Legal Question in Wills and Trusts in California
California - my parents are deceased (second spouse died just over two years ago) and left a Trust; I am one of two beneficiaries. The Trust states that beneficiaries will be disinherited if they:
"objects in any manner to any action taken or proposed to be taken in good faith by the Trustee under said Trust or any amendment to it, whether the Trustee is acting under court order, notice of proposed or otherwise, and said action or proposed action is later adjudicated by a court of competent jurisdiction to have been taken in good faith"
Presuming there is a three year statute of limitations to object to the Trustee's handling of the Trust (is there?? I hope so), will it cause a problem for me regarding distribution of the Trust, if I file to ask the Court in Calif to determine whether there has been a breach of fiduciary duty on the part of the Trustee regarding her handling of the Trust?
3 Answers from Attorneys
The clause you refer to is an ad terrorem clause. I would be very careful if I were you in filing something to have the court determine whether there has been a breach of fiduciary duty. You should be given accountings by the trustee, and should use those accountings to determine whether there has been a breach, prior to filing any challenge with the court.
In addition, you should be aware that trustee's are insulated, in part, by what is known as the "business judgment rule." That rule could potentially lead you to being disinherited.
With regard to your first portion, this is a no-contest provision that may or may not be enforceable depending on when the trust became irrevocable.
With respect to your second question, whether or not a Trustee has breached a fiduciary duty and whether or not it will trigger the no contest clause, filing a petition to determine whether or not a trustee did breach generally will not trigger a no-contest clause so long as you do not contest the trust directly. Therefore, you should be able to file with the court a petition regarding breach of fiduciary duty, but should probably refrain from challenging distributions or the provisions of the trust. If you have any further questions, feel free to contact my office and I would be happy to discuss it further. Good luck.
You need to consult with an attorney to determine your best course of action.
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