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California Trust Administration in Court

As I have said before there it is amazing how many questions are answered in the California probate code relating to California probate, trusts, estates, estate planning, and related matters.  I have an interesting case right now where there is confusion with some poorly written terms of a trust and there is no successor trustee named in the trust. I don’t have to tell you that the decedent did the trust himself. When will people learn there really is a reason to hire experienced estate planning attorneys to plan your estate!?  Anyway, California probate code section 1720 can solve both of my problems in this case!

I have pasted section 17200 and related sections below for your perusal. First, look at section 17200(b)(1). The Court can determine questions of construction of a trust. Or look at section (3) where the Court can determine validity of a trust provision.  Second, look at section 17200(b)(10).  It says the Court can appoint a trustee. Perfect! We need a trustee in this case.

The California legislature has written a great law here! If you have questions about a trust or ambiguities in a trust this section will likely provide a basis for you to go to Court and get the problem solved.

If you are the trustee of a trust look through this list as you will see an amazing array of issues that can be solved.

Contact me with your questions.  -John

 

PROBATE CODE SECTION 17200-17211 17200. (a) Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust. (b) Proceedings concerning the internal affairs of a trust include, but are not limited to, proceedings for any of the following purposes: (1) Determining questions of construction of a trust instrument. (2) Determining the existence or nonexistence of any immunity, power, privilege, duty, or right. (3) Determining the validity of a trust provision. (4) Ascertaining beneficiaries and determining to whom property shall pass or be delivered upon final or partial termination of the trust, to the extent the determination is not made by the trust instrument. (5) Settling the accounts and passing upon the acts of the trustee, including the exercise of discretionary powers. (6) Instructing the trustee. (7) Compelling the trustee to do any of the following: (A) Provide a copy of the terms of the trust. (B) Provide information about the trust under Section 16061 if the trustee has failed to provide the requested information within 60 days after the beneficiary’s reasonable written request, and the beneficiary has not received the requested information from the trustee within the six months preceding the request. (C) Account to the beneficiary, subject to the provisions of Section 16064, if the trustee has failed to submit a requested account within 60 days after written request of the beneficiary and no account has been made within six months preceding the request. (8) Granting powers to the trustee. (9) Fixing or allowing payment of the trustee’s compensation or reviewing the reasonableness of the trustee’s compensation. (10) Appointing or removing a trustee. (11) Accepting the resignation of a trustee. (12) Compelling redress of a breach of the trust by any available remedy. (13) Approving or directing the modification or termination of the trust. (14) Approving or directing the combination or division of trusts. (15) Amending or conforming the trust instrument in the manner required to qualify a decedent’s estate for the charitable estate tax deduction under federal law, including the addition of mandatory governing instrument requirements for a charitable remainder trust as required by final regulations and rulings of the United States Internal Revenue Service. (16) Authorizing or directing transfer of a trust or trust property to or from another jurisdiction. (17) Directing transfer of a testamentary trust subject to continuing court jurisdiction from one county to another. (18) Approving removal of a testamentary trust from continuing court jurisdiction. (19) Reforming or excusing compliance with the governing instrument of an organization pursuant to Section 16105. (20) Determining the liability of the trust for any debts of a deceased settlor. However, nothing in this paragraph shall provide standing to bring an action concerning the internal affairs of the trust to a person whose only claim to the assets of the decedent is as a creditor. (21) Determining petitions filed pursuant to Section 15687 and reviewing the reasonableness of compensation for legal services authorized under that section. In determining the reasonableness of compensation under this paragraph, the court may consider, together with all other relevant circumstances, whether prior approval was obtained pursuant to Section 15687. (22) If a member of the State Bar of California has transferred the economic interest of his or her practice to a trustee and if the member is a deceased member under Section 9764, a petition may be brought to appoint a practice administrator. The procedures, including, but not limited to, notice requirements, that apply to the appointment of a practice administrator for a deceased member shall apply to the petition brought under this section. (23) If a member of the State Bar of California has transferred the economic interest of his or her practice to a trustee and if the member is a disabled member under Section 2468, a petition may be brought to appoint a practice administrator. The procedures, including, but not limited to, notice requirements, that apply to the appointment of a practice administrator for a disabled member shall apply to the petition brought under this section. (c) The court may, on its own motion, set and give notice of an order to show cause why a trustee who is a professional fiduciary, and who is required to be licensed under Chapter 6 (commencing with Section 6500) of Division 3 of the Business and Professions Code, should not be removed for failing to hold a valid, unexpired, unsuspended license. 17200.1. All proceedings concerning the transfer of property of the trust shall be conducted pursuant to the provisions of Part 19 (commencing with Section 850) of Division 2. 17201. A proceeding under this chapter is commenced by filing a petition stating facts showing that the petition is authorized under this chapter. The petition shall also state the grounds of the petition and the names and addresses of each person entitled to notice of the petition. 