As trusts and estates litigation counsel, we often have matters where a fiduciary, either as a trustee, conservator, personal representative, or agent under a power of attorney, fails to provide financial information when properly requested, or to provide an accounting if one is required under law.  The result is that the person seeking the accounting may be left with no alternative but to file a petition with the court for an order compelling the fiduciary to submit an accounting, most commonly by requesting that the accounting be filed within the court proceeding.
Continue Reading Bringing Down the Hammer – California Appellate Court Upholds $1,000 Per Day Sanction For Failure To Timely File Accounting

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.

The Notification:

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.”


Continue Reading When Applying the 120-Day Statute of Limitations Under Probate Code § 16061.8, When is a Trust Contest “Brought?”

EdCTrust beneficiaries and litigators beware: the recent case of Drake V. Pinkham ((2013) 217 Cal.App.4th 400) highlights the dangers of waiting to file a trust contest until after the settlor’s death when questions regarding the settlor’s competency arise during the settlor’s lifetime.

Typically, revocable trusts are just that – revocable. A settlor can modify or terminate his or her revocable trust up until death, presuming that he or she retains the capacity to do so. Because a competent settlor has the legal right to change his or her revocable trust up until death, a beneficiary does not usually have the right to contest the revocable trust during the settlor’s lifetime.

The limitation on a beneficiary’s ability to contest a revocable trust during the settlor’s lifetime is contained in Probate Code section 15800. Section 15800 specifically provides that the person holding the power to revoke a trust (e.g. the settlor), and not the beneficiaries, holds the rights under the trust during the time the trust is revocable and the settlor is competent.

But if Probate Code section 15800 prevents a beneficiary from contesting a revocable trust when the settlor is competent, does that mean that a settlor must be formally deemed incompetent before a beneficiary can bring a contest during a settlor’s lifetime? And what happens if a beneficiary, believing a settlor to be incompetent, waits until after the settlor’s death to bring a contest – will that contest fail as untimely?


Continue Reading In Trust Disputes Where Competency of the Settlor is an Issue, Waiting Until After the Settlor’s Death to File A Trust Contest Can be Fatal