Opinion
The executor of the estate of Rembert C. Anderson (decedent) appeals the probate court’s denial of a family allowance to the surviving spouse. The controlling statute is Probate Code section 680, which provides that in an insolvent estate, family allowance “must not
Respondents’ actions against the estate allege that decedent, their uncle, in conjunction with their parents as co-trustees, mismanaged a testamentaiy trust of which they were ultimate remaindermen by permitting the sole asset of the trust, a parcel of real estate, to be lost by foreclosure during the depression in 1934. They also claim that decedent and their parents wrongfully failed to comply with the order in the decree of distribution in their grandfather’s estate requiring that $1,000 be deposited for each respondent in a savings bank and distributed with accrued interest upon his or her majority. They claim damages in excess of the value of the probate estate (inventoried at $1,035,972.40) and seek to identify assets currently in the estate as wrongful profits that accrued to decedent as a result of failure to redeem the trust property.
As the probate court noted, these actions survived the law and motion stage. However, appellant executor has highlighted a number of factors that make it unlikely respondents’ actions will meet with any success. For
Under section 680, when an estate is insolvent, termination of family allowance one year from the grant of letters is mandatory. At bench letters were issued 6 February 1975, and the widow received family allowance from 8 January 1975 to 8 April 1976. Accordingly, the only discretion in the probate court was to determine whether the estate was insolvent. California cases in point are Estate of Murphy (1964) 225 Cal.App.2d 224 [37 Cal.Rptr. 205], and Estate of Cates (1971) 16 Cal.App.3d 1 [93 Cal.Rptr. 696]. In Murphy, a civil action had been filed against the estate claiming decedent had obtained all assets of the estate from his aunt through undue influence. Claimants sought to impress a constructive trust upon the assets and obtained a preliminary injunction on the civil side of the court enjoining the administratrix from
The Murphy and Cates cases are distinguishable from the case at bench to the extent that in the lawsuits filed against those estates, a favorable outcome for the adverse claimants was readily apparent. In Murphy, the judge trying the constructive trust action had been willing to issue an injunction restraining the executor from disbursing estate assets, and in Cates the collateral estoppel effect of the Illinois judgment made a favorable outcome for contestants virtually certain.
The case here undeniably involves hardship on the widow. The trial court frankly stated it wanted to find a way to order family allowance for the widow, who was decedent’s wife of 17 years, has monthly living expenses of $6,567, and apparently had no resources outside the probate estate.
Family allowance is a statutoiy creation intended to provide temporary support to surviving spouse and children pending readjustment and ultimate distribution of the estate. The recipient of family allowance is
By reason of the paucity of case law interpreting the term “insolvency" in section 680, the court in Murphy discussed a number of cases arising in a related context, that of preliminary distribution. Under sections 1000 and 1001 ff. of the Probate Code (and their predecessor statutes) preliminary distribution of estate assets is authorized if the estate is “but little indebted” and distribution will not jeopardize rights of any creditor or person interested in the estate. Unlike family allowance, partial distribution transfers estate property to its designated owners. Further, distributees of the estate are heirs. If an adverse claimant wins a judgment against the estate, he could probably get a judgment against the distributees individually on the basis of transferee liability.
A preliminary distribution hearing is a more plenary proceeding than an application for family allowance, and the probate court has more options available to it. Preliminary distribution requires an estate
In Estate of Dabney (1951) 37 Cal.2d 672 [234 P.2d 962], the court held that an adverse claimant to estate property is not a creditor of the estate nor one interested therein, and accordingly he may not directly challenge a preliminary distribution, but must seek an injunction from the court trying his lawsuit to prevent distribution of estate assets. The court upheld the discretion of the probate court in allowing preliminary distribution when adverse claims amounted to 25 to 40 percent of assets. The court, clearly influenced by the policy favoring speedy distribution in probate, concluded that the judge trying the adverse action against the estate is in a better position than the probate judge to assess likelihood of success in the civil action.
We think appellant might do well to consider the possibility of preliminary distribution, as in Dabney. Preliminary distribution to the widow would appear proper, in that public policy favors speedy distribution of probate estates, especially where the widow has little outside resources. The court may authorize preliminary distribution despite pending claims, leaving respondents to their remedies on the civil side of the court. If the law and motion department is sufficiently convinced of the merits of respondents’ cause and its likelihood of success, it can issue an injunction to prevent preliminary distribution, as happened in Murphy. Moreover, nothing would prevent the probate court conditioning partial distribution on posting of bond or subjecting the estate’s real property to a lien for such sums, if any, as respondents might ultimately recover. We note the real property in the estate has
The order terminating family allowance is affirmed.
Roth, P. J., and Beach, J., concurred.
A petition for a rehearing was denied May 10, 1977.
Section 680: “The surviving spouse, minor children, and adult children who are physically or mentally incapacitated from earning a living and were actually dependent in whole or in part upon the decedent for support are entitled to such reasonable allowance out of the estate as shall be necessary for their maintenance according to their circumstances, during the progress of the settlement of the estate, which, in case of an insolvent estate, must not continue longer than one year after granting letters. Such allowance must be paid in preference to all other charges, except funeral charges, expenses of the last illness and expenses of administration, and may, in the discretion of the court or judge granting it, take effect from the death of the decedent.”
The estate generates an annual income of about $75,000. Because it was not clear how much family property was community property and how much was decedent’s separate property, all property in which decedent had an interest is in probate, and no joint tenancy property is listed in the inventory. There are no references to life insurance. The petitions for family allowance affirmatively allege that the widow has no resources except Social Security payments of $269 monthly and a pension of $94 monthly.
The widow was decedent’s second wife, and decedent was childless.
Civil Code section 3439.02, subdivision (a) reads: “(a) A person is insolvent when the present fair salable value of his assets is less than the amount that will be required to pay his probable liability on his existing debts as they become absolute and matured.”
