Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, Ct. No. PN29390, Richard G. Cline, Judge. Affirmed in part and reversed in part with directions.
HUFFMAN, Acting P. J.
Petitioner and appellant Van Hazewinkel (Van), as successor trustee of an amended survivor's trust that was part of a 1975 family trust established by his father, Ben Hazewinkel (Ben) and his mother Betty Hazewinkel (both of whom are now deceased), filed this petition under Probate Code sections 850 and 17200, to seek instructions regarding the claim of objector and respondent Wanda Hazewinkel, his father's surviving second wife (Wanda), to status as a lifetime beneficiary of the amended survivor's trust. Van also sought an order establishing the survivor's trust's ownership of one-half interest in the community residence formerly lived in by Ben and Wanda (the Vista property), under a trust transfer deed in which Ben transferred his individual community interest in the Vista property to the survivor's trust. (§ 850, subd. (a)(3).) Ben died in 2006, shortly after he amended the survivor's trust, executed the trust transfer deed, and filed a petition for legal separation.
All further statutory references are to the Probate Code unless noted. To avoid confusion, we refer to the various parties by their first names.
Van filed this trust proceeding and a related probate petition concerning Ben's estate. The estate matter was largely resolved and the probate court conducted a court trial on the trust issues, in which it took extrinsic evidence to interpret the various amendments to the 1975 family trust, and made dispositive legal and evidentiary rulings. Specifically, the court excluded the evidence offered by Van about the intent of Ben as the trustor, in the form of testimony from Richard Macgurn (Macgurn), the attorney who had drafted the most recent amendment (Fifth Amendment) to the trust, although the court admitted legal opinion evidence from Wanda's expert trust specialist, James Goodwin, about the tax planning and other purposes of the trust.
Ultimately, the probate court granted a motion for partial judgment by Wanda and determined that she was the prevailing party. (Code Civ. Proc., § 631.8.) The court accepted Wanda's interpretation of the various versions of the trust, that she remained a beneficiary under a previous amendment to the survivor's trust (Third Amendment) that had not effectively been revoked, such that she was entitled to income and reimbursement of various living expenses from the trust. The probate court also ruled that pursuant to Family Code section 1102, the trust transfer deed of Ben's individual interest in the community residence was voidable, because Wanda had not consented to it.
The judgment is appealable under section 1304, subdivision (a).
On appeal, Van contends the probate court erroneously excluded the extrinsic evidence he offered for interpretation of the trust, because the trust language was reasonably susceptible of his interpretation (that Wanda had been disinherited by Ben). Van further contends that the trust transfer deed regarding the community residence was valid. He seeks reversal of the judgment and all of the equitable and damages relief it provides.
As we will show, we agree with Van that the trial court abused its discretion in excluding the extrinsic evidence offered about the circumstances of the making and amendment of the trust, which is ambiguous regarding Wanda's beneficiary status, and therefore its interpretation of the trust documents is incomplete and reversal is required. The judgment will be reversed with directions to conduct further proceedings admitting the extrinsic evidence and to include it in the interpretation of the trust documents.
Regarding the Vista property, we agree with Wanda that the trust transfer deed regarding Ben's community interest in that residence was invalid under these circumstances and is voidable at her election. The trial court's ruling was a correct reading of Family Code section 1102. However, the remaining awards in the judgment related to trust beneficiary issues (monetary relief, reimbursement of attorney fees and costs, and accounting) necessarily are vacated and those issues are to be resolved upon remand in accordance with the current circumstances found by the probate court. We make no appellate attorney fees award at this time.
FACTUAL AND PROCEDURAL SUMMARY
We will first set forth the basic general facts, and expand them as necessary in connection with our discussion of the separate issues regarding the trust beneficiaries and the trust transfer deed. Ben and Betty Hazewinkel were married for many years and had two sons, Van and William. In 1975, Ben and Betty established the Hazewinkel Family Trust (Family Trust), containing their community property. Upon the death of either husband or wife, their "initial trust" was to be divided into two trusts designated as the survivor's trust and the decedent's trust. The survivor's trust was originally stated in one particular article of the 1975 family trust; it was revocable and was to be funded by receiving the separate property of the surviving trustor and certain property equal to the tax marital deduction amount, as adjusted in ways not relevant here.
The decedent's trust was an irrevocable trust, and it was to receive all of the property from the first spouse to die, that was not included in the survivor's trust. Once the surviving spouse died, the survivor's trust assets were to be distributed to a separate children's trust. When the surviving spouse died, his or her will could dispose of the remaining principal and income of the decedent's trust, or those assets would be added to the children's trust. Ben and Betty executed two amendments to the Family Trust that do not affect the issues here.
In 1982, Betty died, so that Ben became the trustee of the survivor's trust. Her irrevocable decedent's trust was funded with the approximate amount of the marital tax deduction at the time ($225,003.) Although William and Van are its beneficiaries, Ben as the survivor and trustee had the power to appoint or distribute its assets. There are no issues about it on this appeal, as the Third Amendment did not change it.
A. 1994 Third Amendment to Family Trust
In 1985, Ben married Wanda, a registered nurse who was about 20 years his junior. Wanda had two sons from a previous marriage and two grandchildren (the Armbrusters).
In 1994, Ben as trustee executed the Third Amendment to the survivor's trust, greatly expanding its provisions. In the Third Amendment, Ben designated Wanda as the successor trustee. The survivor's trust contained only Ben's separate property, although it provided certain benefits for Wanda if Ben predeceased her. The survivor's trust became irrevocable at his death. The Third Amendment contained numerous subarticles and created two new subtrusts (a "marital trust" and the "family bypass trust"; arts. V-VI), in addition to retaining the children's trust (art. VII).
Under the Third Amendment, if Wanda survived Ben, a marital trust was created (art. V), and half of the trust estate would be designated as the marital share (an amount designed to qualify for the marital deductions under federal estate tax law), and the other half would be designated as the "exemption equivalent share" (remainder after federal estate tax exemption amount; art. IV). These two halves of the estate would go into the marital trust and the family bypass trust, respectively. In addition to the retained children's trust (now designated for the grandchildren only), there was another subtrust, the disclaimer trust, in case the surviving spouse disclaimed any property. (Art. VIII; it is not at issue here.)
According to the Third Amendment's marital trust, Wanda was entitled to trust income and invasion of principal to preserve her standard of living during her lifetime. Also, she had the right to live in a family home in which the marital trust had an interest, rent free. The trustee would pay a proportional interest (of marital trust ownership) of the mortgage, property taxes, and other homeowners' expenses.
