Administrative Procedures 2

Question 1

Heggstad

Answer 1

In the Estate of Heggstad held that it is not necessary for an owner of property to execute a separate deed transferring property to his or her trust. The court held that, provided that the settlor is the owner of the property, and he or she makes a declaration that he or she holds a specific piece of property in trust, a trust has been created in that specific property and the settlor is also the trustee. PC 15200(a)
If real property is involved, the declaration of trust must be in writing to satisfy the SOF (PC 15602)

Question 2

PC 850(3)(B)

Answer 2

Codified the Heggstad case.

Question 3

Ukkestad v. RBS Asset Finance

Answer 3

It is not necessary for the real property to be specifically identified on Schedule A. Extrinsic evidence could be used to prove that the settlor intended to transfer all real property and other assets.

Question 4

Carne v. Worthington

Answer 4

Settlor created a revocable trust and transferred his residence by way a deed. Years later, he created a second irrevocable trust and he never transferred his residence to the subsequent trust. The court found that the property was owned by the second trust. It was enough that the settlor executed the second trust and there was a schedule A.

Question 5

How is Worthington is different from Heggstad?

Answer 5

Heggstad - looked at the intent and the declaration
Worthington - looked at the conveyance of the property 
PC 15200(b) - A transfer of property by the owner during the owner's lifetime to another person as trustee

Question 6

Carmack v. Reynolds

Answer 6

PC 15301(b) - once trust assets become due and payable, a judgment creditor of a beneficiary can reach those trust assets are due and payable nothwithstanding that the trust assets have not been distributed to the beneficiary.

Question 7

PC 15306.5

Answer 7

A Judgment Credit can reach up to 25% of all anticipated payments from the trust to satisfy a judgment against beneficiary.

Question 8

Dobler v. Arluk Medical Center

Answer 8

The trustee of a trust has no duty to pay a potential creditor.

Question 9

PC 19001(a)

Answer 9

If you are a creditor and the decedent owed a debt - you have to open up a probate, file the creditor’s claim, it would be rejected, file a lawsuit and get a judgment. If there are no assets in the estate, file a petition to reach the assets of the trust.

Question 10

PC 19400

Answer 10

Beneficiaries are personally liable under distributee liability. The creditor can get a judgment against the beneficiaries.

Question 11

PC 15403

Answer 11

Allows for the modification of the irrevocable trust if all of the beneficiaries consent to the modification. A Petition would have to be filed.
*Cannot terminate, if there is a Spendthrift provision.

Question 12

PC 15403(b)

Answer 12

If the modification is necessary to carry out a material purpose of the trust the court cannot modify the trust unless the reason for doing so under the circumstances outweighs the interest in accomplishing a material purpose of the trust.

Question 13

PC 15404

Answer 13

Modification or termination can occur by the written consent of the settlor and all beneficiaries without curt approval of the modification or termination.
If a beneficiary does not consent, the court can modify or partially terminate the trust if the beneficiaries who do not consent are not substantially impaired.

Question 14

PC 15408

Answer 14

It allows a court to modify a trust if the trust contains uneconomically low principal. For example, if the fair market value of the trust has become so low in relation to the cost of administration of the trust that the continuation of the trust under its existing terms will defeat or substantially impair the accomplishment of its intended purpose.

Question 15

PC 15409

Answer 15

Allows modification if something has occurred that the settlor was unaware of and (1) did not anticipate the changed circumstance; and (2) failure to modify the trust based on changed circumstance would defeat a material purpose of why the trust was originally created.
*Can terminate even if there is a Spendthrift provision.

Question 16

PC 10950(a)

Answer 16

The court on its own motion may order an accounting.

Question 17

PC 10950(b)

Answer 17

The court may order an account on petition of an interested person made more than one year after the last account was filed or if no accounting has been completed or if it has been one year since the appointment of the PR.

Question 18

PC 10952

Answer 18

If a PR resigns, is removed or their authority terminated, then they must file an accounting within 60 days, unless extended by the court.

Question 19

PC 10953(b)

Answer 19

If a PR dies or becomes incapacitated and a new PR is appointed, an accounting must be filed no later than 60 days after the appointment.

