Sacramento Trust Litigation Attorney — When a Trust or Estate Is in Dispute

Trust litigation in Sacramento is a contested case over a California trust or estate: whether a trust or amendment is valid, whether a trustee or executor has breached a duty, and what the court should order. These cases are heard by the Superior Court of California, County of Sacramento, under the Probate Code.

Most people facing a trust dispute in Sacramento did not go looking for one. A parent died, and a trustee's notice arrived in the mail with a deadline in it. Or a brother or sister took over the house and the accounts and has gone quiet. Or an amendment signed in the last months of a parent's life cut out people who had always been named. Sometimes the person reading this is the trustee, and the accusation is aimed at them. In each case the questions are the same: what the documents actually say, what the law requires of the person in charge, and what a Sacramento County court can do about it.

This page walks through those questions in order: trust contests and their deadline, undue influence, trustee duties and remedies, accountings, no-contest clauses, and recovery of property taken from a trust or estate.

What Trust Litigation in Sacramento Actually Involves

Trust litigation means contested court proceedings over the validity, administration or enforcement of a California trust or probate estate. It is different from estate planning, which is the writing of trusts and wills, and from routine trust or estate administration, where the trustee or executor does the work and nobody objects. This site covers the disputes only: the point at which someone asks a judge to decide.

In Sacramento County, these matters are heard by the Superior Court of California, County of Sacramento. The starting point for most trust disputes is Probate Code section 17200(a): except as section 15800 provides, a trustee or beneficiary of a trust may petition the court concerning the internal affairs of the trust or to determine whether the trust exists. A beneficiary is a person entitled to receive something from the trust; a settlor is the person who created it.

Section 17200(b) lists the kinds of proceedings that count as "internal affairs," including determining questions about how the trust instrument should be read, determining the validity of a trust provision, and deciding who the beneficiaries are and to whom property passes. That list is expressly not exhaustive. The mechanics of filing are covered on this site's page about the Probate Code 17200 petition, and the broader statewide picture on the page about California trust litigation.

The disputes that reach the Sacramento court tend to fall into recognizable groups: trust contests; trustee misconduct; undue influence and fraud; no-contest clauses; accounting and information disputes; removal of a trustee or a personal representative (the executor or administrator of a probate estate); and recovery of property that was wrongfully taken.

Trust Contests: Grounds, Deadlines, and the Notification Requirement

A trust contest is a court proceeding challenging the validity of a trust instrument or an amendment to it. The timing of a contest is often controlled by a notice the trustee is required to send.

Under Probate Code section 16061.7(a), a trustee must serve a "notification by the trustee" in several events, including when a revocable trust, or part of one, becomes irrevocable because of the death of a settlor, and whenever the trustee of an irrevocable trust changes. Those are not the only triggering events the section lists.

The deadline that matters most appears in Probate Code section 16061.8. A person served with the notification under section 16061.7(a)(1) cannot bring an action to contest the trust more than 120 days from the date the notification is served, or 60 days from the date a copy of the terms of the trust is delivered to the person during that 120-day period, whichever is later. Two separate events start those clocks: service of the notification, and delivery of the trust terms within the 120 days. The period does not run from the date of death, and not every trust contest in every circumstance is governed by a 120-day window. A Sacramento beneficiary holding a notification and a request for the trust's terms is looking at exactly this rule.

The grounds for a contest usually include:

• Lack of capacity. For wills, Probate Code section 6100.5 tests capacity at the time the document was made, asking whether the person could understand the nature of the act, understand and recollect the nature and situation of their property, and remember and understand their relations to living descendants, spouse and parents and those whose interests are affected. The section also addresses a mental health disorder with delusions or hallucinations that caused a disposition the person otherwise would not have made. A diagnosis alone, such as dementia, does not make a document invalid; the question is the person's capacity when it was signed.
• Undue influence. Probate Code section 86 gives the term the meaning set in the Welfare and Institutions Code, supplementing the common law.
• Fraud, including forgery and misrepresentations that produced the document.

More on the procedure appears on this site's page about contesting a trust.