Regarding the children's trust, the amended article VII provided that upon the surviving spouse's death, Ben's grandchildren and Wanda's grandchildren had a remainder interest in the survivor's trust. In 2003, Ben (and Wanda as successor trustee) executed a fourth amendment to the survivor's trust changing the shares of the two sets of grandchildren's interests, and adding a no contest clause.
B. Fifth Amendment; Trust Transfer Deed; Family Law Petitions Filed
By 2005, Ben was 86 years old, in deteriorating health, and was using oxygen and a wheelchair. In September 2005, Ben believed that Wanda had denied him access to a telephone and his personal papers, and he asked a friend for help in leaving the Vista residence and moving into an assisted living facility in order to separate from Wanda. In November of 2005, Ben consulted a family law attorney, Stephen Moore, and retained him to file a dissolution action. Moore referred him to an estate planning attorney, Macgurn, and Ben met with him in December of 2005 and January 2006. According to Macgurn's notes of his interview with Ben, Ben told him he was in the process of getting a divorce from Wanda and wanted to disinherit her. He told Macgurn that he wanted to disinherit his son William, not for a lack of love and affection. The notes show that Ben told Macgurn he already had a tax planning trust, and wanted to amend the trust to change the trustee back to Ben alone, and to give everything to his son Van and those two grandchildren.
Macgurn sent the information to his legal assistant in Reno, Nevada, to request her to draft the "Fifth Amendment to Declaration of Trust" (Fifth Amendment). Ben signed it in January 2006. This document begins by revoking the previous provision identifying Wanda as the successor trustee and naming Ben's adult son, Van, as the new successor trustee. The Fifth Amendment stated it amends the 1975 trust as to the survivor's trust "only," and specifically refers to revoking the children's trust article in its entirety and substituting a new article VII. This new children's trust lists its beneficiaries as Van and his two children, share and share alike. The next provision, still within the children's trust heading, reads as follows: "Trustor has intentionally, and with full knowledge, failed and omitted to provide for Wanda...." It then makes the same statement about not providing for William, adding "not for lack of love and affection." The Fifth Amendment then resumes discussion of the children's trust beneficiaries and their education.
At the end of the Fifth Amendment, its paragraph 4 states that "in all other respects [the 1975 trust] is approved and of full force and effect." Therefore, the Fifth Amendment does not expressly state there were any changes to the Third Amendment's articles IV, V and VI, which had created the marital trust and provided Wanda with various benefits, including a life estate in the survivor's trust property upon Ben's death.
When he met with Macgurn, Ben asked him to prepare a deed to transfer his community interest in the Vista property into the survivor's trust. After preparing this deed and obtaining Ben's signature, Macgurn recorded the deed on February 7, 2006. Macgurn did not obtain Wanda's written consent to this transfer. At Ben's request, Macgurn drafted a new will for the same beneficiaries, excluding Wanda. The new will was signed January 19, 2006 and declares that Ben was contemplating dissolving his marriage to Wanda and gave all his property to Van and his heirs.
Although Ben originally asked that Macgurn prepare new powers of attorney, this was not done, although the reason for that is unclear.
On March 9, 2006, Ben filed a petition for legal separation. Wanda responded with a petition for dissolution on April 12, 2006. Ben died shortly thereafter (April 27) and no marital judgment was ever created, as those actions were abated. The family members had disputes over Wanda's possession of Ben's ashes, as Ben's sons wanted them sent to them.
C. Van's Filing of Probate Petition; Wanda's Response
On July 11, 2006, Van, as successor trustee of the survivor's trust, filed a probate petition for instructions. (§ 850, subd. (a)(3); § 17200, subd. (b)(4).) Van requested the court order that Wanda "take nothing" from the survivor's trust. Van claimed that Ben had intended to disinherit Wanda, and the failure in the Fifth Amendment to expressly revoke articles IV, V and VI in the Third Amendment was the result of Macgurn's professional errors. Van also requested the court to confirm that one-half of the Vista property was owned by the survivor's trust. (Other requests about Wanda's return of withdrawn funds from several bank accounts and Ben's ashes are not at issue here.)
In support of his allegations about Ben's intentions, Van lodged numerous exhibits, including the various amendments to the trust, and Macgurn's declaration, in which Macgurn admitted to a "scrivener's error" with respect to his failure to amend the trust provisions that had provided Wanda with a life estate in the survivor's trust property. Macgurn stated it was Ben's intention "that upon his demise his entire estate would be distributed to [Van and Van's children]... and that [Wanda] would have no interest in his estate."
On August 8, Wanda filed objections to the probate petition. In the objections, Wanda argued that the Fifth Amendment did not modify the provisions entitling her to income and principal of the survivor's trust during her lifetime. Accordingly, she requested rulings rejecting Van's petition that the court "rewrite" the survivor's trust to disinherit her. Wanda additionally objected to Van's claim that one-half of the Vista property was owned by the survivor's trust, asserting that the transfer was invalid because she had not consented to the transfer. Wanda also objected to Van's confirmation as trustee.
D. Trial, Statement of Decision
The parties resolved their separately filed disputes about the will, and the trust matter went to trial in April 2008. In their trial preparation materials, the parties framed the main issue as whether Wanda remained a beneficiary of the Hazewinkel survivor's trust. Van presented testimony from numerous witnesses, including himself, Macgurn, Ben's divorce lawyer Moore, Jennifer Johnson (a staff member at the assisted living facility to which Ben had moved), and others. Macgurn testified as a percipient, rather than an expert witness.
Wanda presented testimony from several financial experts, including an attorney whose field is trusts and estate planning, James Goodwin, and an appraiser who testified about a parcel of industrial property in Costa Mesa rented by the trust to Van (valued at around $1.2 million). Wanda also testified about her own financial needs and projected repair expenses for the family residence.
In the revised statement of decision, dated June 10, 2008, the probate court summarized the parties' contentions about whether the Fifth Amendment had effectively disinherited Wanda, with respect to the survivor's trust and all subtrusts. The court noted that Van had acknowledged that "the Fifth Amendment is ambiguous through an error made by the drafting attorney. Nevertheless, [Van] alleges that there is evidence of the intent to entirely disinherit [Wanda] from the Survivor's Trust and he asks the court to interpret the Fifth Amendment accordingly. [Wanda] claims that the Fifth Amendment affects only the Children's Trust [Article VII]." Wanda therefore sought an order that she remains a beneficiary of the survivor's trust under the Third Amendment articles (other than art. VII).
