Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of Riverside County. James A. Cox, Judge. Super.Ct.No. INP019767.
Boudreau Williams and Jon R. Williams for Plaintiff and Appellant.
Best Best & Krieger, Douglas S. Phillips, G. Henry Welles, and Kira L. Klatchko, for Defendants and Respondents.
OPINION
McKINSTER, J.
Plaintiff and appellant Kenneth Pine appeals after the trial court granted summary judgment in favor of defendant and respondent John Caranci in the underlying probate proceeding. We affirm.
FACTS AND PROCEDURAL HISTORY
Plaintiff’s grandparents, Ben and Jeanne Eisenberg, were the settlors of the Eisenberg Living Trust (the Trust). The Trust instrument, executed in 1996, provided for the creation of two sub-Trusts on the death of the first settlor: Trust A, a revocable Trust, would be for the benefit of the survivor. Trust B, an irrevocable Trust, would be funded only if the survivor elected to make an effective disclaimer under Internal Revenue Code section 2518 (26 U.S.C.A., § 2518) and any relevant regulations.
Among other provisions, the Trust expressly disinherited the settlors’ children, the children’s spouses, their issue, or anyone claiming through them. Plaintiff and his siblings are the children of the settlors’ daughter, Elaine Pine.
The Trust was amended eight times. Both settlors executed the first three amendments, in June 1996, March 1997, and August 1997. The third amendment appointed plaintiff’s father and brother as successor Trustees, and designated plaintiff and his siblings as beneficiaries.
Ben Eisenberg died on October 26, 1998. Thereupon, Trust A and Trust B came into existence. The assets were allocated to Trust A, and the amendment designating plaintiff and his siblings as the beneficiaries of Trust B became irrevocable. No funds were allocated to Trust B.
Jeanne Eisenberg amended the Trust five additional times. The fourth amendment, executed December 1998, two months after Ben’s death, appointed Mary, Roland and Leslie Garcia as successor Trustees of Trust A. Among other provisions, the fourth amendment declared that Jeanne “did not disclaim and all assets of the Trust Estate were allocated to Trust A.” The fourth amendment specified the distribution of the Trust A assets on Jeanne’s death, among the Garcias and to John and Frank Caranci. The fourth amendment reiterated the recitals disinheriting the settlors’ children, their spouses, or their issue.
The fifth Trust amendment was executed in March 1999, five months after Ben’s death. The fifth amendment changed the nomination of successor Trustees to John and Frank Caranci, as well as the distribution of Trust assets (to John and Frank Caranci, and Paul Goldfine). As before, however, the fifth Trust amendment recited that Jeanne “did not disclaim and all assets of the Trust estate were allocated to Trust ‘A.’ ” The disinheritance clause was also repeated.
The sixth Trust amendment was executed on May 20, 1999. This was approximately seven months after Ben’s death. This amendment made more changes to the distribution of the assets (to John, Frank, Beverly and Sheree Caranci), but again recited that Jeanne “did not disclaim and all assets of the Trust estate were allocated to Trust ‘A.’ ”
A seventh Trust amendment was executed on August 23, 2000. This was one year and 10 months after Ben’s death. The seventh amendment appointed plaintiff’s brother and Jeanne’s attorney, Barbara Knox, as successor Trustees, and directed the Trust estate to be distributed to plaintiff and his siblings. For the first time, however, this amendment recited that Jeanne “has disclaimed an amount equal to Ben C. Eisenberg’s Unified Credit to Trust B.”
Jeanne amended the Trust an eighth time, in November 2003, five years after Ben’s death. The eighth Trust amendment again recited that Jeanne “has disclaimed an amount equal to Ben C. Eisenberg’s Unified Credit to Trust B,” but changed Trustees and beneficiaries once more, naming John and Beverly Caranci as successor Trustees and directing distribution to Shriner’s Children’s Hospital and to John and Beverly Caranci. The eighth Trust amendment republished the disinheritance clause, directing that Jeanne’s children, their spouses, their issue, and anyone claiming through them “take nothing from this Trust or from Trustor’s estate.”
Jeanne died on August 10, 2004.
Plaintiff filed an amended petition, alleging that he and his siblings are the grandchildren of the Trustor (Jeanne), and the named beneficiaries of Trust B. Plaintiff pointed to the statements in the seventh and eighth Trust amendments, to the effect that Jeanne had disclaimed an amount of the Trust assets equal to Ben’s federal unified gift and estate tax credit ($625,000). Plaintiff argued that that sum had thus been allocated to Trust B, and it had been funded in that amount.