Undue Influence, Fraud, and the Presumption Under Probate Code Section 21380

Late-life gifts to the person who wrote the document, or to the person caring for the parent, raise a specific statutory rule. Under Probate Code section 21380(a), a provision of an instrument making a donative transfer (a gift) to any of the following is presumed to be the product of fraud or undue influence:

• the person who drafted the instrument;
• a person who transcribed the instrument, or caused it to be transcribed, and who was in a fiduciary relationship with the transferor at the time; and
• a care custodian of a transferor who is a dependent adult, but only if the instrument was executed while the care custodian provided services, or within 90 days before or after that period.

A presumption shifts the burden of proof. California law generally allows the beneficiary to rebut this one by clear and convincing evidence, but the presumption is conclusive for a transfer to the drafter and to certain people the statute associates with the drafter. A beneficiary who fails to rebut the presumption bears all costs of the proceeding, including reasonable attorney's fees.

The rule is narrower than people often assume. Not every gift to a caregiver, a relative or someone who helped is presumed invalid. Outside the categories above, a Sacramento family member alleging undue influence or fraud carries the burden of proving it with evidence about the circumstances of the signing.

Trustee Duties, Breach of Trust, and the Remedies California Law Provides

A trustee is a fiduciary, meaning someone legally bound to act for others. Probate Code section 16004(a) states the core duty: the trustee may not use or deal with trust property for the trustee's own profit or for any purpose unconnected with the trust, and may not take part in any transaction in which the trustee has an interest adverse to the beneficiary. Under section 16004(c), a transaction between the trustee and a beneficiary by which the trustee obtains an advantage from the beneficiary is presumed to violate the trustee's fiduciary duties; that presumption affects the burden of proof and generally does not apply to an agreement about the trustee's hiring or compensation.

The trustee also has a duty to keep the beneficiaries reasonably informed of the trust and its administration (section 16060) and, except as section 16069 provides, to report requested information relevant to a beneficiary's interest on reasonable request (section 16061). Under section 16062, the trustee generally must account at least annually, at the termination of the trust and upon a change of trustee, but that duty runs to each beneficiary to whom income or principal is required or authorized in the trustee's discretion to be currently distributed, with exceptions in that section and section 16064. Not every beneficiary is owed an annual account. And under section 16064, even where the trust instrument waives the account or a beneficiary has waived it in writing, the court may compel the trustee to account upon a showing that it is reasonably likely a material breach of the trust has occurred.

When a trustee commits or threatens to commit a breach of trust, Probate Code section 16420(a) lets a beneficiary or cotrustee bring a proceeding for remedies including: compelling the trustee to perform; enjoining a breach; compelling redress by payment of money or otherwise; appointing a receiver or temporary trustee; removing the trustee; setting aside the trustee's acts; reducing or denying compensation; imposing an equitable lien or constructive trust on trust property; and tracing and recovering property wrongfully disposed of. Several of these are subject to section 18100. These remedies do not prevent resort to any other appropriate remedy.

On money, section 16440(a) makes a trustee who commits a breach chargeable with whichever is appropriate: loss or depreciation in value resulting from the breach, with interest; any profit the trustee made through the breach, with interest; or profit that would have accrued to the trust estate. A surcharge (a money judgment against the trustee) is not automatic. Under section 16440(b), the court may excuse a trustee who acted reasonably and in good faith under the circumstances known to the trustee, in whole or in part, if that would be equitable. A trustee accused of misconduct in Sacramento often builds the defense around exactly that provision.

Removal is governed by section 15642. A trustee may be removed under the trust instrument, by the court on its own motion, or on petition of a settlor, cotrustee or beneficiary under section 17200. The grounds include breach of trust, insolvency or unfitness, hostility or lack of cooperation among cotrustees that impairs administration, failing or declining to act, and excessive compensation; the list is not complete.

Compensation disputes have their own rules. If the trust instrument is silent on pay, the trustee is entitled to reasonable compensation under the circumstances (section 15681). Under section 15686(b), a trustee may not charge an increased fee without first giving at least 60 days' written notice to the beneficiaries the section lists, including each beneficiary entitled to an account. A section 17200 petition served before that notice period runs out generally holds the increase back until the court orders otherwise or the petition is dismissed.

