California Code of Civil Procedure 873.830 is the California partition statute that authorizes setoff instead of payment. The statute provides that:
Where a part only of the property is sold, a tenant for life or years in an undivided share of the whole property may have his estate equitably set off in any part of the property not sold by way of complete or partial satisfaction of his share of the proceeds.
California Code of Civil Procedure 873.830
In other words, “A right to proceeds based on an estate for life or for years may be wholly or partially satisfied by an equitable setoff in a part of the property not sold.” [1]
Subsection (a) of the California Code of Civil Procedure 873.840 states that “The court shall ascertain the proportion of the proceeds of sale that will be a just and reasonable sum for the satisfaction of the estate of a tenant for life or years and shall order such amount distributed to him or held for his benefit.”
Other cases of importance in this area of law include In re Giacomelos’ Estate (1961) 192 Cal.App. 2d 244, 246–251, Forrest v. Elam (1979) 88 Cal.App.3d 164, 172, and Riley v. Turpin (1956) 47 Cal.2d 152, 158 (life estate must be valued in partition action).
As one court explained, “the fact that Joan Davis paid 80 percent of the inheritance tax does not mean she would get 80 percent of the proceeds on a sale of the property. The court would determine what was a just and reasonable sum for satisfaction of the extinguished life estate.” Estate of Kolda (1982) 133 Cal.App.3d 283, 288.
California Code of Civil Procedure 872.210 authorizes “An owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates” to commence or maintain a partition action. [2]
Therefore, a life estate holder is statutorily authorized to either commence or maintain a partition action.
Furthermore, “When partition of successive estates is appropriate but hardship might result from a sale and division of the proceeds, the court may establish a trust of the proceeds for the benefit of the successive interest holders.” [3]
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References
| ↑1 | Disposition of Proceeds., 12 Witkin, Summary 11th Real Prop (2021) § 80. |
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| ↑2 | Cal. Code Civ. Proc. 872.210 (a)(2) |
| ↑3 | ”Code Civ. Proc., § 873.840, subd. (c). See In re Giacomelos’ Estate, 192 Cal.App. 2d 244, 246–251, 13 Cal.Rptr. 245 (1st Dist. 1961).” Termination; merger; partition, 4 Cal. Real Est. § 12:24 (Miller & Starr, 4th ed.) |
