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Non-Probate Techniques

INTER VIVOS GIFTS: Fraudulent Conveyancing
California's fraudulent conveyancing statute is located in the Uniform Fraudulent Transfer Act which is located in the California Civil Code, Sections 3439-3439.12. Under the Act, a transfer made to a creditor is fraudulent if the debtor made the transfer or incurred the obligation with actual intent to hinder, delay, or defraud any creditor of the debtor, or without receiving a reasonably equivalent value in exchange for the transfer or obligation. The debtor must have been engaged or about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction, or intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due. Cal. Civ. Code § 3439.04 (West 2000).

A testamentary power of appointment cannot be exercised by will making general disposition of all the testator's property. Because no specific reference is made to the power it is not exercised in the residuary clause. Cal. Prob. Code § 641 (West 2000). Powers of appointment are found in Cal. Prob. Code §§ 600-695 (West 2000).

Joint tenancy is a form of concurrent ownership wherein each co-tenant owns an undivided share of property and the surviving co-tenant has a right to the whole estate. Traditionally there has been the requirement of the four unities: the unity of time, title, interest and possession. In order for a joint tenancy with rights of survivorships to be created in California, the intent to do so must be expressly declared. An example of clear intent is: "to H and W as joint tenants with a right of survivorship." The requirement of the unities has been abolished since it is possible to for an owner to create a joint tenancy in herself and another by a single deed even though the unities of time and title are not satisfied. A joint tenancy in personal property may be created by a written transfer, instrument, or agreement. Cal. Civ. Code § 683 (West 2000).

In California survivorship rights are presumed unless there is clear and convincing evidence of a different intent. "Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent." Cal. Prob. Code § 5302 (West 2000).

Critique of Exchange Bank signature card:
    I obtained my signature card from Exchange Bank, a local bank in Santa Rosa, CA. Luckily I opened my account several years ago under their "old system" because now all signature cards are electronic and stored on computer. This presents a problem for people wanting to obtain a copy of their signature card. Had I opened my account under the new system it appears it would be difficult for me to retrieve a copy of my signature card. Even though I am a long time customer of this bank, they were somewhat reluctant to give me a copy of my card and would not give me a blank card for fear of a security problem.
    The manager of the bank did provide me with a New Account Worksheet which is what is used to gather the data that has traditionally been entered onto a signature card. Upon noticing that there is no space on the form to enter how the property in the account is to be treated I asked the manager how one would open an account such as a joint account. The manager responded that you would just tell the employee of the bank at the time you open the account. Under the old system, the card contained spaces to indicate if the property in the account was the property of an individual, joint tenants, trustee, community property, tenants in common or UTMA. The manager of the bank also gave me the bank's Deposit Account Agreement Disclosure which contains a sample signature card on the last page of the booklet. On the sample there is space to write in ownership type and beneficiaries. There are no checkboxes or descriptions of the ownership types. Additionally the form contains information on number of signatures required for withdrawal. The second page of the booklet contains a description of the different ownership types and beneficiary designation.
    I was surprised that the customer is not provided with a copy of their signature card upon opening a new account. None of the forms I received mentioned rights of survivorship. There are no options for people who would rather not follow the state presumption of survivorship. Overall I am surprised at the lack of attention given to ownership of the property in the account.
    Recently I opened an account with an online bank, The signature card is somewhat different than the Exchange Bank card.

Any property transferred by a non probate transfer on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or other written instrument of a similar nature is not invalid because the instrument does not comply with the requirements for execution of a will. Cal. Prob. Code § 5000 (West 2000). Cal. Prob. Code §§ 5010-5032 pertain to transfer on death of community property. Cal. Prob. Code §§ 5100-5407 concern multi-party accounts. The Uniform Transfer on Death Security Registration Act is found in Cal. Prob. Code §§ 5500-5512 (West 2000).

There are many resources available on the Internet for obtaining life insurance quotes. I used Yahoo! Term Life Quote Estimator to obtain quotes from six different companies at one time. Quotes for a twenty year term life insurance policy for $1,000,000 for myself (male, age 23, good health) ranged from $590 initial annual premium guaranteed for 20 years from Western Southern Life to $1,020 from Allstate Life Insurance, initial annual premium guaranteed for 10 years. Through my correspondence with Bob Rawson of Ascend Financial Services, Inc., I obtained a quote for whole live insurance. He estimated the annual premium for a $1,000,000 permanent policy will range from about $3,600 for a minimally funded policy to about $7,800 for a whole life policy. These quotes were obtained on January 29, 2000.

View a sample beneficiary designation form. Adobe Acrobat Reader required

View a sample annuity contract form.

There are many different retirement plan options available. One such option is a 401(k) plan. View the sample 401(k) enrollment form.