Chapter 6 - Rights of Creditors

California Probate Code — §§ 680-684

Sections (5)

Amended by Stats. 2016, Ch. 81, Sec. 23. (AB 2846) Effective January 1, 2017.

The donor of a power of appointment cannot nullify or alter the rights given creditors of the powerholder by Sections 682, 683, and 684 by any language in the instrument creating the power.

§ 681

Amended by Stats. 2016, Ch. 81, Sec. 24. (AB 2846) Effective January 1, 2017.

(a)Except as provided in subdivision (b), property covered by a special power of appointment is not subject to the claims of creditors of the powerholder or of the

powerholder’s estate or to the expenses of the administration of the powerholder’s estate.

(b)Property subject to a special power of appointment shall be subject to the claims of creditors of the powerholder or of the powerholder’s estate or the expenses of administration of the powerholder’s estate under either of the following circumstances:

(1)To the extent that the powerholder owned the property and, reserving the special power, transferred the property in violation of the Uniform Voidable Transactions Act (Chapter 1 (commencing with Section 3439) of Title 2 of Part 2 of Division 4 of the Civil Code).

(2)If the initial gift in default of the exercise of the power is to the powerholder or the powerholder’s

estate.

§ 682

Amended by Stats. 2016, Ch. 81, Sec. 25. (AB 2846) Effective January 1, 2017.

(a)To the extent that the property owned by the powerholder is inadequate to satisfy the claims of the powerholder’s creditors, property subject to a general power of appointment that is presently exercisable is subject to the claims to the same extent that it would be subject to the claims if the property were owned by the

powerholder.

(b)Upon the death of the powerholder, to the extent that the powerholder’s estate is inadequate to satisfy the claims of creditors of the estate and the expenses of administration of the estate, property subject to a general testamentary power of appointment or to a general power of appointment that was presently exercisable at the time of the

powerholder’s

death is subject to the claims and expenses to the same extent that it would be subject to the claims and expenses if the property had been owned by the powerholder.

(c)This section applies whether or not the power of appointment has been exercised.

§ 683

Amended by Stats. 2016, Ch. 81, Sec. 26. (AB 2846) Effective January 1, 2017.

Property subject to a general power of appointment created by the donor in the donor’s favor, whether or not presently exercisable, is subject to the claims of the donor’s creditors

or the donor’s estate and to the expenses of the administration of the donor’s estate, except to the extent the donor effectively irrevocably appointed the property subject to the general power of appointment in favor of a person other than the

donor or the donor’s estate.

§ 684

Amended by Stats. 2016, Ch. 81, Sec. 27. (AB 2846) Effective January 1, 2017.

For the purposes of Sections 682 and 683, a person to whom the powerholder owes an obligation of support shall be considered a creditor of the powerholder to the extent that a legal obligation exists for the powerholder to

provide the support.