In the revised statement of decision, the court set out its view of the issues presented: "The Fifth Amendment on its face applies only to Article VII of the Trust. It revokes Article VII in its entirety and substitutes new language in its place. The Fifth Amendment also approves the remainder of the trust, including Articles IV, V and [VI], which deal with various sub-trusts of the Survivor's Trust other than the Children's Trust. When interpreted in light of the remaining provisions of the Trust, the Fifth Amendment is ambiguous. Not the least of the ambiguities is the question of what is meant by the disinheritance language quoted above. The Fifth Amendment purports to disinherit Respondent and William Hazewinkel from the Children's Trust, a sub-trust as to which they were never beneficiaries. Another monumental ambiguity relates to tax planning. The Fifth Amendment appears to totally unwind the tax strategy and components of all prior trust instruments. The court must resolve that effect with the unequivocal and longstanding goals of the Trustors to minimize taxes." (Italics added.)
The statement of decision further explains the procedures used at trial for allowing extrinsic evidence to interpret the trust materials, and sets forth the court's preliminary findings as follows:
"The court adopted the two-step approach to extrinsic evidence authorized by Pacific Gas & Electric Co. v. G.W. Thomas Drayage etc. (1968) 69 [Cal.2d] 33. Petitioner offered, and the court provisionally received, extrinsic evidence to interpret the ambiguous Fifth Amendment. The principal evidence was the testimony of the drafting attorney, Richard Macgurn. He stated that the clear intent of Ben Hazewinkel was to disinherit Respondent and William Hazewinkel entirely with respect to the Survivor's Trust. More particularly, the Fifth Amendment was intended to revoke Articles IV, V & VI as well as Article VII. According to Macgurn, he made an error in drafting and, as a consequence, the Fifth Amendment did not clearly reflect the intent of Ben Hazewinkel. The court finds that the interpretation of the Fifth Amendment advanced by Petitioner is not a meaning to which the language of the instrument is reasonably susceptible." (Italics added.)
At the end of testimony, the probate court heard and granted Wanda's motion for partial judgment, and accordingly struck the testimony of Attorney Macgurn. Thus: "In conclusion, the court finds that the Fifth Amendment is a valid amendment to Article VII of the Trust and, by its terms, revokes and replaces the provisions of the trust in Article VII with respect to the Children's Trust. The Fifth Amendment does not affect the rights of [Wanda] under the balance of the trust. Therefore, the Court finds [Wanda] is a beneficiary of the Survivor's Trust and one whose rights are unaffected by the Fifth Amendment."
Based on those findings, the court concluded Wanda was entitled to distribution pursuant to provisions of the survivor's trust, exclusive of article VII. The court declined to reform the trust, as Van had requested at an oral motion during trial. The court additionally ordered that the trust transfer deed for the Vista property was voidable at Wanda's election. The judgment provided for awards of back due rent and shortfall amounts from the trust income and principal ($143,416), and for future monthly payments of the trust assets ($5,500 per month). Van was ordered to make an accounting and to reimburse the trust for attorney fees and costs paid from trust assets in connection with this litigation. The court set a status conference. Wanda was allowed to seek attorney fees and costs through separate motion proceedings, based in part on allegations that Ben had breached his fiduciary duties to her and Van had engaged in financial elder abuse. (Fam. Code, § 1101, subd. (g); Welf. & Inst. Code, §§ 15657.5, 15610.30.)
Van appeals. As a probate matter, this case is entitled to preference. (Code Civ. Proc., § 44.)
DISCUSSION
In Wells Fargo Bank v. Marshall (1993) 20 Cal.App.4th 447, 452-453, this court set forth the well-established guidelines for interpreting trust documents:
"[I]t is proper for the trial court in the first instance and the appellate court on de novo review to consider the circumstances under which the document was made so that the court may be placed in the position of the testator or trustor whose language it is interpreting, in order to determine whether the terms of the document are clear and definite, or ambiguous in some respect. [Citation.] Thus, extrinsic evidence as to the circumstances under which a written instrument was made is admissible to interpret the instrument, although not to give it a meaning to which it is not reasonably susceptible. [Citation.] On review of the trial court's interpretation of a document, the appellate court's proper function is to give effect to the intention of the maker of the document. [Citation.] [¶] Particularly in the field of interpreting trusts and wills, each case depends upon its own peculiar facts, and ' "... precedents have comparatively small value...." ' [Citation.]"
This dispute focuses upon the effect of the Fifth Amendment (of 2006) upon the 1975 family trust and its Third Amendment (of 1994). To evaluate the probate court's procedures used in its interpretation of the trust language, we set forth and apply rules of review and rules for admissibility of extrinsic evidence in analyzing such instruments. This will resolve the trust beneficiary issues and Wanda's request for attorney fees on appeal.
In part IV, post, we will turn to the respective contentions about the validity of the trust transfer deed of Ben's community interest in the Vista property.
I
BASIC RULES OF REVIEW
When a case is resolved upon a motion for judgment under Code of Civil Procedure section 631.8 (essentially a determination that a petitioner has failed to make out its case), appellate review follows these guidelines:
"A party may move for judgment in its favor under [Code of Civil Procedure section 631.8] after the opposing party has completed presentation of its evidence. [Citation.] The judge, sitting as trier of fact, may weigh the evidence and order judgment in favor of the moving party. [Citation.] ' " 'The purpose of Code of Civil Procedure section 631.8 is... to dispense with the need for the defendant to produce evidence' " ' where the court is persuaded that the plaintiff has failed to sustain its burden of proof. [Citation.] Because the trial court evaluates the evidence as a trier of fact, it may refuse to believe some witnesses while crediting the testimony of others. [Citation.]" (Combs v. Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242, 1262-1263 (Combs).)
The ultimate inquiry in this case is whether substantial evidence supports the trial court's interpretation of the trust documents, in light of its hearing of extrinsic evidence and all the other evidence relevant to them. The main purpose of the trial was to ensure that the trustor's intentions were carried out. (Estate of Russell (1968) 69 Cal.2d 200, 205-206.) "We apply the substantial evidence standard of review to a judgment entered under Code of Civil Procedure section 631.8, reviewing the record in the light most favorable to the judgment and making all reasonable inferences in favor of the prevailing party.... [Citation.] We will not reverse the trial court's order granting the motion if its findings are supported by substantial evidence, even if other evidence in the record conflicts. [Citation.]" (Combs, supra, 159 Cal.App.4th 1242, 1263.)
