Sending out trust notices can be stressful. Here’s a guide to 16061.7 Trust Notice procedures, plus tips–and when to get a trust attorney.
When a trust becomes irrevocable, such as when a person passes away or becomes incapacitated, the acting Trustee of the trust must send a trust notice to all beneficiaries that complies with California Probate Code Section 16061.7, which states:
“(a) A trustee shall serve a notification by the trustee as described in this section in the following events:
(1) When a revocable trust or any portion thereof becomes irrevocable because of the death of one or more of the settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust…”
Section 16061.7 also identifies other situations when a notice must be sent.
To comply with the probate code, a trustee has 60 days to send notice to all beneficiaries:
(f) The notification by trustee shall be served not later than 60 days following the occurrence of the event requiring service of the notification by trustee, or 60 days after the trustee became aware of the existence of a person entitled to receive notification by trustee, if that person was not known to the trustee on the occurrence of the event requiring service of the notification. If there is a vacancy in the office of the trustee on the date of the occurrence of the event requiring service of the notification by trustee, or if that event causes a vacancy, then the 60-day period for service of the notification by trustee commences on the date the new trustee commences to serve as trustee.
The short answer is that it depends. Beneficiaries and heirs have up to 120 days from the date the notice and the applicable trust documents are served upon you to contest the trust, or, if the documents are not included with the initial notice then 60 days after the documents are received within the 120 day period, whichever is later, as per California trust code:
(h) If the notification by the trustee is served because a revocable trust or any portion of it has become irrevocable because of the death of one or more settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust, the notification by the trustee shall also include a warning, set out in a separate paragraph in not less than 10-point boldface type, or a reasonable equivalent thereof, that states as follows:
“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 delivered to you during that 120-day period, whichever is later.”
This can be very confusing. Here are some hypotheticals to help clear up any confusion.
16061.7 Notice is served on Day 1. Notice includes the trust documents. Any contest must be filed within 120 days from the service date, Day 1.
16061.7 Notice is served on Day 1. Notice does not include the trust documents. Nobody follows up to get a copy of the trust documents. Still, any contest must be filed within 120 days from the service date, Day 1, but if nobody has the trust documents, what is to be contested?
16061.7 Notice is served Day 1. Notice does not include the trust documents. Beneficiary/heir follows up and receives a copy of the trust documents on Day 110. Beneficiary/heir has 60 days from receipt of the copy of the trust documents to contest, for a total of 170 days to contest (110 + 60).
We recommend consulting with an estate planning or trust attorney throughout the process. If for whatever reason, you’ve been named as the successor Trustee, and prefer to proceed without an attorney, trust forms and templates can be found online.
Whether doing it yourself, or working with a trust attorney, the risk is simply not following proper trust notice procedures, which opens the door to litigation and claims for breach of your fiduciary duties. Working with an experienced lawyer helps reduce, if not eliminate, that risk. For higher value trusts and estates, it becomes increasingly more important to follow procedure correctly.
With most trusts, the trustee is entitled to retain counsel to assist with these administration processes and have the attorney’s fees and costs paid from the trust assets, which means there is little to no reason not to get assistance from trust counsel to help.
If a beneficiary of a trust or an heir disinherited under a trust would like to contest a trust, who is named as successor trustee, or how a trust is distributed, they can retain a trust litigation attorney to pursue informal resolution, mediation or formal court proceeding. At RMO Lawyers, we often recommend informal resolution strategies or mediation to avoid court costs, saving all beneficiaries money and time. Sometimes, however, if resolution is not available, beneficiaries or heirs should work with an experienced trust attorney or probate lawyer to pursue their claims and an equitable distribution of trust assets.
Yes, of course you may. While most states don’t enforce “no contest” clauses, sometimes called “in terrorem” clauses, California is an exception. However, even where a Trust has a “no contest” clause it won’t serve to stop a beneficiary from filing a legitimate contest as long as good cause exists to pursue the contest. The term “no contest clause” simply acts to put beneficiaries on notice that if they have no good cause to contest that they may be disinherited if they pursue a contest.
In addition to the explanation above, if you’ve already been disinherited under a Trust and entitled to take nothing from it, then you have nothing to lose by contesting a trust that has a “no contest” clause because you’ve already been disinherited. Too many “no contest” clauses fail to properly disincentivize beneficiaries from contesting by failing to give them anything to lose.
We recommend finding an experienced trust attorney familiar with the county probate court in the county where the trust is located. For example, if the beneficiary lives in San Diego, yet the trust is in Los Angeles, we recommend working with a trust lawyer in Los Angeles. A Los Angeles trust lawyer will generally be more familiar with the Los Angeles Superior Court Probate Division, versus an out of state attorney.
RMO LLP serves clients in Los Angeles, Santa Monica, Orange County, San Diego, Kansas City, Miami, and communities throughout California, Florida, Missouri and Kansas. Our founder, Scott E. Rahn has been named “Top 100 – Trust and Estate Litigation” by SuperLawyers, Trusts and Estates Litigator of the Year, and Best Lawyers in America for Litigation – Trusts and Estates. For a free consultation, call (424) 320-9444 or visit: https://rmolawyers.com