Someone else claims to be the trustee, should I take her word for it?

Julie’s sister and only sibling, Nancy, recently passed away. Nancy didn’t have any children and she and her ex-husband divorced some time ago. Julie hasn’t had close contact with Nancy in a while, but they certainly weren’t estranged from each other. Nancy’s ex-husband’s sister (Nancy’s ex-sister-in-law) lives just a few cities away from where Nancy lived. Now the ex-sister-in-law claims to be the trusteeA person who stands in a fiduciary relation to another, having been given legal title to someone else’s property for the benefit of a third party. of Nancy’s trustAn arrangement in which property interests are legally held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary). and that Nancy didn’t want Julie to have any part of the estateThe assets and liabilities left behind by a decedent.. Nancy left assets valued at approximately $5 million. Should Julie take her word for it?

With assets worth $5 million, it is certainly worth Julie’s time to know her rights.

Firstly, Julie should know that she is Nancy’s “heir at lawA person who is entitled to receive a decedent’s property under the laws of intestacy.”. An “heirA person who is entitled to receive a decedent’s property, whether under the laws of intestacy, a will, a trust, or a deed. at law” is a person who is entitled by statute to receive a portion of a decedent’s property if the decedentA person who has passed away. passed away without any valid willA legal document which expresses a person’s final wishes about what happens to their property after they pass away, often specifically identifying intended beneficiaries for specific items of property. or trust. Since Nancy didn’t have any children and wasn’t married at the time of her death (and their parent’s had long since passed away), Julie stands next in line under the statutory presumption of intestate succession. (Cal. Prob. Code §§6400-6414).

Secondly, if Nancy truly did have a trust, and the ex-sister-in-law is now the trustee, she has important fiduciary duties. Whenever a revocable trustA trust which can be modified or terminated by the settlor at any time during the settlor’s lifetime. becomes irrevocable because of the death of a settlorThe individual who creates a trust. of the trust, and whenever there is a change of trustee of an irrevocable trust, the trustee must serve a notification on each beneficiaryA person for whom property is held, e.g., in a trust, or who is to receive something as a result of a legal instrument, e.g., a will or insurance policy. of the irrevocable trust and on each heir of a deceased settlor. (Cal. Prob. Code §16061.7). This notification must be served within sixty (60) days and must contain certain statutorily prescribed information. (Cal. Prob. Code §16061.7). If the ex-sister-in-law is in fact the new trustee of Nancy’s trust, then she needs to serve this notice on Julie or risk being responsible to Julie for damages, attorney’s fees, and costs caused by failing to do so. (Cal. Prob. Code §16061.9). Julie does not have to take the ex-sister-in-law’s word for it.

Additionally, whenever a revocable trust becomes irrevocable because of the death of a settler of the trust, and whenever there is a change of trustee of an irrevocable trust, the trustee must provide a copy of the terms of the trust to each beneficiary of the trust and to each heir of a deceased settlor. (Cal. Prob. Code §16061.5). If the ex-sister-in-law refuses to provide a copy of the trust documents to Julie, then the ex-sister-in-law again risks being held liable to Julie. Again, Julie does not have to take the ex-sister-in-law’s word for it.

With $5 million worth of assets at stake, it would certainly be worth the comparatively small hassle to Julie to demand that the ex-sister-in-law comply with her duties as a trustee. If she refuses to comply, Julie can bring legal action against her to compel her to comply. In addition, Julie should be aware that the ex-sister-in-law’s refusal would be highly suspicious, in addition to her claim that Nancy wrote her only living relative (Julie) out of the trust. There is potential for serious financial damages in Julie’s favor if it turns out that the ex-sister-in-law was trying to take advantage of the situation.

David J. Hallstrom, Esq. and his trust and probate litigation team are here to help with any of your trust or probate concerns. We bring a broad base of experience and a global perspective to help you achieve effective, practical, and timely results.

Call David J. Hallstrom at (888) 308-1261 to schedule your consultation.