The probate court's legal ruling on the extrinsic evidence was additionally subject to the rule that evidentiary determinations are normally reviewed under an abuse of discretion standard. (People v. Waidla (2000) 22 Cal.4th 690, 717-718.) Here, it is not disputed that the provisionally admitted extrinsic evidence from Macgurn was conflicting with other evidence presented, and conflicted even within itself regarding his drafting and interpretation of the documents. On appeal, this approach is followed to evaluate conflicting evidence:
"When the competent parol evidence is in conflict, and thus requires resolution of credibility issues, any reasonable construction will be upheld as long as it is supported by substantial evidence. [Citation.] However, when no parol evidence is introduced (requiring construction of the instrument solely based on its own language) or when the competent parol evidence is not conflicting, construction of the instrument is a question of law, and the appellate court will independently construe the writing. [Citation.]" (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165-1166 (Winet).)
We next assess whether the extrinsic evidence presented, but excluded, was "competent parol evidence," and the effect of that ruling upon the outcome at trial.
II
PAROL EVIDENCE RULE; CRITERIA FOR ADMISSIBILITY
Review of the probate court's evidentiary and legal rulings must be conducted in view of well-settled principles that the "parol evidence rule" is not an evidentiary doctrine, but rather is one of substantive law. (2 Witkin, Cal. Evidence (4th ed. 2000) Documentary Evidence, § 62, pp. 182-183.) The probate court's procedure in considering the extrinsic evidence followed the accepted guidelines as stated in Pacific Gas & E. Co. v. G. W. Thomas Drayage etc., supra, 69 Cal.2d 33, 37, and summarized in Winet, supra, 4 Cal.App.4th at page 1165:
"The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties' intentions to determine 'ambiguity,' i.e., whether the language is 'reasonably susceptible' to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is 'reasonably susceptible' to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step--interpreting the contract. [Citation.]"
Estate of Russell, supra, 69 Cal.2d 200, 208-209 made it clear that "in order to determine initially whether the terms of any written instrument are clear, definite and free from ambiguity the court must examine the instrument in the light of the circumstances surrounding its execution so as to ascertain what the parties meant by the words used. Only then can it be determined whether the seemingly clear language of the instrument is in fact ambiguous." This threshold determination of ambiguity in a written instrument is subject to independent review. (Winet, supra, 4 Cal.App.4th 1159, 1165-1166.) The first issue presented was whether the Fifth Amendment was ambiguous on its face, and it is not disputed that the probate court correctly determined that it was ambiguous, and that it is "a mess." Therefore, the next step was to rule upon whether the Fifth Amendment interpretation urged by Van was reasonable, in light of the extrinsic evidence, as to its effect upon the remainder of the family trust.
In this instance, the probate court said no, and excluded the extrinsic evidence from Macgurn, regarding his contacts with Ben in preparing the Fifth Amendment, along with the updated will and the trust transfer deed. Our review of that portion of the ruling requires us to apply these principles:
"[P]arol evidence is properly admitted to construe a written instrument when its language is ambiguous. The test of whether parol evidence is admissible to construe an ambiguity is not whether the language appears to the court to be unambiguous, but whether the evidence presented is relevant to prove a meaning to which the language is 'reasonably susceptible.' [Citation.]" (Winet, supra, 4 Cal.App.4th 1159, 1165-1166.)
In Scharlin v. Superior Court (1992) 9 Cal.App.4th 162, 168, the court explained that when construing a trust instrument, the intent of the trustor must be ascertained "from the whole of the trust instrument, not just separate parts of it." In cases in which the trust instrument contains some expression of the trustor's intention, but as a result of a drafting error this expression of intent seems ambiguous, then "extrinsic evidence, including the drafter's testimony," may be admitted and considered "to resolve the ambiguity and give effect to the trustor's intention as expressed in the trust instrument. [Citation.]" (Ike v. Doolittle (1998) 61 Cal.App.4th 51, 74.)
Macgurn was not testifying as an expert witness. (See Schreiber v. Estate of Kiser (1999) 22 Cal.4th 31, 38 [discussing when treating physicians become expert witnesses].) There is no privilege bar to the admission of Macgurn's evidence about his communications with Ben. We may find some guidance in the treatment of when attorney-client privilege should prevent admission of evidence about a client's intentions in executing a dispositive instrument. (2 Witkin, Cal. Evidence, supra, Witnesses, § 164, pp. 436-437.) Even where attorney-client privilege might otherwise apply, Evidence Code sections 959 and 960 allow admission of such evidence, because " '[a] client ordinarily would desire his lawyer to communicate his true intention with regard to a dispositive instrument if the instrument itself leaves the matter in doubt and the client is deceased. Likewise, the client ordinarily would desire his attorney to testify to communications relevant to the validity of such instruments after the client dies. [Citation.]' " (Ibid.) Thus, an attorney may give evidence regarding " 'a communication relevant to an issue concerning the intention of a client, now deceased, with respect to a deed of conveyance, will, or other writing, executed by the client, purporting to affect an interest in property.' " (Evid. Code, §§ 960, 961; 2 Witkin, Cal. Evidence, supra, Witnesses, § 163, pp. 436-437.)
We next evaluate whether the probate court correctly excluded the extrinsic evidence from Macgurn, based on its determination the Fifth Amendment could not reasonably be interpreted in the manner he advocated, in light of the language of its predecessor amendments (arts. IV, V & VI). The probate court's interpretation of the trust documents will be upheld only if it is a "reasonable construction" that is "supported by substantial evidence. [Citation.]" (Winet, supra, 4 Cal.App.4th at p. 1166.)
III
TRUST INTERPRETATION
A. Issues Presented
This record requires us to examine Macgurn's testimony, in context of all the relevant circumstances, to determine whether the probate court's legal conclusions and discretionary ruling to strike all the extrinsic evidence were proper. As a threshold matter, we note that no issues about reformation of the trust are before us. (Civ. Code, § 3399.) The probate court declined to reform the trust, as Van had requested at an oral motion during trial. Van now agrees that the pleadings did not tender such an issue, and that reformation is not necessary under his theory that the trustor's intent is otherwise evident in the document, as explained by admissible extrinsic evidence.
Also as a threshold matter, we disagree with Wanda that Van has waived any challenges to the monetary awards in the judgment, by not more specifically attacking them in the briefs. Van's general arguments that the trial court erroneously excluded the extrinsic evidence sufficiently address each and every portion of the judgment on the trust issues.
