By Roger J. Buffington, Esq.
One of the problems that beneficiaries of California Living Trusts sometimes face is a scenario in which the trustmaker (“Trustor”) is still alive but is known to be very weak of mind, possibly incompetent. The fear is often that someone such as a family member will cause the Trustor to execute an amendment to the still-revocable trust. There may be a concern that such wrongful amendments will not come to light until the Trustor’s death, which may be a long time in the future. Not infrequently there may be a strong suspicion that one or the other family members or other interested persons may have obtained an improper trust amendment from the ailing Trustor, when such Trustor did not really know what he or she was doing due to mental disability. Generally, attorneys often assume that if the Trustor is still living that the Trust is revocable and accordingly a beneficiary lacks standing to bring a trust action such as a Petition to determine whether an untoward amendment is claimed to exist, or to invalidate such amendment if it is known or believed to exist.
In recent years, case law has determined that if a petitioner alleges in a verified petition that the Trustor of an otherwise revocable petition lacks testamentary capacity, so long as the petitioner is interested person (usually either a beneficiary or an heir-at-law) then the petitioner has standing to bring a Trust petition. This is based upon the legal presumption at the pleading stage that the subject trust has become irrevocable due to the incapacity of the Trustor. For example, in Starr v. Ashbrook [(2023) 87 Cal. App. 5th 999] a Court found that a revocable trust becomes irrevocable if all persons holding the power to revoke the trust have become mentally incompetent. This gave beneficiaries standing to petition the Court concerning the administration of the trust and other matters. In Rands v. Rands [(2009) 178 Cal. App. 4th 907] the court upheld the determination of incapacity based on certifications by physicians, which rendered the trust irrevocable under its terms.
Under other case precedent, it appears that even if the trust contains no explicit provision that it becomes irrevocable upon the incompetency of the Trustor, the Trust becomes irrevocable, and thus subject to a probate petition, by pure operation of law. In Drake v. Pinkham [(2013) 217 Cal. App. 4th 400, 408-409] the Court of Appeal found that a trust had become irrevocable by operation of law because the Trustor, the only person with the power to revoke it, had become mentally disabled. The Court of Appeal explained that once the only person with the power to revoke the trust became incompetent, the trust was effectively irrevocable and interested persons had standing to petition the probate court concerning the usual matters within the scope of Probate Code Section 17200. [Id. at 409]. Of course, since the trustor is still living in these scenarios, the court will eventually require proof of the incapacity and the petitioner will have the burden of proof to establish this as in Rands v. Rands, supra.
This principle, that the trust becomes irrevocable upon the known mental incompetence of the person or persons holding the power to revoke, is crucial. It means that an interested person need not wait for the trustor to pass before bringing an appropriate trust petition, such as, for example, a petition to invalidate an amendment or appoint or replace a trustee. Another example might be a petition to obtain an accounting of the trust, to safeguard against financial malfeasance. Indeed, in certain circumstances a court may find that a Statute of Limitation has begun to run upon the incapacity of the Trustor or Trustors. In Drake, supra, the Court found that the petitioner had committed laches (waiting too long to bring an equitable action) because the time to bring an action had begun to run upon the known incapacity of the trustor.
If you are confronted with a situation in which you believe that you need to bring a trust petition concerning a California living trust, we invite you to contact Buffington Law Firm for a free legal consultation. All consultations are with an experienced trust litigation attorney and are entirely confidential and protected by the attorney-client privilege. There is never any obligation on your part. Call us today!