17202. The court may dismiss a petition if it appears that the proceeding is not reasonably necessary for the protection of the interests of the trustee or beneficiary. 17203. (a) At least 30 days before the time set for the hearing on the petition, the petitioner shall cause notice of hearing to be mailed to all of the following persons: (1) All trustees. (2) All beneficiaries, subject to Chapter 2 (commencing with Section 15800) of Part 3. (3) The Attorney General, if the petition relates to a charitable trust subject to the jurisdiction of the Attorney General. (b) At least 30 days before the time set for hearing on the petition, the petitioner shall cause notice of the hearing and a copy of the petition to be served in the manner provided in Chapter 4 (commencing with Section 413.10) of Title 5 of Part 2 of the Code of Civil Procedure on any person, other than a trustee or beneficiary, whose right, title, or interest would be affected by the petition and who does not receive notice pursuant to subdivision (a). The court may not shorten the time for giving notice under this subdivision. (c) If a person to whom notice otherwise would be given has been deceased for at least 40 days, and no personal representative has been appointed for the estate of that person, and the deceased person’ s right, title, or interest has not passed to any other person pursuant to Division 8 (commencing with Section 13000) or otherwise, notice may instead be given to the following persons: (1) Each heir and devisee of the decedent, and all persons named as executors of the will of the decedent, so far as known to the petitioner. (2) Each person serving as guardian or conservator of the decedent at the time of the decedent’s death, so far as known to the petitioner. 17204. (a) If proceedings involving a trust are pending, a beneficiary of the trust may, in person or by attorney, file with the court clerk where the proceedings are pending a written request stating that the beneficiary desires special notice of the filing of petitions in the proceeding relating to any or all of the purposes described in Section 17200 and giving an address for receiving notice by mail. A copy of the request shall be personally delivered or mailed to the trustee or the trustee’s attorney. If personally delivered, the request is effective when it is delivered. If mailed, the request is effective when it is received. When the original of the request is filed with the court clerk, it shall be accompanied by a written admission or proof of service. A request for special notice may be modified or withdrawn in the same manner as provided for the making of the initial request. (b) (1) An interested person may request special notice in the same manner as a beneficiary under subdivision (a), for the purpose set forth in paragraph (9) of subdivision (b) of Section 17200. The request for special notice shall be accompanied by a verified statement of the person’s interest. (2) For purposes set forth in paragraphs (2), (4) to (6), inclusive, (8), (12), (16), (20), and (21) of subdivision (b) of Section 17200, an interested person may petition the court for an order for special notice of proceedings involving a trust. The petition shall include a verified statement of the creditor’s interest and may be served on the trustee or the trustee’s attorney by personal delivery or in the manner required by Section 1215. The petition may be made by ex parte application. (3) For purposes of this subdivision, an “interested person” means only a creditor of a trust or, if the trust has become irrevocable upon the death of a trustor, a creditor of the trustor. (4) This section does not confer standing on an interested person if standing does not otherwise exist. (c) Except as provided in subdivision (d), after serving and filing a request and proof of service pursuant to subdivision (a) or paragraph (1) of subdivision (b), the beneficiary or the interested person is entitled to notice pursuant to Section 17203. If the petition of an interested person filed pursuant to paragraph (2) of subdivision (b) is granted by the court, the interested person is entitled to notice pursuant to Section 17203. (d) A request for special notice made by a beneficiary whose right to notice is restricted by Section 15802 is not effective. 17205. If a trustee or beneficiary has served and filed either a notice of appearance, in person or by counsel, directed to the petitioner or the petitioner’s counsel in connection with a particular petition and proceeding or a written request for a copy of the petition, and has given an address to which notice or a copy of the petition may be mailed or delivered, the petitioner shall cause a copy of the petition to be mailed to that person within five days after service of the notice of appearance or receipt of the request. 17206. The court in its discretion may make any orders and take any other action necessary or proper to dispose of the matters presented by the petition, including appointment of a temporary trustee to administer the trust in whole or in part. 17209. The administration of trusts is intended to proceed expeditiously and free of judicial intervention, subject to the jurisdiction of the court. 17210. In a case involving a charitable trust subject to the jurisdiction of the Attorney General, the Attorney General may petition under this chapter. 17211. (a) If a beneficiary contests the trustee’s account and the court determines that the contest was without reasonable cause and in bad faith, the court may award against the contestant the compensation and costs of the trustee and other expenses and costs of litigation, including attorney’s fees, incurred to defend the account. The amount awarded shall be a charge against any interest of the beneficiary in the trust. The contestant shall be personally liable for any amount that remains unsatisfied. (b) If a beneficiary contests the trustee’s account and the court determines that the trustee’s opposition to the contest was without reasonable cause and in bad faith, the court may award the contestant the costs of the contestant and other expenses and costs of litigation, including attorney’s fees, incurred to contest the account. The amount awarded shall be a charge against the compensation or other interest of the trustee in the trust. The trustee shall be personally liable and on the bond, if any, for any amount that remains unsatisfied.

Ratings and Reviews

10.0John Bernard Palley
Wealth Counsel Member
2015 Best of the Best Badge