We are well aware that a logical conundrum is presented here, in light of Macgurn's evidence in which he essentially "fell on his sword" by admitting that his professional services were defective, in that he should have expressly revoked those articles of the Third Amendment that continued to include Wanda as a beneficiary of the trust. He did not do so, but his testimony supported Van's position that Ben had asked him to accomplish that, in light of Ben's anticipated filing of legal separation or dissolution papers. This means that the Fifth Amendment, on its face, is at the very least ambiguous about what Ben wanted it to do with regard to amending the children's trust or other provisions. As an appellate court, it is not our function to "rewrite" the trust, nor is reformation requested. Rather, our task is to determine whether the Fifth Amendment should reasonably be read as impliedly amending the earlier dispositive portions of the trust's Third Amendment.
In Hoover v. Hartman (1982) 136 Cal.App.3d 1019, 1026-1027 (Hoover), this court addressed comparable problems in admitting extrinsic evidence to clarify a testator's intent. There, the topic was the interplay of a specialized rule that disallows extrinsic evidence of a testator's intent, where the circumstances show an ambiguity in the application of a statutory rule (i.e., requiring proration of estate taxes, § 970), and the more general rules that normally allow extrinsic evidence to clarify ambiguities in a dispositive instrument. (Hoover, citing Estate of Hendricks (1970) 11 Cal.App.3d 204, 208.) This interplay was said to create a "conundrum," because these specialized rules against extrinsic evidence on statutory questions "run counter to the general rule which requires that '[a] will must be construed according to the testator's intention and his intention must be given effect to the extent possible.' [Citation.] And '... where the language of a will... appears to be ambiguous or uncertain, extrinsic evidence may be considered to ascertain the maker's intention. [Citations.] Moreover, the court must accept extrinsic and parol evidence of the circumstances surrounding the execution of the instrument to determine whether a seemingly clear instrument or term is actually ambiguous. [Citations.]" (Hoover, supra, 136 Cal.App.3d at p. 1026.)
In Hoover, supra, 136 Cal.App.3d at page 1026, this court resolved that problem by holding that the specific taxation principles could not override general rules on interpretation of wills. Rather, under the circumstances of that will and a related trust created by the testator, this appellate court found an ambiguity, and we held that extrinsic evidence was necessary to clarify the testator's intent. It was error for the probate court to exclude the extrinsic evidence, even though "a cautious draftsperson could have avoided the problem here by coordinating the terms of the will and trust." (Id. at p. 1028.) This procedural error by the trial court did not allow it to conclusively construe the terms of the instruments in light of all the relevant evidence, and we held reversal was required, even though it was not clear what the ultimate correct reading would be:
"Our concern has been with the process through which this conclusion was reached. Because we believe that a process which includes the admission of relevant extrinsic evidence will invariably result in a more accurate finding on controverted issues, we hold the court's rejection of extrinsic evidence was prejudicial error." (Hoover, supra, 136 Cal.App.3d at pp. 1028-1029.)
We think the case before us raises the same procedural concerns. Not only does Macgurn's testimony conflict with that of Wanda's legal expert Goodwin, with regard to the evident purposes of Ben as the trustor, but Macgurn sometimes contradicted himself. For example, he said that Ben intended to disinherit Wanda, but he also said that the Third Amendment amounted to the dispositive provisions of the trust. Other evidence was presented about various factors potentially shedding light upon the problem of the trustor's intent.
Accordingly, we next compare the various versions of the amendments to the trust, and read them in context with the extrinsic evidence, to determine if " 'the written language is fairly susceptible of two or more constructions.' [Citation.]" (Estate of Russell, supra, 69 Cal.2d 200, 211.) We then determine if the court erred in excluding Macgurn's testimony, in view of the whole record, and whether substantial evidence supports the judgment.
B. Relevant Factors
1. Circumstances of Third Amendment
In 1994, when the Third Amendment was executed, Ben and Wanda had been married since 1985. The Third Amendment was funded with separate property of Ben. It restated the survivor's trust (after Betty died), and created the marital trust and the family bypass trust, which would receive distributions after Ben's death (as well as a disclaimer trust). Wanda was named as the successor trustee, and both Ben's and her grandchildren were beneficiaries of the children's trust. The children's trust would not receive funds until the deaths of both Ben and Wanda. In the Fourth Amendment, changes were made in 2003 about the shares of the respective grandchildren. Up to this point, Ben's testamentary and trust intent was clearly to amend the original 1975 family trust, for the stated purpose of including Wanda (and grandchildren) and giving her a life estate in the trust assets.
2. Circumstances of Fifth Amendment (Macgurn)
Things change. In September of 2005, Ben moved out of the family residence. He consulted Attorney Moore in November of 2005 about filing for legal separation and changing his estate plan. Attorney Moore referred him to Attorney Macgurn. They met in December and January, and the Fifth Amendment was executed in January 2006. Attorney Moore sent a negotiation letter and then prepared Ben's legal separation papers and filed them in March 2006. Attorney Moore testified Ben did not object to Wanda continuing to live in the Vista property, and a joint bank account continued to receive his social security benefits. Wanda responded to Ben's filing with her request for dissolution of the marriage. At that point, Ben's testamentary and trust intent are reasonably open to question, regarding an intention to further provide for Wanda.
Effective January 19, 2006, Ben's Fifth Amendment to the survivor's trust of 1975 first revokes the Fourth Amendment. It next names Van as successor trustee, revoking the original 1975 trust articles (which therefore replaced Wanda). It then states that the 1975 survivor's trust is amended "only" as to the [grand] children's trust, article VII. Of course, within the [grand] children's trust, it also states that the trustor intentionally, and with full knowledge, failed and omitted to provide for Wanda, or also for William. But, they are not [grand] children of Ben, but rather his wife and brother. Next, the Fifth Amendment is stated to be a part of the 1975 family trust, "which with the changes is approved and of full force and effect." What does that mean?
When Ben died in late April 2006, he had filed his petition for legal separation, and he had changed his will to exclude Wanda, expressly stating that he was contemplating dissolving his marriage to Wanda. In his capacity as successor trustee, Van retained counsel (Attorney Cheryl Barrett) who communicated with Macgurn to ask questions about Ben's testamentary intent: "[T]his is the critical part where we need your help. My client states that his father told him that Wanda had been taken out of the trust. At the time of the Fifth Amendment, we believe... Ben had already filed for separation and Wanda had responded with dissolution papers. My client thinks it odd, therefore, that Ben would still want to retain the [trust] provisions for Wanda's benefit and the wording here in this amendment leads one to think that Ben thought he had eliminated those provisions. What we need to know from you is what Ben's intentions were in stating that he had not provided for Wanda when in fact, he continues to do so via the Bypass and Marital Trusts...."
