The February 2020 case of Wilkin v. Nelson addressed reformation of a pour-over will, surviving spouse rights, community property, and California intestacy law. The opinion was initially unpublished, and then certified for partial publication.
The Facts of Wilkin v. Nelson
William and Hanako Nelson were married in 1981. Hanako had two sons from a prior marriage, Gary and Jay Wilson. In 2000, Hanako executed a trust leaving a separate property rental home (the “Goleta Property”) to her sons. At that time Hanako also executed a pour-over will granting “the residue of [her] estate” to the trustee for administration after her death.
Hanako died in 2016. Gary petitioned the California probate court requesting that Hanako’s separate and community property assets be transferred to her trust pursuant to the pour-over will.
Surviving spouse William filed a petition to reform the pour-over will to confirm to Hanako’s intent to transfer only the residue of her separate property estate into the trust.
The California probate court found that clear and convincing evidence supported equitable reformation of the pour-over will to provide for testamentary control and disposition of Hanako’s separate property only.
Can A Pour-Over Will Be Equitably Reformed?
Yes. Modern intent is toward favoring the decedent’s intent over formalities.
The court applied a two-prong standard set forth in Estate of Duke (2015) 61 Cal. 4th 871, which we have written about here. In Duke, the court concluded that in cases in which clear and convincing evidence establishes both (1) a mistake in the drafting of the will and (2) the testator’s actual and specific intent at the time the will was drafted, denying reformation would defeat the testator’s intent and result in unjust enrichment of unintended beneficiaries.
Extrinsic evidence is available in California to correct a mistake in the expression of a testator’s intent in an unambiguous will.
Here, there was substantial evidence of Hanako’s actual and specific intent at the time the trust and will were drafted:
- Hanako wanted “just trust for home” to gift her separate property rental home, the Goleta Property, to her two sons. This intent was confirmed in an hour long meeting with the drafting attorney.
- Hanako and the drafting attorney only discussed the Goleta property, and the drafting attorney believed that Hanako’s sole testamentary intent was to place the Goleta property into a trust.
- Hanako expressed a general desire to have a will control only the disposition of her separate property.
- The drafting attorney testified that the Trust was a separate property trust.
- The Trust provides that the property transferred is the settlor’s separate property.
- The Trust did not include any community assets.
- Hanako’s exclusive intent when she signed the Trust was to leave the Goleta Property to her sons.
- No evidence was presented showing Hanako’s intent was to include community property assets in her estate plan.
Given the probate court’s finding that Hanako intended at the time the trust and pour-over will were drafted to provide for testamentary control and disposition of only her separate property, not community property, the appellate court determined that the decision to reform the pour-over will to conform to that actual and specific intent was well within the California probate court’s discretion.
What Happens To Community Property Assets Under California Intestacy Law?
A spouse’s interests in community property assets pass to the surviving spouse. Because the pour over will was equitably reformed, Hanako died intestate with respect to her community property assets.
Under California Probate Code sections 100 and 6401, Hanako’s interests in community property assets passed to William as the surviving spouse.
California Probate Code section 100(a) provides:
“Upon the death of a person who is married or in a registered domestic partnership, one-half of the community property belongs to the surviving spouse and the other one-half belongs to the decedent.”
California Probate Code section 6401(a) states:
“As to community property, the intestate share of the surviving spouse is the one-half of the community property that belongs to the decedent under Section 100.”
Therefore, anything in this case that was a community property asset was not governed by the will and passed to William upon Hanako’s death.
