The following discussion is about the requirements of California Probate Code §§16060.5, 16061.7 and 16061.8, and what documents must be provided by the trustee if the trustee voluntarily provides copies of documents, such as with the section 16061.7/16071.8 notice, or if a beneficiary or heir requests copies of documents. Upon request, or voluntarily if the trustee so elects, the trustee is required to provide copies of the terms of the trust. Below I have copied and pasted parts of a legal discussion on this topic, without the specific facts of the situation – so the below discussion is rather dry, but you can envision that documents and what they say can and will vary from case to case. Immediately below is an overall summary based on reading the statutes, case law, and legislative committee history. Further below I have summarized the statutes, a few cases on legislative intent, and some of the legislative committee comments. You can ignore the underline and bold in the below materials – those were added in the original materials, but they are not necessarily relevant for this discussion. Fun reading. This is or should be an important topic of discussion for trustees, beneficiaries, estate planning attorneys, estate/trust administration attorneys, and Judges. David Tate, Royse Law Firm, Menlo Park Office but with offices in northern and southern California.
California Probate Code §§16060.5, 16061.7 and 16061.8 provide that a trustee shall provide beneficiaries and heirs with a notice, and with the “terms of the trust” either voluntarily or upon request, and that if the trustee timely and completely does so, beneficiaries and heirs are then required to make a decision whether to contest the trust within the allowable time period. The provisions and requirements of §§16060.5, 16061.7 and 16061.8 are important, and any waiver of the notice and information providing requirement is against public policy, particularly in light of the 120-day limitation deadline for filing a contest action. As no two trusts and trust situations are identical, the application of §§16060.5, 16061.7 and 16061.8, including whether the trustee has satisfied those requirements must be a factual determination that must be made on a case-by-case basis, based on the facts of the case and the requirements of Probate Code §§16060.5, 16061.7 and 16061.8 as provided therein and the legislative intent.
In relevant part, California Probate Code §16061.7 requires that:
(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.
(2) Whenever there is a change of trustee of an irrevocable trust.
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(b) The notification by the trustee required by subdivision (a) shall be served on each of the following:
(1) Each beneficiary of the irrevocable trust or irrevocable portion of the trust, subject to the limitations of Section 15804.
(2) Each heir of the deceased settlor, if the event that requires notification is the death of a settlor or irrevocability within one year of the death of the settlor of the trust by the express terms of the trust because of a contingency related to the death of a settlor.
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(e) The notification by trustee shall be served by mail to the last known address, pursuant to Section 1215, or by personal delivery.
(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.
(g) The notification by trustee shall contain the following information:
(1) The identity of the settlor or settlors of the trust and the date of execution of the trust instrument.
(2) The name, mailing address and telephone number of each trustee of the trust.
(3) The address of the physical location where the principal place of administration of the trust is located, pursuant to Section 17002.
(4) Any additional information that may be expressly required by the terms of the trust instrument.
(5) A notification that the recipient is entitled, upon reasonable request to the trustee, to receive from the trustee a true and complete copy of the terms of the trust.
(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 mailed or personally delivered to you during that 120-day period, whichever is later.”
(i) Any waiver by a settlor of the requirement of serving the notification by trustee required by this section is against public policy and shall be void. (Underline and bold added)
California Probate Code §16061.8 provides that:
“No person upon whom the notification by the trustee is served pursuant to this chapter, whether the notice is served on him or her within or after the time period set forth in subdivision (f) of Section 16061.7, may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him or her, or 60 days from the day on which a copy of the terms of the trust is mailed or personally delivered to him or her during that 120-day period, whichever is later.” (Underline and bold added)
As used in §§16061.7 and 16061.8, and throughout Article 3 which includes Probate Code §§16060 through 16069, pursuant to Probate Code §16060.5 the term “terms of the trust” means:
“ . . . the written trust instrument of an irrevocable trust or those provisions of a written trust instrument in effect at the settlor’s death that describe or affect that portion of a trust that has become irrevocable at the death of the settlor. In addition, “terms of the trust” includes, but is not limited to, signatures, amendments, disclaimers, and any directions or instructions to the trustee that affect the disposition of the trust. “Terms of the trust” does not include documents which were intended to affect disposition only while the trust was revocable. If a trust has been completely restated, “terms of the trust” does not include trust instruments or amendments which are superseded by the last restatement before the settlor’s death, but it does include amendments executed after the restatement. “Terms of the trust” also includes any document irrevocably exercising a power of appointment over the trust or over any portion of the trust which has become irrevocable.” (Underline and bold added)
It is well-known that some trustees and trust administration attorneys play games with the statutory notice requirement – some trustees intentionally or by ignorance fail to provide required disclosure or they try to keep the true terms of the trust secret from the recipient beneficiaries and heirs, whereas other trustees and their administration attorneys endeavor to provide full notice and disclosure. One might ask, why would a trustee not provide full disclosure? The answers are simple, for example, the trustee has an ulterior primary motive, or the trustee favors certain beneficiaries or heirs over other beneficiaries or heirs, or the trustee believes that the beneficiary or heir will be less likely to contest the trust if he or she does not have full information, or the trustee is simply mistaken.
