California Code of Civil Procedure 873.840 is the California partition statute that describes the treatment of successive estates in partition actions. The statute provides that:
(a) 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.
(b) The court shall ascertain the proportional value of any vested or contingent future right or estate in the property and shall direct such proportion of the proceeds of sale to be distributed, secured, or held in such a manner as to protect the rights and interests of the parties.
(c) Notwithstanding any other provision of this section, in the case of an estate for life or defeasible estate with remainder over, the court may direct that the entire proceeds of sale be placed in trust as provided in this section upon a showing that the establishment of such a trust is economically feasible and will serve the best interests of the parties. The court shall appoint a trustee, upon security satisfactory to the court, who under court supervision shall invest and reinvest the proceeds, pay the income of the investments, if any, to the life tenant or owner of the defeasible interest, and upon termination of the life or defeasible estate, deliver or pay the corpus of the trust estate to the remainderman. The court shall retain jurisdiction over the settlement of the accounts of the trustee and in all matters necessary for the proper administration of the trust and the final distribution of the trust fund.
California Code of Civil Procedure 873.840
“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.” Code Civ. Proc., § 873.840, subd. (c). [1]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. (4th ed.) § 12:24.
Under the heading “Termination by partition,” Miller & Starr, the leading secondary source on real estate law in California, provides that: “The estate of the life tenant ordinarily can be a proper subject of partition.” [2]§ 12:24. Termination; merger; partition, 4 Cal. Real Est. § 12:24 (4th ed.) (citing Riley v. Turpin (1956) 47 Cal. 2d 152, 158; Forrest v. Elam (1979) 88 Cal. App. 3d 164, 172).
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).
This seemingly allows a court to address a life estate or lifetime right of occupancy, terminating those interests and issuing payment where there is co-ownership.
Right of Occupancy vs. Life Estate
Sometimes, estate planning documents, such as a trust or will, grant a “right of occupancy” or “exclusive right of occupancy” to a particular person, perhaps a disabled child or surviving spouse.
At least one unpublished opinion has drawn a distinction between this right of occupancy as compared to a life estate as follows:
We first correct Mariana’s misconception that the Trust conferred a “life estate” in the Norwalk property to Genevieve. It did not.
As the probate court stated: “It is not uncommon for a trust to provide that a [named person] has the right to live in a residence rent-free for the remainder of his or her life or for a term of years. This type of arrangement does not grant the beneficiary a ‘life estate’ in the home; instead it creates what is called a right of occupancy. (See Le Breton v. Cook (1895) 107 Cal. 410, 419 [ (Le Breton ); and see] Weinfeld, The Right of Occupancy, California Lawyer, September 2015 40, 40.) … [¶] A right of occupancy does not grant the holder any kind of estate or title to the subject property…. A right to occupancy is personal to the holder and cannot be sold or transferred….”
The probate court’s discussion is amplified by Weinfeld, and we reiterate it, as we find his discussion helpful: “Many trusts provide that a [named person] has the right to live in a residence rent free for the remainder of his or her life. This type of provision is particularly common in a second marriage when the settlor (the person creating the trust) comes into the marriage with a home that is separate property and wants the surviving spouse to live there before the property passes to the settlor’s children…. [¶] Many practitioners believe that this type of arrangement grants the [occupier] a life estate in the home, but it does not. The provision creates what is called a right of occupancy. (See Le Breton v. Cook, supra, 107 Cal. at p. 419.) … [C]ase law does make clear that those rights of occupancy are different from life estates. (See Le Breton, supra, 107 Cal. at [p.] 419; Robbins v. Bueno (1968) 262 Cal.App.2d 79, 82; Dandini v. Johnson (1961) 193 Cal.App.2d 815, 820.) [¶] Unlike a life estate, a right of occupancy does not grant the holder any kind of estate or title to the subject property. During the period of the right of occupancy, title is held by the trustee of the trust. A right of occupancy is personal to the holder, and thus it generally cannot be sold or transferred … (See Le Breton, supra, 107 Cal. at p. 419; see also Cal. Prob. Code §§ 15300–15301.)” (Weinfeld, The Right of Occupancy, supra, at p. 40.)
Quezada v. Ramirez (Cal. Ct. App., June 16, 2017, No. B272093) 2017 WL 2609539, at *4
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References
| ↑1 | 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. (4th ed.) § 12:24. |
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| ↑2 | § 12:24. Termination; merger; partition, 4 Cal. Real Est. § 12:24 (4th ed.) (citing Riley v. Turpin (1956) 47 Cal. 2d 152, 158; Forrest v. Elam (1979) 88 Cal. App. 3d 164, 172). |