John Caranci and Beverly Caranci, as the successor trustees of the Trust, objected to plaintiff’s petition. They pointed out that under the Trust itself, and repeated in the second, third, fourth and eighth Trust amendments, plaintiff and his siblings had been specifically disinherited. Second, the recitals in the seventh and eighth Trust amendments, to the effect that Jeanne “ha[d] disclaimed an amount equal to Ben C. Eisenberg’s Unified Credit,” and assigned those funds to Trust B, did not themselves constitute actual disclaimers as required under the Trust. Among other reasons, the recitals in the seventh and eighth Trust amendments did not satisfy the requirements of Internal Revenue Code section 2518, as required in the Trust. Third, the Carancis asserted that the recitals in the fourth, fifth and sixth Trust amendments had already assigned and accepted all of the Trust assets into Trust A. The Carancis argued that Jeanne never made an effective disclaimer, so that Trust B never funded.
The Carancis moved for summary judgment on the ground that plaintiff could not establish an essential element of his claim: that Jeanne made a timely, written, effective disclaimer under Internal Revenue Code section 2518, as required by the Trust.
Plaintiff argued that, although he could not produce any documentary written disclaimer, the recitals in the seventh and eighth Trust amendments referred to such a disclaimer, and thus inferentially supported its existence. Additional testimony of Jeanne’s attorney, as well as statements other witnesses had heard Jeanne make, could support an inference that Jeanne made a disclaimer.
The trial court granted the motion for summary judgment. Plaintiff appeals from the formal judgment eventually entered after granting the motion for summary judgment.
ANALYSIS
I. Standard of Review on Summary Judgment
A motion for summary judgment in the trial court “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) An appellate court reviews de novo a trial court’s decision to grant a summary judgment motion. (Panagotacos v. Bank of America (1998) 60 Cal.App.4th 851, 855.) In so doing, we follow the same three-step process used by the trial court: (1) identifying the issues framed by the complaint, (2) determining whether the moving party has made an adequate showing that negates the opponent’s claim, and (3) determining whether the opposing party has raised a triable issue of fact. (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1662.)
II. Step One—The Issues
The key issue at the heart of plaintiff’s petition, and of the Carancis’ motion for summary judgment, is whether Jeanne made a timely, effective written disclaimer of a portion of the Trust proceeds, by which she funded Trust B.
The Trust, in article III, provided:
“3. DIVISION AND ALLOCATION OF ASSETS. The Trust Estate, and distributions received by this Trust from the estate of the deceased SETTLOR (if any), shall be allocated among [Trust A and Trust B] as follows:
“A. Except as provided in Subparagraph B and Paragraph 4, the entire Trust Estate shall be allocated to TRUST ‘A.’
“B. If the surviving SETTLOR, in his or her capacity as beneficiary, effectively disclaims (under Code Section 2518 [of the Internal Revenue Code] or any successor provision then in effect) all, or any specific portion, of his or her interest in TRUST ‘A’, such disclaimed amount shall be allocated to TRUST ‘B’ to be held, administered and distributed according to its provisions.” (Italics added.)
The Trust therefore required any disclaimer funding Trust B to be effective, according to any procedures required under Internal Revenue Code section 2518, or any similar relevant tax provision.
Internal Revenue Code section 2518 was in effect at the relevant times herein and provides in part: “(b) Qualified disclaimer defined.—For purposes of subsection (a), the term ‘qualified disclaimer’ means an irrevocable and unqualified refusal by a person to accept an interest in property but only if
“(1) such refusal is in writing,
“(2) such writing is received by the transferor of the interest, his legal representative, or the holder of the legal title to the property to which the interest relates not later than the date which is 9 months after the later of
“(A) the day on which the transfer creating the interest in such person is made, or
“(B) the day on which such person attains age 21,
“(3) such person has not accepted the interest or any of its benefits, and
“(4) as a result of such refusal, the interest passes without any direction on the part of the person making the disclaimer and passes either
“(A) to the spouse of the decedent, or
“(B) to a person other than the person making the disclaimer.” (26 U.S.C.A., § 2518(b).)