In response, Macgurn told Barrett that Ben had "retained me to prepare an amendment to the Survivor's Trust... [to disinherit Wanda] from the Survivor's Trust...." The Fifth Amendment "should state 'I revoke Articles IV through VII...', not Article VII, only. [My client's] intent [was] clear and the responsibility for the incorrect language is mine." Later, Macgurn signed a declaration to support Van's probate petition "to help secure what [Ben] wanted for his intended beneficiaries." He admitted to a "scrivener's error" with respect to his failure to amend the trust provisions that had provided Wanda with a life estate in the survivor's trust property. Macgurn stated it was Ben's intention "that upon his demise his entire estate would be distributed to [Van and Van's children]... and that Wanda would have no interest in his estate."
Later, Van, as trustee of the survivor's trust, sued Macgurn for legal malpractice and equitable indemnity. Macgurn testified in the trust matter in favor of Van's position that Wanda had been disinherited (as summarized above). He explained the other documents he prepared included a will and the trust transfer deed, which Ben wanted because he was in the process of a divorce. Additionally, he explains that the assignment he was given by the client, Ben, did not include tax planning, because Ben said he already had a tax planning trust. Macgurn thought it was unnecessary for himself to understand the value of the trust estate, or then-effective marital deduction amounts, because the previous estate tax planning of the original trust must have remained in effect, regarding the survivor's trust assets. He now admits the Fifth Amendment should have expressly revoked other dispositive provisions in the Third Amendment, regarding Wanda.
Wanda argues in response that Macgurn was merely testifying in self-interest to reduce his exposure to malpractice damages. She also argues that Macgurn had admitted to forgetting many of the details about the transactions, so his testimony was unreliable. Her theory is that the Fifth Amendment only affected her grandchildren, because Ben had decided not to provide for them, and did so through mentioning her in the children's trust.
3. Trial Testimony of Expert Goodwin; Conflicting Evidence
At trial, the court heard testimony from Wanda's expert estate planner, Goodwin. "As a general rule, the opinion of an expert is admissible when it is '[r]elated to a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact....' [Citation.]... 'Testimony in the form of an opinion that is otherwise admissible is not objectionable because it embraces the ultimate issue to be decided by the trier of fact.' [Citation.] However... there are limits to expert testimony, not the least of which is the prohibition against admission of an expert's opinion on a question of law." (Summers v. A.L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1178.)
The gist of Goodwin's expert testimony was to interpret the previous versions of the family trust to conclude that tax planning was of vital importance to Ben, and the Fifth Amendment should not be read to undo the advantages of marital tax exemptions, as found in the 1975 trust and in the Third Amendment.
It is clear that Macgurn's testimony conflicted with Goodwin's, regarding Ben's evaluation and understanding of tax issues. Macgurn was inconsistent in his own testimony about what he identified as the "dispositive provisions" of the previous versions of the trust. Macgurn took responsibility as the drafter of the Fifth Amendment, even though he had sent it away to his legal assistant and she had prepared it. Even when the trial court evaluates conflicting evidence, its factual findings are still to be applied for purposes of document interpretation, for drawing legal conclusions about it. (Estate of Hilton (1988) 199 Cal.App.3d 1145, 1168-1170.) Here, it was not appropriate for Goodwin as an expert to give evidence in the form of legal conclusions about the evident purposes of Ben as trustor.
There was also conflicting evidence about the value of the only meaningful trust asset, the commercial property that was leased to Van in his business (Costa Mesa). An appraiser testified this property was worth about $1.2 million, and there were disputes about its proper rental value. There were also disputes about whether the property would be subject to estate tax or whether it was tax-exempt as a trust asset, depending upon the validity of the Fifth Amendment. None of these tax-related issues is dispositive, because as we next explain, the crucial issue is that Macgurn's evidence was erroneously, and prejudicially, excluded.
C. Any Substantive Evidence for Court's Conclusion?
Extrinsic evidence as to the circumstances under which a written instrument was made is admissible to interpret the instrument, although not to give it a meaning to which it is not reasonably susceptible. (Estate of Russell, supra, 69 Cal.2d at p. 211.) As an appellate court, our function is to seek to give effect to the apparent intentions of the maker of the document. (Id. at p. 213.) We think that Macgurn's extrinsic evidence presents an interpretation or meaning of the Fifth Amendment of which it is reasonably susceptible. When that document is read as a whole and in context, it has the potential effect of impliedly amending the Third Amendment by removing the marital trust and therefore disinheriting Wanda. The trial court should have permitted that evidence to be admitted and considered as part of the overall interpretation of the trust documents, under all the relevant circumstances.
We draw this conclusion from the language of the Fifth Amendment that, as its first order of business, removes Wanda as successor trustee. This Fifth Amendment refers to specific provisions of the 1975 family trust and it therefore was apparently addressed to the original version of the trust, which in Ben's mind, had nothing to do with Wanda. He might well have believed that by signing the Fifth Amendment, he was reinstituting the 1975 trusts, thereby rescinding and revoking the Third Amendment that was created mainly to include Wanda as his then-wife. Macgurn testified he told Ben that was what he was accomplishing, and Ben states on page 2 of the three-page Fifth Amendment that he has "intentionally, and with full knowledge, failed and omitted to provide for" her. This language, omitting to provide for Wanda, appears under the heading, "Children's Trust," yet Wanda was never a beneficiary under that article. On its face, the document is ambiguous about whether it refers to Wanda or her children or grandchildren. That portion cannot be squared with other paragraphs of the Fifth Amendment that retain earlier versions of the trust, under which Wanda was a beneficiary (Third Amendment). Specifically, the conclusion of the Fifth Amendment may be susceptible of a reading to reinstate the original 1975 trust, containing the children's trust, as opposed to retaining the Third Amendment in effect. Macgurn's overall description of how the Fifth Amendment came to be executed, even with all its uncertainties and mistakes, supports inferences that Ben primarily intended to disinherit Wanda from his trust, which contained his separate property, and that he had the power to do so at that time.
Nevertheless, the trial court ruled otherwise. We think that if the trial court had admitted the evidence and considered it together with all the other evidence, it might have reached different conclusions. As the record currently stands, no substantial evidence supports the judgment that Wanda should remain a beneficiary of the survivor's trust, which contains Ben's separate property. Even though it is not clear what the ultimate correct reading will be: "Our concern has been with the process through which this conclusion was reached. Because we believe that a process which includes the admission of relevant extrinsic evidence will invariably result in a more accurate finding on controverted issues, we hold the court's rejection of extrinsic evidence was prejudicial error." (Hoover, supra, 136 Cal.App.3d 1019, 1029.)
