

Jerry J.
Almaden Valley 

Dear Jerry: 
I think you may be able to do something, Jerry. Of course, you will want to consult with your own attorney, but in the meantime, this may help. Prompt action is essential. 

A recent case dealt with this issue. It is entitled Estate of Raul Miramontes-Najera, Deceased, and the case itself was between Evangelina Miramontes and Silvia Lizarraga Preciado. It was decided May 13, 2004 in the Fourth District Court of Appeal, State of California, and the citation is: 04C.D.O.S. 4117. 

Evangelina and Raul were married in Mexico in 1956. They were married to each other until Raul died in October 2000, in San Diego. 

Beginning in June 1998, and without Evangelina's consent, Raul transferred about $803,000 in community property funds into nine bank accounts payable on death to persons other than Evangelina. He transferred $100,000 into each of two money market accounts payable to, respectively, the minor children of Silvia Preciado (Silvia), Silvia Lizarraga (young Silvia) and Adolfo Lizarraga and transferred $3,000 into a deposit certificate payable to young Silvia. 

In addition, Raul created six other accounts payable to other third persons, consisting of $100,000 deposited into a money market account and nearly $500,000 placed in five certificates of deposit accounts.  

Of course, Evangelina was not very happy about this and filed a court action to deal with it, since she did not agree to give her half of the community funds away. She filed a petition under Probate Code §5021, entitled Proceeding to Set Aside Nonprobate Transfer. This law provides as follows: 

(a) In a proceeding to set aside a non-probate transfer of community property on death made pursuant to a provision for transfer of the property executed by a married person without the written consent of the person's spouse, the court shall set aside the transfer as to the nonconsenting spouse's interest in the property, subject to terms and conditions or other remedies that appear equitable under the circumstances of the case, taking into account the rights of all interested persons. 

(b) Nothing in subdivision (a) affects any additional remedy the non-consenting spouse may have against the person's estate for a non-probate transfer of community property on death without the spouse's written consent. 

Evangelina petitioned the court under §5021 of the Probate Code quoted above for an order setting aside the transfer of one-half of the funds in each of the pay-on-death accounts. She argued that this law requires the court to set aside her community interest separately as to each account, regardless of any other community property she received outside of probate. (Outside of probate, Evangelina received more than one-half of those assets.) 

Although the trial court found for the other side, the Court of Appeal found for Evangelina, the court holding that: We conclude §5021 codifies the Estate of Wilson rule, and Evangelina is entitled to one-half of the community property funds in each of the pay-on-death accounts Raul established, notwithstanding her previous receipt of more than one-half of the community estate. Because Evangelina did not consent to the transfers Raul made, the funds were “only ...half his...to give...”  

So, you can see, Jerry, that you may have remedies if your wife were to die. Also, you may also have certain remedies under the Family Code at this time, i.e., during her lifetime, for breach of fiduciary duty, for example. It seems to me that community property is pretty well established in California and that you do have many rights concerning your half. Once again, working with your own attorney is essential. 

Donald J. DeVries
Almaden Valley 

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by e-mail at don@almadenvalleylawyers.com, fax at (408) 268-6502, telephone at (408) 268-9500, or mail at, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Want to learn about a specific legal issue or how DeVries can help you? Visit his web site at www.almadenvalleylawyers.com. Almaden Times columns since 1986 are available there. DeVries writes this column to provide you with general information about important legal matters affecting California residents—not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.