Understanding the significance of trustee notice, as mandated by Probate Code Section 16061.7, is crucial in trust administration. This notice is required upon the occurrence of certain events, most notably, when a trust becomes irrevocable as a result of the death or one or more settlors of the trust. The notice is sent to beneficiaries of the trust and heirs of the deceased settlor. The notice provides basic information regarding the trust administration such as the name of the trust, the settlor and trustee, and the address of the trustee.
The notice also informs the recipient that the recipient is entitled to a copy of the trust and that the recipient cannot bring an action to contest the trust after the later of 120 days from the date of the notice or 60 days after receipt of a copy of the trust, provided the request for the trust was made during the 120-day period. Probate Code Section 16061.8 codifies the limitation period to file an “action to contest the trust” to the later of 120 days from the date of the notice or 60 days after receipt of a copy of the trust, provided the request for the trust was made during the 120-day period.
A recent case, Hamilton v. Green, 316 Cal. Rptr. 3d 632 (2023) highlights the importance of paying attention to the trustee notice and bringing any action to contest the trust within the above time period. The facts of Hamilton v. Green are pretty straightforward. Settlor created a trust in 1991. The trust provided that on Settlor’s death, the trust estate would be split evenly between her son and daughter, and if son or daughter did not survive the Settlor, their share would go to their descendants.
In 2002, a purported handwritten amendment to the trust provided that if there was only one survivor among son and daughter, that person would receive the entire trust estate. The son died in 2004 and the Settlor died in 2019. Son had two surviving children. After the Settlor’s death, the daughter informed son’s children that she was the sole beneficiary. They asked for a copy of the trust and she refused.
In January 2020, they then filed a petition to have her removed as trustee and to compel a copy of the trust. On April 17, 2020, the daughter served son’s children with the trustee notice along with a copy of the trust and amendment, thus starting the 120-day period to file an action to contest the trust.
Son’s children did not file another action to contest the trust until nearly a year later in March 2021, when they sought leave to amend their earlier petition to challenge the trust. The probate court denied leave to amend the petition, and as a result, they filed a civil action for interference with inheritance rights, arguing that the amendment was a forgery that disinherited them. Upon motion by the daughter, the trial court agreed with daughter that the civil action was time barred under Probate Code Section 16061.8, because the action was not filed within 120 days of daughter’s provision of the trustee notice and copies of the trust and trust amendment.
Son’s children appealed the trial court’s ruling, and the court of appeal agreed with the trial court. The court of appeal noted that in determining whether an action was an action to contest the trust under Section 16061.8, the court must look beyond the label of the action and determine whether the action was one, the practical effect of which, was to challenge the validity of the trust or trust amendment. In applying that standard, the court concluded that regardless of how the cause of action for interference with inheritance rights was pled, son’s children could only obtain relief if the court found that the trust amendment was invalid.
The court also rejected son’s children’s other argument that their action was not an “action to contest the trust” under Section 16061.8, because it did not qualify as a “direct contest” under Probate Code Section 21310. The court ruled that Section 21310, which addresses enforcement of no contest clauses, was not related to whether son’s children’s action was an action to contest the trust under Section 16061.8, thus suggesting that an action to contest the trust under Section 16061.8 is broader than an action that triggers a no-contest clause.
Hamilton v. Green illustrates the importance of paying attention to a trustee notice if you are a beneficiary of the trust or an heir. If you receive a trustee notice as a beneficiary or heir, you should take the following steps. First, calendar the dates by which you must file a challenge to the trust. If the trustee notice does not include a copy of the trust, request a copy of the trust right away and before the 120 period has expired. After reviewing the trust, if everything appears to be in order (i.e., the provisions appear to be as expected), then no further action is needed. If, however, the trust document appears suspicious, you may want to consult an attorney to determine whether you want to file an action challenging the trust. Keep in mind that you need to act quickly, as the action must be filed no later than 120 days after the date of the trustee notice or 60 days after you receive a copy of the trust, whichever is later.
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