Statutes are to be interpreted in accord with the intent of the Legislature. The fundamental task of statutory construction is to determine and follow the legislative intent so as to effectuate the purpose of the law, including both the policy expressed in its terms and the object implicit in its history should be recognized. Cal. Code Civ. Proc. §1859; People v. Cruz (1996) 13 Cal. 4th 764, 774-775; Walnut Creek Manor v. Fair Employment & Housing Commission (1991) 54 Cal. 3d 245, 268; In re Schaefer (1981) 116 Cal. App. 3d 588, 597. Determining legislative intent is to be the fundamental, cardinal rule of statutory construction. Tyrone v. Kelley (1973) 9 Cal. 3d 1, 10-11.The object that a statute seeks to achieve and the evil that it seeks to prevent are of prime consideration in its interpretation. Sierra Club v. City of Hayward (1981) 28 Cal. 3d 840, 860-861; Dubins v. Regents of University of California (1994) 25 Cal. App. 4th 77, 83. When the Legislature enacts a remedial statute, courts must construe it liberally to promote its purposes, to protect the persons within its purview, and to suppress the mischief within its spirit and policy. Tetra Pak, Inc. v. State Board of Equalization (1991) 234 Cal. App. 3d 1751, 1756. Courts consider legislative history as an extrinsic aid to help elucidate legislative intent. City of San Jose v. Superior Court (1993) 5 Cal. 4th 47, 54; Jevne v. Superior Court (2005) 35 Cal. 4th 935, 948; District of Columbia v. Heller (2008) 554 U.S. 570, 605. Courts also look to legislative history to confirm the Court’s reading of the statute- common sense suggests that inquiry into statutory construction benefits from reviewing additional information rather than ignoring it. Samantar v. Yousuf (2010) 560 U.S. 305, 315-323; Wisconsin Pub. Intervenor v. Mortier (1991) 501 U.S. 597, 611-612 n.4.
In this case a Senate Judiciary Committee Report with the date September 5, 1997, states (and other Committee Reports similarly state), for example:
“SECTION 23 — Trustee Notification — Probate Code Sections 16061.5 and 16061.7
Existing law requires a trustee, upon reasonable request by a beneficiary, to provide the beneficiary with certain information about the trust and its administration relevant to the beneficiary’s interest in the trust.
This bill would require trustees to notify beneficiaries of a trust by mail or personal delivery when there is a change of trustees and notify beneficiaries and heirs of whom they have actual knowledge when a revocable trust become irrevocable.
The sponsor asserts that the experience of practitioners is that failure to notify beneficiaries of the existence or terms of trusts frequently leads to or exacerbates conflict between trustees and beneficiaries. It is also increasingly common for persons to use revocable as will substitutes. In these cases, the sponsor believes that prompt notification of the heirs of a deceased settlor will reduce the incidence of trustees concealing trust assets and even the existence of trusts.”
And further, an apparently early in the legislative process or initial Assembly Committee on Judiciary Report also states, for example:
“SEC. 32 & 33 – – Trustee Notification – – Probate Code §§16061.5 and 16061.7
Existing law requires a trustee, upon reasonable request by a beneficiary, to provide the beneficiary with certain information about the trust and its administration relevant to the beneficiary’s interest in the trust. In spite of this requirement, the experience of practitioners is that failure to notify beneficiaries of the existence or terms of trusts frequently leads to or exacerbates conflict between trustees and beneficiaries.
This bill would clarify the statutory mandate on trustees by requiring them to notify beneficiaries of a trust when there is a change of trustees and notify beneficiaries and heirs when a revocable trust becomes irrevocable.”
The Cal. Probate Code §82 definition of the term “trust” includes “additions thereto”:
California Probate Code §82 states as follows:
(a) “Trust” includes the following:
(1) An express trust, private or charitable, with additions thereto, wherever and however created.
See also Townsend v. Townsend (2009) 171 Cal. App. 4th 389, 405, in which the court held that the Probate Code §82 definition of the term “additions” includes “additions of property to the Trust.”
Further, an “instrument” means a will, trust, deed, or other writing that designates a beneficiary or makes a donative transfer. California Probate Code §45.
Probate Code provisions pertaining to powers of appointment can be found at Probate Code §§600-695, in particular §640 (manifestation of intent), §650 (general power of appointment) and §651 (special power of appointment).
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