Accordingly, the error was prejudicial and the judgment must be reversed, including the monetary relief awarded on the trust theories, with directions to admit the previously excluded extrinsic evidence and reconsider the merits of the trust beneficiary issues.
We need not separately address Wanda's request for attorney fees on appeal. The underlying attorney fee award by the probate court has been appealed and is being separately considered. The effect of this opinion, once it becomes final and further proceedings on remand have been conducted, is not yet clear on the attorney fees issues. At this time, no ruling on attorney fees on appeal is appropriate. However, the validity of the trust transfer deed of Ben's community interest in the Vista property must be separately resolved in this appeal, as we next discuss.
IV
TRUST TRANSFER DEED ISSUES
When he vacated the Vista property and met with Macgurn, Ben asked him to prepare a deed to transfer his one-half community interest in it into the survivor's trust. Macgurn prepared the deed and recorded it on February 7, 2006. Macgurn did not obtain Wanda's written consent to this transfer.
Around the same time, Ben signed a new will declaring that he was contemplating dissolving his marriage to Wanda and he was giving all his property to Van and his heirs. Ben's petition for legal separation was filed in March, and he died April 27. As successor trustee, Van claimed that one-half of the Vista property was owned by the survivor's trust. Wanda asserted the transfer was invalid and voidable because she did not consent to the transfer, and the probate court so ruled.
On appeal, Van contends the probate court erroneously found invalid the trust transfer deed regarding Ben's community interest in the Vista property, and should not have allowed it to be voided at Wanda's election. On appeal, these legal issues are presented on undisputed facts, and we may therefore interpret the document and the applicable statutory provisions de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-801.) The main section under dispute here is Family Code section 1102, subdivision (a) which states:
"Except as provided in Sections 761 [property transferred to a revocable trust, usually community-established trusts] and 1103 [dealing with incompetent spouse], either spouse has the management and control of the community real property... but both spouses, either personally or by a duly authorized agent, must join in executing any instrument by which that community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered." (Italics added.)
This specialized community property rule about the transfer of an interest in the family residence must be applied in this context with attention to when this community terminated, i.e., at the death of Ben, and with attention to the rules governing ownership of property by a trust. We first outline the parties' arguments, then discuss the property and community property principles that apply (regardless of which amended version of the trust, Third or Fifth, is in effect). The parties agree this is a case of first impression.
A. Issues Presented
The family residence was held "by husband and wife as community property." There was no right of survivorship expressly stated in the deed or otherwise provided for, as that would require more specification. (Fam. Code, § 750 [husband and wife may hold property as joint tenants, or tenants in common, or as community property, or as community property with a right of survivorship].) The authors of 5 Miller & Starr, California Real Estate (3d ed. 2000) section 12:61, page 12-174 explain: "There is no 'right of survivorship' with community property (unless the transfer document expressly provides that title is to be held in community property with right of survivorship) as there is with respect to joint tenancy, but the devolution of community property to the survivor when the deceased leaves no will produces a similar result.' " (Fn. omitted; also see 5 Miller & Starr, Cal. Real Estate, supra, (2008 supp.) § 8:23.1, pp. 47-48 [further explaining that community property with right of survivorship was not specifically authorized by statute (Civ. Code, §682.1) until July 2001].)
Family Code section 751 provides: "The respective interests of the husband and wife in community property during continuance of the marriage relation are present, existing, and equal interests."
According to Van, Ben had the authority to transfer his community property interest in the Vista property to the revocable survivor's trust, so that when he died, the trust would dispose of it (i.e., to the grandchildren/children), without the need for testamentary disposition. Van contends that before the death of Ben, there was no meaningful or actual "transfer" of interest that adversely affected Wanda's community property rights in the Vista property. Van contends that Family Code section 1102 did not require Wanda's consent for such a change in interests.
Family Code section 1102, subdivision (d) contains a one-year limitations period that "is intended to protect third parties who might rely on the recorded instrument; it is not a bar where the transfer takes place without the knowledge or consent of the nonsigning spouse and the transferee has knowledge of the marriage relationship. [Citation.]" (11 Witkin, Summary of Cal. Law (10th ed. 2005) Community Property, § 147, p. 715.)
As authority, Van relies on Estate of Mitchell (1999) 76 Cal.App.4th 1378, 1382 for the analogous proposition that a spouse's severance of a joint tenancy (by recording a declaration of severance) is not a "transfer" or a "disposition" of "property," such as to violate the community property rights of the other spouse. Van argues that Ben could transfer his rights in the Vista property from himself as a spouse, to himself as a trustee, without any forbidden conveyance of an interest taking place, that would affect control or possession of the property.
In response, Wanda states that the language of Family Code section 1102, subdivision (a) is mandatory, so that both spouses must join in executing any instrument through which an "interest" in community real property is "conveyed," outside of a transfer between spouses. (Fam. Code, § 1102, subd. (b).) Wanda (erroneously) relies on the temporary restraining order provisions of Family Code section 2040 et seq. to argue that Ben was restrained from making any such transfer. However, when the disputed trust transfer deed was executed, there were no family law petitions or temporary restraining orders yet in effect, and this section is not dispositive.
Alternatively, Wanda contends that Ben violated his fiduciary duties to her when he signed the trust transfer deed, when he did not obtain her consent. (Fam. Code, §§ 721, 1102.) She also asserts that she is entitled to a probate homestead, in case the community property interest in the Vista property should become part of his probate estate. (§ 6520 et seq.)
"Wrapped up in the bundle of community property management and control fiduciary obligations are fundamental restrictions on the right to transfer or dispose of community property [Fam. Code, §§ 1100, subds. (b), (c), 1102, subd. (a)]. Except as otherwise provided by law, noncompliance with these particular obligations gives rise to a [Family Code section] 1101 "claim" for breach of fiduciary duty [citation], as well as a 'set-aside' remedy on behalf of the aggrieved spouse [citation]." (Hogoboom and King, Cal. Practice Guide: Family Law (The Rutter Group 2008) ¶¶ 8:655, p. 8-158.11 (Family Law).)
In the statement of decision, the probate court noted that the parties had resolved the issues regarding the estate filing, and trial was held on the trustee's petition. The parties have not briefed issues regarding the probate homestead, except that Wanda seeks leave to raise those issues if reversal and remand is ordered regarding the trust transfer deed.
B. Property Transfer Considerations
Under section 104.5, when community and quasi-community property assets are transferred to a revocable trust, one presumes that those assets " 'retain their character in the aggregate for purposes of any division provided by the trust.' " (13 Witkin, Summary of Cal. Law, supra, Trusts, § 198, pp. 782-783.)
