From the desk of Jennifer N. Sawday, Esq:
What is California Probate Code Section 16061.7 and why does it pack a big punch? This is a California code provision for the administration of revocable trusts when such trust becomes irrevocable. This provision requires that whenever a revocable trust becomes irrevocable or there is a change of trustees of such an irrevocable trust that a notification be sent to those entitled to notice.
To reiterate, the actual code section is titled: “Duty to Provide Notification of Events” and refers to events such as when a trust becomes irrevocable or a change of trustees to an already irrevocable trust for example.
As you read this article, please understand that this is not legal advice to your situation and this particular provision is being narrowly parsed in this article.
So if you have a revocable living trust and the persons who have created the trust have passed away, this provision requires that the then acting successor trustee send out a trust notification with certain required text in certain sized font to those entitled to notice.
The notice has many purposes:
When I see a potential client about concerns about trust administration, my first question is have you received the 16061.7 notice and can I review it? And then I compute the statute of limitations and whether the true and correct terms of the trust was also included. This notice will tell me whether the potential client can litigate the terms of the trust or if the potential client does not need to litigate the terms of the trust, but instead has a strong case governing a breach of fiduciary or other duties by the successor trustees to the trust beneficiaries. Arguing about how a trust is being administered is not always a trust contest.
When I see a potential client who is named as a successor trustee about hiring our firm for trust administration following the death of the settlor(s), I explain the importance of preparing and serving the 16061.7 notice and, yes, this is the first thing I prepare and send out with the client’s signature as the successor trustee if we get retained to assist with trust administration.
When I prepare and serve the 16061.7 notice, I always follow the code, include the true and correct terms of the trust with the notice and draft a proof of service that includes exactly what was served and have it served by a staff member in my office. We also carefully decide with the client what is the principal place of trust administration where different counties could be chosen. Then once served by mail, as allowed, we calendar the 120 day contest period and advise the client of this important deadline. We often tell the client (successor trustee) not to distribute any trust funds to any trust beneficiaries until after this period has passed. Of course there are exceptions and legal advice is tailored specifically to each trust administration based on our collective years of experience at TLD Law and the exact facts of that trust administration.
Lastly, notice must be given to every single name, charity or other organization named in the true and correct terms of the trust. Notice must also be given to all heirs of the deceased settlor.
In terms of trust administration when a revocable trust becomes irrevocable, this code section is very valuable. Appropriate legal advice by a qualified attorney will help you understand the importance of the notice, prepare and serve this notice for you as your attorney of record on behalf of you as the successor trustee for the trust.
Jennifer Sawday is a partner at TLD Law, LLP. She serves a wide range of clients in all matters related to probate, trusts, estate planning, conservatorships, guardianships—and related litigation. She also handles pre- and post-death administration for clients who serve as personal representatives, executors, and trustees for trusts and estates. If you would like more information or to set up an appointment, please call TLD Law at (562) 923-0971 or email email@example.com.