In estate planning and probate, one sees the intersection of family law on a frequent basis. Late last year, the California Court of Appeal (Div. Three) held that a San Francisco-area widow must continue making support payments to her deceased husband’s previous wife. This case is now pending before the California Supreme Court. Kircher v. Kircher, 10 S.O.S. 6238.
This case shows the importance of consulting with an estate planning attorney at the time a marital or dissolution agreement is made. It is apparent that no one representing the husband or the new wife considered what would happen if the husband passed away. Perhaps the husband would have purchased separate insurance to provide for this continuing obligation or made some other changes to his trust. If the agreement or judgment is already entered into, it is still important to consult an estate planning attorney to provide for obligations under prior marital settlement agreements.
Div. Three said that the form of title in real property that passed to the widow (Wife 2) upon her husband’s death—joint tenancy—did not shield it from consideration when determining the extent of her personal liability for his obligation to pay Wife 1 support till she died. That ruling followed the panel’s conclusion, in an unpublished portion of its opinion, that the man’s written agreement to support Wife 1 until she died was sufficient to waive state law providing that such an obligation would normally terminate upon his death.
Wife 1 Bonnie Kircher, the former wife of San Francisco hotel and apartment house operator Vincent Kircher, sued Wife 2 Adelaide Kircher, his widow, when the latter stopped making monthly support payments in 2008, three years after her husband’s death.
Vincent and Wife 1 separated in 1970 following almost 10 years of marriage and entered into a settlement agreement in which he agreed to pay monthly support until either of the two died or she remarried. The two modified the agreement in 1987, agreeing to increase support and for payment of Wife 1's health insurance. The modified agreement provided that the obligation continued until Wife 1 died, remarried, or lived with another person “in a marital-like relationship” for 30 days, but omitted any language cutting off the obligation at Vincent Kircher’s death.
In 1998, Vincent Kircher married Wife 2 Adelaide Kircher and revised his will to leave his property to her upon his death. He also transferred title to three real properties to himself and his new wife as joint tenants, and continued to meet his support obligations while living. These properties had been separate properties.
Interestingly, if he had not transmuted them to community property, all of the value of the properties could have been used to pay Wife 1 instead of just his community share. Probate Code §13551 limits the liability of a surviving spouse for the deceased spouse’s debts to the fair market value of the deceased spouse’s separate property or his share of community property.
Upon his death in 2005, Wife 1 filed a creditor’s claim against his estate asserting a claim for past and future obligations under the modified agreement. Wife 1 filed a complaint against Wife 2 Adelaide Kircher three years later when Wife 2 terminated the ongoing monthly support payments while continuing to pay for the health insurance. Wife 1 claimed that Wife 2 was personally liable for husband's debts under Probate Code §13550-13552 and seeking damages and attorney fees for Wife 2’s breach of the modified marital settlement agreement’s terms.
Wife 1 sought a declaration that Wife 2 was obligated to continue to comply with the terms of the settlement agreement. Wife 2 argued that the support obligations could not be enforced against the real properties she held in joint tenancy with her late husband because a surviving joint tenant takes the property free of creditors’ claims.
In response, Wife 1 asserted that she did not seek a lien on the properties, only to impose liability for continuing payments up to the amount of the properties’ value, and Marin Superior Court Judge Verna A. Adams ruled in Wife 1's favor. The trial court judge Adams determined that calculation of Wife 2’s personal liability for her husband’s debts encompassed property held in joint tenancy, and that the support obligation to Wife 1 survived his passing, and the Court of Appeal agreed in an opinion by Justice Martin J. Jenkins.
Jenkins pointed out that the Probate Code provides that a surviving spouse is personally liable for the debts of a deceased spouse, and that liability is chargeable against property described in Sec. 13551. He said that the properties Vincent and Wife 2 held in joint tenancy fell within that section because the Legislature clearly intended for it to reach all property, including joint tenancies, so long as it could be characterized as community property or the decedent’s separate property.
Noting California’s presumption that property acquired by a married couple is community property, and explaining that characterization of property is not dependent on the form of title, Jenkins wrote: “At the time of decedent’s death, the property held in joint tenancy by Vincent and was presumed to be community property subject to rebuttal by Vincent that it remained his separate property. Either way, the property at issue falls within the ambit of section 13551."
Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney, A Partnership. For a free 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.
With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221 to request a consultation.
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