Thus, to make an effective disclaimer, Jeanne had to have done so (1) irrevocably, (2) in writing, (3) by delivering the writing to the transferor of the interest (Jeanne herself), or her legal representative, or the Trustee (herself) as holder of legal title, (4) within nine months after the date creating the interest in Jeanne (i.e., Ben’s date of death). Jeanne also had to have (5) not accepted an interest in the property or any of its benefits, and (6) accomplished the passing of the interest, without any direction on Jeanne’s part, to someone other than herself.
III. Step Two—The Moving Papers Showed That the Carancis Were Entitled to Judgment in Their Favor
According to the showing made in the Carancis’ moving papers, there was no evidence to establish that Jeanne had made an effective disclaimer under the statutory definition, as required by the provisions of the Trust.
First, the supposed disclaimer failed on the requirement of a writing. There was no written disclaimer ever found. Even the recitals in the seventh and eighth Trust amendments do not state or indicate that the purported disclaimer was made in writing.
Second, the disclaimer failed on the ground of delivery or receipt by the trustee of the Trust.
Third, the disclaimer failed on the ground of timeliness. Any written disclaimer would have had to be made and delivered within nine months after the later of two specified dates: the date of the transfer creating the interest (Ben’s date of death, October 26, 1998), or the date Jeanne had turned 21 years old. Ben’s date of death is the operative date; nine months after that triggering date was July 26, 1999. Between the date of death and the expiration of the nine-month period, Jeanne three times stated that she had made no disclaimer. As late as May 1999, only two months before the end of the nine-month period, Jeanne again declared that she had made no disclaimer. The first indication that Jeanne might have attempted to make a disclaimer occurred in the seventh Trust amendment, in August 2000. This was over a year after the expiration of the nine-month period. Nothing showed that Jeanne had made any disclaimer before that time.
Fourth, the disclaimer failed on the ground of nonacceptance of the Trust property and benefits into Trust A. As noted, three separate times, in the fourth, fifth and sixth Trust amendments, Jeanne had expressly written that she did not disclaim any of the Trust property, and that the whole had been allocated to and accepted in Trust A.
The moving papers, on their face, plainly entitled the Carancis to judgment in their favor.
IV. Step Three—Plaintiff Failed to Raise a Triable Issue of Material Fact
Plaintiff opposed the motion for summary judgment, arguing that there was evidence of an effective, valid written, timely disclaimer.
Plaintiff pointed first to the recitals in the seventh and eighth Trust amendments. The recitals, in themselves, indicated that Jeanne had made some effort to disclaim $625,000 and allocate it to Trust B; that is, Jeanne’s amendments stated that she “ha[d] disclaimed an amount equal to Ben C. Eisenberg’s Unified Credit to Trust B.”
Second, plaintiff relied on the testimony of Jeanne’s attorney, Barbara Knox, who had drafted the Trust amendments. Attorney Knox testified in her deposition that, up to a certain point in time, there had been no disclaimer and that Jeanne had told Knox there had been no disclaimer. Knox recommended that Jeanne consult an accountant to discuss any disclaimer issues. Knox could not recall having any discussion with Jeanne about disclaimers, other than to recommend that she consult an accountant. In the time frame of 1999, Knox did not recall preparing disclaimers for any of her clients. Knox had prepared the seventh Trust amendment. With respect to the seventh amendment, Knox did not recall whether Jeanne had told her she made a disclaimer: “That, I don’t recall. I don’t recall whether she told me or whether I saw the document. . . . I just can’t recall.” Knox did agree, however, that she “would not have typed [the disclaimer] language in [the seventh Trust amendment] unless [Jeanne] either told [Knox] she had disclaimed or [Knox] saw that [Jeanne] had disclaimed.” Knox could recall no discussions with Jeanne about disclaimer in connection with the seventh amendment. Knox further agreed that, “if your client showed you a disclaimer that was beyond this nine-month time frame, your custom and practice in 2000 would have been to advise them that the disclaimer that they had executed was beyond the nine-month limitation period.” Knox had no recollection about talking with Jeanne about a disclaimer beyond the nine-month period and expected that she would recall such a conversation if it had taken place.
Third, Marshall Pines, plaintiff’s father, filed a declaration stating the following: In 1997, Jeanne told plaintiff’s father that she and Ben had changed their Trust so that plaintiff and his siblings would inherit the entire estate after both she and Ben died. In June 2000, Jeanne told plaintiff’s father that plaintiff and his siblings “were still the beneficiaries of her estate.” In August 2000, Jeanne told plaintiff’s father that “she had previously disclaimed for distribution to the kids. She explained that the disclaiming was related to avoiding probate and estate taxes.”