Family Code section 751 provides: "The respective interests of the husband and wife in community property during continuance of the marriage relation are present, existing, and equal interests." The first question here is whether, during his life, Ben could transfer to his survivor's trust his community interest as "property," without Wanda's consent. It is problematic here because the marriage/community interest would not terminate until either spouse died, or there was a judgment of dissolution. That is, the community continued to exist until Ben died. Also, any community interest he could transfer to his survivor's trust would be held by the trustee during the life of Ben, and when he died, that property interest would be poured over into the children's trust (under the Fifth Amendment, or to the marital trust, under the Third Amendment). This community interest would theoretically be held by a trust that was otherwise funded only with separate property. Moreover, while Ben still lived but if he became incapacitated, a successor trustee would take over administration of the trust, which could lead to conflict about the use of the family residence.
The authors of 13 Witkin, Summary of California Law, supra, Trusts, section 31, page 602 state: " 'A trust is created only if there is trust property.' ([Prob. Code, § ] 15202; [citation].) The property must be in existence and ascertainable. [Citations.] [¶]... Generally speaking, only property that is transferable may be held in trust. It may consist of intangibles such as choses in action, equitable interests, or even contingent interests, but not mere expectancies. [Citations.]" Here, the trust's rights in the community property would be only an expectancy, if the trust transfer deed was successful. By comparison:
"The interest of a joint tenant has been described as a specialized form of life estate with what amounts to a contingent remainder in fee, the contingency being dependent on which joint tenant survives. The right of survivorship is merely an expectancy, and not a property right, conditioned on the death of the other joint tenant. Presumably, the same concepts are applicable to community property with right of survivorship." (5 Miller & Starr, supra, § 12:23, p. 12-61, fns. omitted, citing Estate of Mitchell, supra, 76 Cal.App.4th 1378, 1392-1393.)
During Ben's lifetime, his community interest in the residence was only an expectancy for his separate property trust. It was not until his death that a cognizable half interest in the property arose that could be transferred without spousal consent. (Fam. Code, §§ 750, 751, 1102.)
C. Analysis
Normally, a decedent's interest in community property is subject to testamentary disposition at death. Under Family Code section 761, where a community trust holds community property and provides for a different method of disposition, then testamentary disposition is not necessary. "However, the traditional community property right of testamentary disposition is preserved by the unilateral power of revocation." (13 Witkin, Summary of Cal. Law, supra, Trusts, § 198, p. 783, citing the Cal. Law Revision Comm. Comm. to 29C West's Ann. Fam. Code (2004 ed.) foll. § 761, p. 372.) That section refers to characterization of "community property that is transferred in trust" as remaining "community property during the marriage," if there is a revocable family trust. The parties do not rely on this section, even though it is a stated exception to Family Code section 1102, because there was no transmutation nor was this a community trust to which community property was jointly conveyed. (E.g., "Community property distributed or withdrawn from a trust retains its character as community property in the absence of a valid transmutation at the time of revocation or withdrawal," 13 Witkin, Summary of Cal. Law, supra, Trusts, § 198, p. 783, Fam. Code, § 761, subd. (b); subd. (c) of § 761 [allows the trustee of such a trust to manage and control trust property without joinder or consent of the spouses, unless the trust expressly requires such joinder or consent].)
We think that, without the consent of Wanda, in light of the Family Code section 1102 requirements, during Ben's lifetime, he would have the power only to dictate the disposal of his one-half community interest in the Vista property by making a testamentary disposition. Until he died, the community still existed, and the terms of Family Code section 1102 accordingly required a consent from Wanda before his community interest in the family residence could be converted into his separate property interest, to be held in his survivor's trust. Otherwise, he would be "conveying" his expectancy interest to the trust, and thereby unilaterally recharacterizing the Vista property (effectively, all of it) during the marriage.
We question whether the body of law (not briefed by the parties), dealing with nonprobate community property transfers effective upon death, might conceivably apply to these undisputed facts. (§ 5010 et seq.) The authors of Family Law, section 8:659, page 8-158.11, explain this concept: "Notwithstanding [Fam. Code section] 1102, an instrument executed by a spouse providing for a nonprobate transfer of community property at death is effective to transfer his or her interest in the subject property at death even though not joined in by the other spouse (but the instrument is not effective as to the other spouse's interest in the property unless he or she consents in writing thereto). [Prob. [Code section] 5010 et seq., et al.]." Although this point was apparently not litigated below, we could discuss it here as a pure issue of law on undisputed facts. However, the theory of trial should prevail, and the only issues before us concern the applicability of Family Code section 1102.
In 5 Miller & Starr, California Real Estate, supra, section 12:58, page 12-165, these rules are further explained: "Under prior law, a spouse could not make a nontestamentary gift of community property, to be effective on the donor's death without the consent of the donor's spouse. Such a gift was voidable, at least to the extent of the surviving spouse's share of the community property. The Probate Code now makes such a gift valid under certain circumstances. [Prob. Code, §§ 141, 5010-5032.] [¶] The surviving spouse may or may not consent to a nonprobate gift of community property effective on the death of the donor. Any nonprobate transfer of community property on death is subject to the terms of the document of transfer and any specific applicable statute. [Prob. Code, §§ 5020-5021.] [¶] Any married person may make a nontestamentary gift of community property on death without the consent of his or her spouse. If the spouse does not consent, the transfer is not effective as to the nonconsenting spouse's interest in the community property...." (Fns. omitted.)
Ben's unilateral provision for a nonprobate transfer of his community interest effective upon his death, by means of transfer to his survivor's trust, was ineffective for lack of Wanda's consent. As explained above, the issues regarding the trust beneficiary are subject to further proceedings upon remand. However, the trial court was correct in ruling as a matter of law that the trust transfer deed was ineffective without consent of Wanda, under Family Code section 1102, and that ruling may stand.
DISPOSITION
The judgment is reversed with directions to conduct further proceedings admitting the extrinsic evidence on the trust beneficiary issues and to include it in the interpretation of the trust documents; with regard to the trust transfer deed, the trial court is directed to confirm its order regarding its invalidity. The remaining awards in the judgment that are related to the trust issues (monetary relief, reimbursement of attorney fees and costs, and accounting) are vacated, and those issues shall be resolved upon remand in accordance with the current circumstances found by the probate court. No appellate attorney fees are awarded; each party shall bear its own costs.
WE CONCUR: HALLER, J., IRION, J.