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The Trustee of a trust has many duties during trust administration.  One very important duty of a trustee during trust administration is to keep the beneficiaries of a trust reasonably informed of the trust and its administration.  This duty is separate from the various other duties of a trustee and this notification requirement cannot be waived or avoided by the terms of the trust.  Meaning, it MUST be done under California law.

The general rule is this, California Probate Code requires a trustee to notify the beneficiaries and provide a complete copy of the terms of an irrevocable trust, or irrevocable portion of the trust to any beneficiary of the trust and to any heir of a deceased settlor who requests it when a revocable trust or any portion of it becomes irrevocable because of the death of one or more of the settlors of the trust, contingency related to the death of one or more of the settlors of the trust, or when there is a change of a trustee of an irrevocable trust, or when a power of appointment is effective or lapses on the death of a settlor with respect to an irrevocable trust other than a charitable remainder trust. 

The notification must contain the identity of the settlor or settlors of the trust and the date of the execution of the trust document.  It must contain the name, mailing address, and telephone number of each trustee of the trust.  The address of the physical location where the place of trust administration is to occur must be on the notification.  It must contain any additional information that may be expressly required by the terms of the trust document.  The notification must contain a statement that the beneficiary or heir is entitled, on reasonable request to the trustee, to receive from the trustee a true and complete copy of the terms of the trust.  Finally, unless the notification is served only because of a change of trustee, the notification must also include statutory language in not less than 10-point boldface type font.

The notification must be served, either by personal delivery or by U.S. Mail sent to the last known address of the beneficiary or heir.  The notification must be served no later than 60 days after the occurrence of the vent requiring notification or 60 days after the trustee becomes aware of the existence of a person entitled to receive notification.

So what happens if a trustee fails to serve such notification as required by the California Probate Code?  The trustee can be responsible for all damages, attorney fees, and costs caused by the failure to provide the notification unless it is established that the trustee made a reasonably diligent effort to comply with the law.  But that is not the only consequence, as if that was not bad enough.  If a trustee fails to provide such notification (or is not able to establish that the trustee made a reasonable effort to comply with the law), then a beneficiary can bring a lawsuit to challenge or contest the trust until such notification occurs.  Meaning, the statute of limitations on a beneficiary to bring a lawsuit to challenge or contest the trust starts with serving the notification, as noted above, and runs at 120 days from the date the notification is served on the beneficiary.  So failure to provide notification leaves the trustee and the trust open to challenge the trust forever until notification is given.  Because the law is so complicated in this area, any trustee who needs further information about their duties as trustee should contact the Chilina Law Firm or another California attorney who practices in the area of estate planning and trust administration for further information. 

Authored by Karen Chilina and co-authored by Gregory J. Chilina

Chilina Law Firm, a Professional Corporation, is a full-service estate planning, probate, trust administration, business law, and real property law firm that provides a wide-range of advising, transactional, and litigation services to its clients from its office located in Atascadero, California. The firm’s attorneys represent individuals and business entities in an assortment of transactional and litigation matters involving estate planning (including trusts, wills, powers of attorney, and medical directives), probate, trust administration, as well as general business law, contracts, corporate governance, land use, and real property. Chilina Law can be contacted by telephone at (805) 538-5038 or by email atinfo@chilinalaw.comor visit the Chilina Law Firm atwww.chilinalaw.com. Chilina Law Firm is based in Atascadero, California and serves North San Luis Obispo County communities, including Santa Margarita, Atascadero, Templeton, Paso Robles, and San Miguel.

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