Compelling Accountings and Information: What Beneficiaries Can Petition For

A beneficiary who has asked and asked and received nothing has specific petitions available under section 17200. A petition to compel information under section 16061 is available if the trustee has failed to provide the requested information within 60 days after the beneficiary's reasonable written request, and the beneficiary has not received it within the six months preceding the request. A petition to compel an account is available if the trustee has failed to submit a requested account within 60 days after written request, and no account has been made within the six months preceding the request. Both turn on a written request, which is why the date and content of that request often become evidence.

Once a petition is before the Sacramento County court, Probate Code section 17206 lets the court make any orders and take any action necessary or proper to dispose of the matters presented, including appointing a temporary trustee to administer the trust in whole or in part.

Accountings also start the clock on claims. Under Probate Code section 16460(a), if a beneficiary receives an interim or final account, or other written report, that adequately discloses the existence of a claim for breach of trust, the claim is barred unless a proceeding is commenced within three years after receipt. Where no account or report adequately discloses the claim, or none is received, the three years generally run from when the beneficiary discovered, or reasonably should have discovered, the subject of the claim. An account "adequately discloses" a claim if it gives enough information that the beneficiary knows of the claim or reasonably should have inquired.

No-Contest Clauses: What They Enforce and What They Do Not

Many Sacramento beneficiaries hesitate because the trust contains a no-contest clause, a provision that penalizes a beneficiary who challenges the document. California law limits these clauses sharply. Under Probate Code section 21311(a), a no-contest clause may be enforced only against:

• a direct contest brought without probable cause;
• a pleading challenging a transfer of property on the ground that it was not the transferor's property at the time, but only if the clause expressly says so; and
• the filing of a creditor's claim or prosecution of an action based on it, but only if the clause expressly says so.

Under section 21311(b), probable cause exists if, at the time of filing, the facts known to the contestant would cause a reasonable person to believe there is a reasonable likelihood the requested relief will be granted after an opportunity for further investigation or discovery. A no-contest clause does not automatically disinherit anyone who challenges a trust or will. Whether a particular filing is a "direct contest," and whether probable cause existed, depends on the clause's wording and the facts known when the papers were filed.

Recovery of Wrongfully Taken Property and the Double-Damages Provision

Disputes over a parent's house, bank accounts or business often come down to one question: who has the property now, and how did they get it. Probate Code section 859 addresses property taken from a trust or a decedent's estate, among others. If a court finds that a person in bad faith wrongfully took, concealed or disposed of such property, or took, concealed or disposed of it by undue influence in bad faith or through elder or dependent adult financial abuse, that person is liable for twice the value of the property recovered by an action under that part of the Probate Code. The court may also, in its discretion, award reasonable attorney's fees and costs against that person, except as otherwise required by law. Neither the doubling nor the fees is automatic; each depends on the court's finding and, for fees, the court's discretion.

When the person in control is a personal representative of a probate estate rather than a trustee, Probate Code section 8502 lists the causes for removal: wasting, embezzling, mismanaging or committing a fraud on the estate, or being about to do so; being incapable of properly performing the duties or not qualified; wrongfully neglecting the estate or long neglecting to act; removal otherwise being necessary to protect the estate or interested persons; and any other cause provided by statute. These petitions are heard by the same Sacramento County court.

What This Site Covers

This site does not cover estate planning, drafting or amending a trust or will, or routine administration where nobody disputes anything. It does not address disputes outside California, or trusts and inheritances being divided in a divorce. And not every disagreement with a trustee is a breach of trust; a trustee may have discretion the beneficiary did not expect. Where a deadline such as the 120-day or 60-day period under section 16061.8 may apply, the date the notification was served and the date the trust terms were delivered are the facts that set it.

Discussing a Sacramento Trust or Inheritance Dispute

A Sacramento trust dispute usually turns on a short list of documents and dates: the trust and every amendment, the trustee's notification and when it was served, when the trust terms arrived, any written requests for information or an account, and the bank, title and transfer records showing where property went. A consultation with an attorney typically looks at those papers and at the conduct of the person in control. For a reader still deciding whether the situation is a dispute at all, rather than a slow but ordinary administration, the documents themselves are the place that question gets answered.

To talk through a dispute like this with an attorney, you can request a consultation about your dispute through California Trust Litigation Lawyers.