Plaintiff urges that “lost” documents may be proven by secondary and indirect evidence (Estate of Janes (1941) 18 Cal.2d 512), and that his showing in opposition to the motion for summary judgment was “compelling” evidence of the existence of a proper disclaimer.
Unfortunately for plaintiff, his evidence establishes no such thing.
Plaintiff’s own declaration recites that neither he nor any of his siblings has an original or any copy of any purported written disclaimer document. In Janes, the question was whether a decedent’s lost will could be proven by presenting a copy. (Estate of Janes, supra, 18 Cal.2d 512, 514-515.) Here, there was no evidence that either an original or a copy of any purported written disclaimer had ever existed at all. Thus, Janes provides no comfort to plaintiff.
The declaration of plaintiff’s father makes no reference to, and provides no evidence of, the existence of any valid, effective, timely, written disclaimer. In 1997, before Ben’s death, Jeanne told him that the grandchildren would inherit the entire estate. That statement is irrelevant to show the existence of any written disclaimer. In June 2000, Jeanne purportedly told plaintiff’s father that the grandchildren were “still” the beneficiaries of her estate; to the extent this suggests a continuing state of affairs, that the grandchildren were named beneficiaries of the entire estate, it was simply patently false, as the Trust amendments in 1998 and 1999 not only named other beneficiaries, they also affirmatively disinherited the grandchildren. In any case, this representation, made in June 2000, makes no reference whatever to the existence of any written disclaimer document. Jeanne’s statement, in August 2000, that she had “previously disclaimed” in favor of the grandchildren, is the sole statement that might conceivably refer to a formal, written disclaimer. It occurred over a year after the expiration of the nine-month period.
The testimony of Knox likewise does not establish the existence of any written document. At best, Knox could not remember whether she had seen any such document. She testified that she would not have prepared the disclaimer language in the seventh and eighth Trust amendments unless Jeanne had either shown her a document or told her that a disclaimer had been made. The testimony that, if Knox had seen a document dated beyond the nine-month period, she normally would have advised the client it was untimely, and that she would have expected to remember any such conversation, implies not that there was a document, but rather militates against the inference that Knox had seen any such document. Although plaintiff may speculate that Knox saw a written disclaimer document, Knox affirmatively testified that she had no such memory, and Knox provided an alternate reason for including the disclaimer language in the amendments (i.e., Jeanne “told her” that she had disclaimed). “ ‘Speculation, however, is not evidence’ that can be utilized in opposing a motion for summary judgment. [Citations.]” (Knapp v. Doherty (2004) 123 Cal.App.4th 76, 99.)
The seventh and eighth Trust amendments do not themselves constitute an effective written disclaimer.
In short, none of plaintiff’s evidence establishes more than a mere speculation or supposition that a written disclaimer had ever existed. In addition, even if the supposition of a written disclaimer be granted, no evidence establishes that it was timely, or that it was effective or valid, in face of the manifest acceptance, in the fourth, fifth and sixth Trust amendments, of the whole Trust estate and its allocation to Trust A.
Plaintiff’s evidence fell far short of raising a triable issue of fact as to the existence of an effective, written, properly delivered, timely disclaimer of assets which had been irrevocably refused and as to which the disclaiming party had not accepted any benefits.
V. No Nondisclaimer Transfer Was Made
Plaintiff offers a final plea that, even in the absence of a valid disclaimer, Jeanne had made manifest an unequivocal intent to transfer a substantial share of the Trust assets to the grandchildren, and the probate court erred in failing to honor that intent.
Again, the Trust itself provided the proper procedures for allocation of assets to Trust A and Trust B; the sole mechanism for funding Trust B—a purely tax-saving provision—was by making an effective disclaimer under the relevant Internal Revenue Code statutes. The Trust itself also provided the means for naming the beneficiaries or distributees of Trust A. Jeanne named others, not the grandchildren, as the beneficiaries of Trust A. During her lifetime, of course, Jeanne could have made other gifts and dispositions, but she did not actually carry out any acts to do so. She made no inter vivos direct transfers or gifts. She did not name the grandchildren as beneficiaries, but instead repeatedly disinherited them. The recitals of disclaimer in the seventh and eighth Trust amendments were ineffective to meet the requirements of the Trust to make any gift to plaintiff and his siblings.
DISPOSITION
The judgment is affirmed. Costs on appeal to defendants and respondents.
We concur: RAMIREZ, P. J., MILLER, J.