Trustees Have a Duty to Provide Notice to Beneficiaries and Heirs
Trustees Have a Duty to Provide Notice to
Beneficiaries and Heirs
If you have recently assumed the role of successor trustee of an individual or family trust following the death of the original trust settlors, you are probably realizing that you have taken over a very important and challenging responsibility. On the one hand, being named the successor trustee is an honor that reflects the high level of trust a decedent placed in you to fully and faithfully carry out his or her intentions in administering the decedent’s trust estate and providing a legacy for the trust beneficiaries. On the other hand, you have a lot of work to do and many legal responsibilities that come with it.
In a typical individual or family trust created under the laws of California, the trust becomes irrevocable upon the death of the original trust settlor. And, since the settlor is often the initial trustee, when he or she dies, the nominated successor trustee now assumes the role of acting trustee.
One of the first duties the newly acting trustee has following the death of the original settlor and trustee is to provide the trust beneficiaries, as well as the heirs of the decedent, a statutory “Notification By Trustee Under Probate Code Section 16061.7.” This Notification generally must be served not later than 60 days following the death of the trust settlor, and must 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, 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.
- 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. (It is often good practice to include a copy of the trust with the Notification.)
- 6. Importantly, 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.
One reason why it is so vitally important for the trustee to provide this Notification is that it serves to commence the running of the statute of limitations for would-be contestants of the trust to bring claims. No person upon whom the Notification is served 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 date on which a copy of the terms of the trust is delivered to him or her during that 120-day period, whichever is later. If the trustee does not provide the Notification, the statute of limitations does not begin to run, and in a worst-case scenario the trustee could be blindsided by (and on the hook for) a claim that may be brought even many years after the trustee distributed all trust assets to the beneficiaries and thought he or she had completed administration of the trust.
In addition, Probate Code section 16061.9 provides that a trustee who fails to serve the notification by trustee as required by Section 16061.7 on a beneficiary may be responsible for all damages, attorney’s fees, and costs caused by the failure, and a trustee who fails to serve the notification on an heir who is not a beneficiary and whose identity is known to the trustee may be responsible for all damages caused to the heir by the failure.
As a newly acting trustee, it may seem that a daunting task has been thrust upon you, and you may not know exactly what you should do. That is where Epps & Coulson, LLP can help. We are well-versed in estate planning, trust administration, and the probate process, from start to finish. If you need help navigating the ins and outs of your role and fiduciary duties as trustee, please contact Dawn (email@example.com) or Adam (firstname.lastname@example.org).
Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. It is likely considered advertising. Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.
EPPS & COULSON, LLP
Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon