Buffington Law Firm’s Trust Litigation attorneys frequently deal with situations involving a secretive successor-trustee. The usual scenario is that once the second Trustor (trustmaker) of a Trust passes, someone else become successor-trustee of the Trust. Often this involves mom and dad passing away, and then perhaps one of several children is named in the Trust as being next in line to become Trustee following the passing of the second to die parent. This is how many Trusts are supposed to work.
Unfortunately, it is all too common that the new Successor-Trustee becomes uncommunicative and does not appear to be doing his or her job, which is usually to wind up the Trust’s affairs and distribute the assets. Usually the Successor Trustee’s first duty is to send a Notice to Beneficiaries and Interested Persons letter pursuant to Probate Code Section 16061.7. (See our article about this: Trust Disputes: When You Receive a “120 Day Letter” From a Trustee.) After that, pursuant to California Probate Code Section 16060, the Successor-Trustee has a general duty to keep the beneficiaries of the Trust reasonably informed of the Trust and its activities, and its administration. This can and should involve keeping beneficiaries informed of such things as selling or renting real property, sales of other Trust property, and the like. Usually Successor-Trustees do this. Unfortunately, some do not. That is a problem.
There are many “red flag” indicators that can alert beneficiaries that a Successor-Trustee is misbehaving or not doing his or her job. By far the most straightforward warning indicator is a Successor-Trustee who flat-out refuses to communicate. Again, reasonable communication with beneficiaries by a Successor-Trustee is required under California Probate Code Section 16060. If a Successor-Trustee (or Co-Trustees) fail and refuse to do this (after gentle but firm prodding) it may be time to take a firmer step.
Our Firm recommends that when you are confronted with a secretive Successor-Trustee and you are a Trust beneficiary, that you send him or her a written demand for a “Probate Code conformant trust accounting within 60 days.” If the Successor-Trustee fails to do this, we recommend that you seek legal counsel. (Some clients like to retain legal counsel at once; then we can send the written demand for an accounting.) The next step, following the statutory 60 day waiting period, is to file a Petition for Trust Accounting pursuant to Probate Code Section 17200(b)(7)(C). This will initiate a process whereby the Probate Court will order the Successor-Trustee to produce the needed Trust Accounting.
Typically a Probate Code conformant Trust Accounting will lay bare what the Successor-Trustee is doing — or not doing. The Petition gives the petitioning beneficiary the ability to object to the Court to actions or inactions of the Successor-Trustee and have the Court set a hearing on the disputed matter or matters and issue a ruling. Not infrequently the threat of this “brings the trustee to the table” and results in a negotiated compromise and agreement by the Successor-Trustee to correct his or her misbehavior.
If you are confronted by a secretive or outright misbehaving Trustee, Buffington Law Firm’s trust litigation attorneys invite you to give us a call for a Free Legal Consultation. All consultations will be with an experienced California Living Trust attorney, and all consultations are protected by attorney-client privilege. Call us today!