Question 20

PC 10953(c)

Answer 20

If the PR dies or absconds and no PR is appointed, the court may compel the attorney of record in the estate proceeding to file an accounting.

Question 21

PC 10954

Answer 21

An accounting is not required, if there is a written waiver of accounting or their interest has been satisfied and an accounting is not necessary.

Question 22

PC 11001

Answer 22

An interested party may contest an accounting.

Question 23

PC 11003(a)

Answer 23

If the contest to the accounting was without reasonable cause and in bad faith, the court may award attorney’s fees to defend the accounting.

Question 24

PC 11003(b)

Answer 24

If the opposition to the contest was without reasonable cause and in bad faith, the court may award attorney’s fees.

Question 25

PC 11050

Answer 25

The court can compel the filing of the accounting.

Question 26

PC 11052

Answer 26

If the PR does not file a required accounting, they can be removed or held in contempt of court.

Question 27

PC 2620(a)

Answer 27

The conservator or guardian must file an account one year from the date the letters are issued and every other year thereafter.

Question 28

PC 2620(b)

Answer 28

If the conservatee or ward dies, a final accounting must be filed

Question 29

PC 2620.2(a)

Answer 29

If an accounting has not been filed, the court shall send written notice of the deficiency.

Question 30

PC 2622

Answer 30

Any interested person can file objections to an accounting.

Question 31

PC 2632(b)

Answer 31

If the guardian or conservator dies or becomes incapacitated, an accounting shall be filed within 60 days.

Question 32

PC 16062

Answer 32

The trustee shall account at least annually, at the termination of the trust, and upon a change of trustee.

Question 33

PC 16062(e)

Answer 33

Waiver of the obligation of a trustee to account in a trust is against public policy shall be void

Question 34

PC 16063

Answer 34

The format and content of the trust accounting.

Question 35

PC 15800(a)(b)

Answer 35

The trustee only owes a duty to the person holding the power of revocation, so long as the person holding the power of revocation is competent.

Question 36

Estate of Giraldin

Answer 36

Beneficiaries of a trust have standing to sue for breach of a fiduciary duty against the settlor of a trust while the trust was competent and the trust was revocable provided that the beneficiaries can show they were harmed by the breach.
The rights of the contingent beneficiaries are merely postponed.

Question 37

Evangelho v. Presoto

Answer 37

This held that beneficiaries of a trust have standing and a right of an accounting from the trustee for his or her actions while the trust was revocable. Again, in this case the court stated that the rights of the contingent beneficiaries are merely postponed.

Question 38

Johnson v. Kotyck

Answer 38

If the settlor is no longer competent, and their estate has been conserved by the conservator. The interests of the beneficiaries are contingent. No right to an account pursuant to PC 15800

Question 39

PC 16062

Answer 39

The trustee only has an affirmative fiduciary duty to account to those beneficiaries who are currently entitled to income or principal. Remainder beneficiaries are not entitled to receive income or principal; and thus, are not entitled to an accounting.

Question 40

Esslinger v. Cummins

Answer 40

A remainder beneficiary can compel the trustee to account if an accounting has not been provided in the last 6 months and 60 days has elapsed since a written request has been made of the trustee. They have standing to compel an accounting, even if they are remainder beneficiaries.

Question 41

PC 19502 - 19530

Answer 41

Uniform Trust Decanting Act (effective 1/1/2019)
You have an irrevocable trust and allows you to modify it if certain rules are followed. There needs to be notice to the beneficiaries. There is no court appearance required.

Question 42

Drake v. Penkam 217 Cal App 4th 400

Answer 42

Allegations made that their Mother lacked the capacity to act as trustee and was susceptible to undue influence. Mom filed an opposition. The parties settled.
When Mom dies, the one sister finds out she was disinherited. The disinherited sister filed a trust contest. The court stated that she was barred by laches because you made allegations while she was alive.

Question 43

Barefoot v. Jennings 27 Cal App 5th 1

Answer 43

A former beneficiary of a trust does not have standing to file a trust contest under PC 17200. If you are not listed as a beneficiary, you do not have standing under PC 17200. The appellate court stated that your remedy is a civil case.