When it comes to heading-off potential lawsuits, one of the most powerful weapons in a trustee’s arsenal is the “notification by the trustee.” By sending this notice to beneficiaries and heirs, the trustee can cut the timeframe for filing a trust contest down to a mere 120 days. Because of this, a solid understanding of the procedural issues involved with the notification is critical for both the trustee and potential contestants.
In handling a trust contest, it is important to recognize that procedural issues in probate cases are governed by both the Probate Code and the Code of Civil Procedure. This can lead to somewhat complicated—and not always obvious—consequences. What’s more, guidance from the courts regarding the overlap of these two codes is scant. Luckily, in the past few months the Courts of Appeal have issued two opinions specifically discussing procedural issues involving the 120-day statute of limitations triggered by a trustee’s notice.
From these cases, we learn that a trust contest is “brought” at the time it is filed (not when it is served) and that the 120-day window is not extended simply because the notice is sent by mail.
With a typical revocable trust, the trust becomes irrevocable when the settlor dies. The trustee then has sixty days to give notice to the beneficiaries and heirs that the trust is now irrevocable. The Probate Code also requires the trustee to include the following information: (1) the identity of the settlor and date the trust was signed; (2) the trustee’s contact information; (3) the “principal place of administration” of the trust (usually the trustee’s residential or business address); (4) that the recipient is entitled to a copy of the trust; and (5) any additional information the trust requires the trustee to include. Finally, since the trust is now irrevocable because of the settlor’s death, the notice must also include the following warning (in its own paragraph and in not less than 10-point boldface font):
“You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is mailed or personally delivered to you during that 120-day period, whichever is later.”
What it Means to “Bring an Action”
In June, the Court of Appeals issued a decision clarifying what it means to “bring an action” to contest a trust. Straley v. Gamble III, 217 Cal. App. 4th 533 (2d Dist. 2013). In its published decision, the court interpreted this language in the Probate Code using (in part) the Code of Civil Procedure.
In the Straley case, a son filed a petition asking the probate court to determine whether the distribution provisions of his mother’s trust had been completely changed by virtue of a document purportedly signed by his mother shortly before her death. If valid, the entire trust estate would go to the son. The trustee had served the settlor’s son with the required notification and the son filed his petition within the 120-day window; however, the petition was not served on the trustee until several weeks later (187 days after the notification was sent).
The Court of Appeals decided that the settlor’s son did “bring an action” within the 120-day window. In reaching its decision, the court disagreed with the trustee’s argument that in order to “bring an action” a petition must be filed and served within the 120-day window. In support of its position, the court looked at the Code of Civil Procedure, which says that “[a]n action is commenced . . . when the complaint is filed.” The court also pointed out that, in civil actions, the statute of limitations stops running once the complaint is filed—not when it is served. So even though the Probate Code does not use the word “filed,” the Court of Appeals ruled that the requirement to “bring an action” within the 120-day window only requires that the petition be filed within that 120-day window.
Does the Code of Civil Procedure Extend the 120-day Window when the Notice is sent by Mail?
A few months later, another opinion dealing with the notification by the trustee and the 120-day window was issued. Bridgeman v. Allen, 219 Cal. App. 4th 288 (4th Dist. 2013). Here, the court decided whether the 120-day window for bringing a trust contest is extended where the notification by the trustee is sent by mail.
In this case, a son filed a petition to determine the validity of a trust amendment. The son first tried to file his petition 129 days after the notification was sent to him but his petition was rejected by the court. He ultimately filed the petition a few days later, 133 days after the notice was sent. Because it was filed outside of the 120-day window, the petition was dismissed.
On appeal, the settlor’s son argued that the 120-day window was extended ten days because of a rule contained in the Code of Civil Procedure. Under the Code of Civil Procedure, when a document is sent by mail, any duty to file a response is extended ten calendar days if either the place of mailing or the place of address is outside the State of California. This extension, though, only applies in the absence of a more specific statute. Because the settlor’s son lived outside California, he argued that his window for filing a petition was extended by ten calendar days—placing his first attempt to file his petition within the 120-day window.
The Court of Appeals, in reaching its decision, first looked at the procedural requirements of the Probate Code. The chapter of the Probate Code dealing with notice requirements states, “When the notice or other paper is deposited in the mail, mailing is complete and the period of notice is not extended.” The court highlighted the fact that the extension of time for filing outlined in the Code of Civil Procedure only applies in the absence of other rules, which is clearly not the case with the notification by the trustee. Because of this, the court ruled, the 120-day window is not extended simply because the notification by the trustee is sent by mail.
You Can’t Take Gold Stars to the Bank
When it comes to sending the required notification, a trustee needs to be proactive and serve the notice on all beneficiaries and heirs as soon as possible. Likewise, counsel for would-be contestants need to find out early on whether a notification by the trustee has been served and, if so, when the 120-day window closes.
Finally, while the relationship between the Probate Code and Code of Civil Procedure may offer many opportunities for creative arguments for individuals hit with the harsh reality of the 120-day statute of limitations, it is important to recognize that the Courts of Appeal have shown a reluctance to either enlarge or restrict the rights of litigants when it comes to enforcing the 120-day rule.