Tips of the Trade: Don't Put Off to Tomorrow What You Can Do Today - Avoiding Post-death Contests Through Inter Vivos Petitions
| Publication year | 2022 |
| Author | Written by Andrew R. Verriere, Esq.* |
Written by Andrew R. Verriere, Esq.*
"Death does not concern us, because as long as we exist, death is not here. And when it does come, we no longer exist." Epicurus's musings on consciousness relate more to trust litigation over two thousand years later than he ever could have imagined. Many times the writing is on the wall well before the settlors of a trust pass away. Family dynamics make clear to all but the settlors that trust litigation will follow soon after their demise. Despite this anticipation, many settlors simply hope for the best, realizing that the problem will not be theirs to handle.
Historically, settlors could address these anticipated contests through the inclusion of no contest clauses, hoping they would dissuade post-death contests. However, the revisions to Probate Code section 21311 in 2008, limit the effectiveness of no contest clauses, leaving settlors with few tools to assure protection of a trust or amendment. Family members who receive little or nothing by way of a trust have nothing to lose through a no contest clause, rendering them ineffective deterrents.
The fallout of this litigation is familiar: after the settlors build an estate to pass along to their beneficiaries, huge portions are lost in litigation fighting over the validity of the trust, family divisions grow wider, and the memory of the settlor is often dragged through the mud with arguments over incapacity, undue influence, and elder abuse.
Help is on the way, however. A little noticed or used avenue within the Probate Code exists to leverage res judicata and collateral estoppel to preclude post-death contests. Probate Code section 17200(a) permits inter vivos petitions to confirm the validity of a trust. If the settlors are willing to submit their trust or amendment to court for approval, they can stave off post-death contests. By enduring the unpleasant ordeal of publicly presenting a trust to the court during the settlors' lifetime, and the potential concomitant objection by a disgruntled family member or other potential beneficiary, the settlors can secure an order affirming the validity of the trust prior to their passing, affording them the knowledge that their trust or amendment is no longer subject to attack post-death.
Probate Code section 17200 provides for a myriad of relief and is one of the most frequently used tools in the trust litigator's toolbox. The section permits a trustee or beneficiary to file a petition "to determine the existence of the trust."1 They may also file a petition to determine "the existence or nonexistence of any immunity, power, privilege, duty, or right," "the validity of a trust provision," and to "ascertain[] beneficiaries and determin[e] to whom property shall pass . . . upon final or partial termination of the trust."2
When the settlors name themselves as the trustees and/or lifetime beneficiaries, of their own revocable trust, they may file a petition seeking a determination regarding the existence of the trust or confirming its validity under Probate Code section 17200.3 Even when the settlors are not the trustees or beneficiaries, if they hold the power
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to revoke the trust, they still possess standing to file such petition.4 In order to make an order on such a petition binding on the anticipated contestant, the settlors must not only serve notice on the trustees and beneficiaries, but also on the anticipated contestant.5
Inter vivos petitions are uncommon in California, but case...
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