This guest post is from Amy Krueger, Regent Law 2L:
Because caregiving often involves pouring years into someone who may no longer be productive or attractive or even good company, caregiving can be one of the most beautiful expressions of love as well as one of the most difficult tasks a person can undertake. California and Illinois apply a presumption of undue influence that, if not rebutted, will void certain testamentary gifts to certain caregivers. Although surely warranted in many cases to protect the elderly, does this disincentivize an already thankless task?
In 2010, California’s Lake County News reported, “The presumption has often raised major concern with respect to even legitimate gifts made to genuine friends (who stepped in when their dependent friend needed help) due to uncertainty over the definition of ‘care custodian.’”
We first look at when the presumption actually applies:
California: California Probate Code Section 21380(a) applies the presumption of fraud or undue influence to “donative transfers” (i.e., testamentary gifts and other gifts) to a dependent adult’s “care custodian” if the transfer instrument was executed during provision of services or shortly before or after that time. Under Section 21382, gifts of $5,000 or less are often allowed, and gifts to a variety of family members are also fine. Section 21362 defines “care custodian,” excluding unpaid caregivers with a pre-existing “personal relationship with the dependent adult” from the presumption.
Illinois: The Probate Act of 1975, 755 ILCS 5/4a, applies the presumption of a void transfer due to fraud, duress, or undue influence to transfers (i.e., gifts and non-gifts) made to a person’s “caregiver” on or after the dependent’s death. Transfers up to $20,000 are not subject to this presumption. A “caregiver” may be paid or unpaid, but a family member is not considered to be a “caregiver.”
Neither statute applies the presumption of undue influence to family members, thus alleviating what could be a major concern for some of the most common caregivers.
California’s statute also excludes those who have had a “personal relationship” with the dependent at least ninety days before provision of services. California caregivers who do not meet the exclusions may wish to ensure that their remuneration is not characterized as a gift, even if they are willing to wait to receive fair payment for services rendered until the death of the dependent.
The Illinois statute is a bit trickier because more people fall under the “caregiver” definition and because non-donative transfers are included in the potentially void transactions. In an insightful post, Attorney Jeffrey R. Gottlieb observes, “[T]here is no requirement that the person giving the assistance ever consider or label themselves as a caregiver — a helpful friend could very well be deemed a caregiver.” Illinois non-family caregivers may wish to ensure payments for services are contracted and payable over the term of service, thus obligating the estate to make payment in the event the dependent does not have enough liquid assets while living.
Although
it may be uncomfortable to talk money at a vulnerable time in someone’s life,
caregivers who do not take proactive steps to ensure compensation may find that
they are the ones in a vulnerable position after years of service. A
conversation about compensation can be undertaken with a third party who understands
the situation and who can help provide solutions so that caregiving can
continue and caregivers can be cared for.
This
post provides a high-level overview. It is advisable to discuss potentially
problematic transfers with an attorney licensed in the applicable state.
Image
by Gerd Altmann
from Pixabay



