I hope this email finds you well. I want to put you all on notice of a new CA Probate Code Rule that recently came to my attention. CA Probate Code Section 15800 really tightens up the rule for Trustees acting during an incapacitated Surviving Settlor's lifetime.
For instance, if Husband and Wife have a Trust and Husband dies, normally a Wife is named to continue serving as Trustee. However, if at the time of Husband's death the Wife is incapacitated, then a Successor Trustee would have to serve as Trustee. This situation triggers similar requirements as those required of the Trustee when both Settlors (ie: Husband and Wife) are deceased. Namely, following proof of incapacity of the Wife, the Trustee must mail out a copy of the Trust and Amendments to the Trust beneficiaries and account to those beneficiaries at least annually. Here's a bit of the text of the language in the CA Probate Code: (b) Except to the extent that the trust instrument otherwise provides or where the joint action of the settlor and all beneficiaries is required, if, during the time that a trust is revocable, no person holding the power to revoke the trust, in whole or in part, is competent, the following shall apply: (1) Within 60 days of the obtaining of information establishing the incompetency of the last person holding the power to revoke the trust, the trustee shall provide notice of the application of this subdivision and a true and complete copy of the trust instrument and any amendments to each beneficiary to whom the trustee would be required or authorized to distribute income or principal if the settlor had died as of the date of receipt of the information. If the trust has been completely restated, the trustee need not include the trust instrument or amendments superseded by the last restatement. (2) The duties of the trustee to account at least annually or provide information requested under Section 16061 shall be owed to each beneficiary to whom the trustee would be required or authorized to distribute income or principal if the settlor had died during the account period or the period relating to the administration of the trust relevant to the report, as applicable. In the past, Successor Trustees assisting an incapaciated Surviving Spouse were told to follow basic fiduciary responsibilities, but not usually required to send the Trust and accountings to beneficiaries. This new rule requires far more of Trustees in this situation. As always, if you have any questions or concerns about this new rule or any other issues relating to your estate planning, you shouldn't hesitate to touch base. Take care, Jason Ebert