## Facts

- Western Land & Development Company, a partnership of David F. Dawes and Ronald S. Schwab, owned the Rancho Carlsbad mobilehome park.
- Park tenants challenged rent increases and filed multiple lawsuits against Western, Dawes, and Schwab seeking rescission and damages.
- In 1983, David and his wife, Dorothy, transferred community property into an inter vivos trust that was revocable during both spouses’ lifetimes and treated the property as community property while both lived.
- The trust provided that upon the first spouse’s death, the decedent’s one-half community share would be allocated into “B” and “C” subtrusts that were irrevocable, with income to the survivor for life and remainder to descendants.
- Dorothy died in 1990; her one-half community share was placed into the B and C trusts, administered by the Dawes children as trustees.
- Tenant judgments against David Dawes and Schwab were entered in later years; David filed bankruptcy.
- In 1995, the tenants attempted to levy by writ of execution on assets held in the B and C trusts to satisfy their judgments, and also filed civil actions seeking to reach those assets.

## Issues

1. Whether a deceased spouse’s share of community property, placed into post-death irrevocable subtrusts, remains substantively liable for community debts incurred during marriage.
2. Whether creditor efforts to enforce such liability against assets traceable to the deceased spouse are subject to the one-year limitations period for actions on a decedent’s liabilities, and thus are time-barred if brought later.

## Decision

- The Court of Appeal affirmed the probate order and civil judgments in favor of the trustees.
- The court held that the decedent’s share of community property may remain liable for community debts after death, including when held in the B and C subtrusts.
- The court held that enforcement efforts against assets attributable to the deceased spouse are governed by the statutory scheme for liabilities of a decedent, including the one-year limitations period.
- Because the tenants did not commence proceedings to subject the B and C trust assets to their claims within one year of Dorothy’s death, their claims were barred and the writs and civil actions could not reach the B and C trust property.

## Legal Principles

- Community property is generally liable for debts incurred by either spouse before or during marriage, and the decedent’s share can remain liable after death.
- When a creditor seeks recovery from assets traceable to a deceased spouse’s property interest, the claim is treated as an action on a liability of the decedent.
- Actions on a decedent’s liabilities are subject to a strict one-year limitations period running from the date of death (under the then-applicable statute, reflected in current Code of Civil Procedure section 366.2).
- Creditors cannot avoid the one-year bar by styling the proceeding as execution, declaratory relief, or an action against trustees rather than an action on the decedent’s liability.

## Conclusion

A deceased spouse’s share of community property placed into irrevocable post-death trusts may remain liable for community debts, but creditors must assert and pursue such claims within the one-year limitations period for liabilities of a decedent; otherwise, enforcement against those trust assets is barred.


Dawes v. Rich, 60 Cal. App. 4th 24 (Cal. Ct. App. 1997)