The California Probate Code Section 16061.7 states that a successor trustee has a legal obligation to notify all beneficiaries and heirs in the case of the settlor's death to ensure that all parties involved are well-informed.

Let's take a closer look at potential scenarios when a trustee is required to send a notification and what information this notification should contain. A trustee may face negative financial and legal consequences if this notification doesn't meet the legal requirements. That is why a successor trustee should be perfectly aware of the content and purpose of trust beneficiary notices.

As outlined in Probate Code Section 16061.7 the beneficiary trust notice is a required document is sent by the successor trustee and serves to inform eligible beneficiaries and heirs about the ongoing process of trust administration.

While the most common scenario when this notice is sent out - is the settlor's death and there is only one settlor, there are other cases when a trustee must send it according to the California Probate Code.

The Probate Code Section 16061.7 Trust Notice must be sent when:

The Probate Code Section 16061.7 stipulates specific instances which mandate the issuance of a Trust Notice by a trustee or successor trustee:

1. Successor Trustee Assumption: If a successor trustee is appointed to manage an irrevocable or revocable trust, effectively superseding the prior trustee, it's crucial to notify all beneficiaries and heirs. This ensures all parties are informed of the administrative change and understand who now holds responsibility for trust management.
2. Death of the Settlor with Power of Appointment: If a settlor, who had the power of appointment over an inter vivos trust, passes away, a Trust Notice must be dispatched. This applies even if the trust was originally deemed irrevocable, or was intended to be so from its inception.

In essence, the Probate Code Section 16061.7 mandates a Trust Notice under these circumstances to uphold transparency, maintain accurate communication, and ensure all beneficiaries and heirs are aware of significant changes concerning the trust's administration.

Significance of the Notice

The trust notice serves 2 purposes: it protects beneficiaries and keeps them informed about the commencement of the trust administration process.

In addition, it empowers recipients by informing them of their right to challenge the trust and request further copies of trust documents. By fostering transparency and fairness, this notice plays an instrumental role in the just administration of a trust.

There are 5 key points that should a successor trustee should include in the trust notice:

1. The date of execution of the trust document and the identity of the settlor or settlers
2. The contact information of each trustee, including address, name, and phone number
3. The physical address of the principal place of administration of the trust
4. Any other information required by the terms of the trust
5. A notification informing the recipient of a right to receive a true and complete copy of the terms of the trust from the trustee.

In addition, when the notice is served in the case of the trustor's death, it should also include the following text:

According to the California Probate Code 16061.7 - The trust notice may be considered incomplete and void if any of these key points are missing.

According to California Probate Code, a successor trustee has 60 days to send the notice following the trustor's death.

More specifically, the California Probate Code states:

If a trustee fails to send out trust notices within the specified time frame, then legal and financial responsibility can be incurred, as stated by Section 16061.9.

Sample Notification Letter to Trust Beneficiaries in California

You can use the sample provided below to send out Trust Notice in California. Pay attention that this sample letter contains all the key points as required by California Probate Code 16061.7.

Notification of Trust Administration

Dear [Beneficiary Name],

As the Trustee of the Trust established by [Name of Settlor], executed on [Date of Execution], I am writing to notify you about certain aspects of this Trust as it now enters the administration phase.

The Trust administration process is now taking place due to [reason, such as the death or incapacity of the settlor]. The Trustee(s) information is as follows:

The Trust will be administered at the following principal location in accordance with Section 17002:

[Principal Place of Administration Address]

As a beneficiary, you have the right to request and receive a true and complete copy of the terms of the Trust. Please do not hesitate to contact me if you wish to exercise this right.

[If applicable: The terms of the Trust instrument also require the following information to be provided: [insert additional information here]].

IMPORTANT NOTICE:

You may not bring an action to contest the Trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the Trust is delivered to you during that 120-day period, whichever is later.

If you have any questions or need further clarification, please feel free to contact me at the above number. I appreciate your patience and cooperation during this time.

Sincerely,

[Your Name] [Your Title (if applicable)]

NOTE: This is a general sample of a notification letter to Trust beneficiaries in California. Please consult an estate professional to guide you through the requirements and tailor the letter to your specific situation.

The anti-lapse law applies in case of a trust beneficiary's death before the estate is settled in California. The anti-lapse rules are stated in California Probate Code Section 21110, which is usually referred to as the "anti-lapse statute."

Let's imagine that Jack is a trust beneficiary and has recently received a trust administration notice from the successor trustee. Jack passes away unexpectedly during the trust administration process before the distribution phase. So what will happen to his share of the trust assets?

According to the anti-lapse law, Jack's share of trust assets will become part of his estate, even if they were not distributed. Jack's children will get his share of the trust assets, and they will split it equally among themselves, according to California Probate Code Section 240.

In some cases, the terms of the trust may have a provision stating how assets should be distributed if a trust beneficiary dies before the estate is settled in California. If such provisions are present, then the issue of the deceased beneficiary (transferee) doesn't take his or her place (California Probate Code Section 21110).

Trust administration guidance is just a click away.

In conclusion, understanding the intricacies of the Probate Code Section 16061.7, particularly as it relates to trust beneficiary notices, is essential for both trustees and beneficiaries in California. Clarity and accuracy in communicating trust changes can not only ensure legal compliance but also foster transparency and fairness among all involved parties.

Managing these complexities may seem daunting, but you don't have to navigate this process alone. Our seasoned estate and trust professionals are here to guide you every step of the way.

Book a free consultation with us today. Let us help you smoothly and efficiently wind up the trust, ensuring all obligations are met and your peace of mind is secured.