citation: PROB § 16340

text:
(a) The following definitions apply for purposes of this section:

(1) “Capital distribution” means an entity distribution of money that is either of the following:

(A) A return of capital.

(B) A distribution in total or partial liquidation of the entity.

(2) “Entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization or arrangement in which a person owns or holds an interest, whether or not the entity is a taxpayer for federal income tax purposes. “Entity” does not include any of the following:

(A) A trust or estate to which Section 16341 applies.

(B) A business or other activity to which Section 16342 applies that is not conducted by an entity described in subparagraph (A).

(C) An asset-backed security.

(D) An instrument or arrangement to which Section 16355 applies.

(3) “Entity distribution” means a payment or transfer by an entity made to a person in the person’s capacity as an owner or holder of an interest in the entity.

(b) For purposes of this section, an attribute or action of an entity includes an attribute or action of any other entity in which the entity owns or holds an interest, including an interest owned or held indirectly through another entity.

(c) Except as otherwise provided in paragraphs (2) to (4), inclusive, of subdivision (d), a fiduciary shall allocate money received in an entity distribution to income.

(d) A fiduciary shall allocate to principal all of the following:

(1) Property received in an entity distribution that is not money.

(2) Money received in an entity distribution in an exchange for part or all of the fiduciary’s interest in the entity, to the extent the entity distribution reduces the fiduciary’s interest in the entity relative to the interests of other persons that own or hold interests in the entity.

(3) Money received in an entity distribution that the fiduciary determines or estimates is a capital distribution.

(4) Money received in an entity distribution from an entity that is a regulated investment company or real estate investment trust if the money received is a capital gain dividend for federal income tax purposes.

(5) Money received in an entity distribution that is treated, for federal income purposes, comparably to the treatment described in paragraph (4).

(e) A fiduciary may determine or estimate that money received in an entity distribution is a capital distribution in any of the following ways:

(1) By relying without inquiry or investigation on a characterization of the entity distribution provided by or on behalf of the entity, except under either of the following circumstances:

(A) The fiduciary determines, on the basis of information known to the fiduciary, that the characterization is or may be incorrect.

(B) The fiduciary owns or holds more than 50 percent of the voting interest in the entity.

(2) By determining or estimating, on the basis of information known to the fiduciary or provided to the fiduciary by or on behalf of the entity, that the total amount of money and property received by the fiduciary in the entity distribution or a series of related entity distributions is, or will be, greater than 20 percent of the fair market value of the fiduciary’s interest in the entity.

(3) If neither paragraph (1) nor (2) applies, by considering the factors in subdivision (f) and the information known to the fiduciary or provided to the fiduciary by, or on behalf of, the entity.

(f) In making a determination or estimate under paragraph (3) of subdivision (e), a fiduciary may consider the following:

(1) A characterization of an entity distribution provided by or on behalf of the entity.

(2) The amount of money or property received in either of the following:

(A) The entity distribution.

(B) What the fiduciary determines is, or will be, a series of related entity distributions.

(3) The amount described in paragraph (2) compared to the amount the fiduciary determines or estimates is, during the current or preceding accounting periods, either of the following:

(A) The entity’s operating income.

(B) The proceeds of the entity’s sale or other disposition of any of the following:

(i) All or part of the business or other activity conducted by the entity.

(ii) One or more business assets that are not sold to customers in the ordinary course of the business or other activity conducted by the entity.

(iii) One or more assets other than business assets, unless the entity’s primary activity is to invest in assets to realize gain on the disposition of all or some of the assets.

(C) If the entity’s primary activity is to invest in assets to realize gain on the disposition of all or some of the assets, the gain realized on the disposition.

(D) The entity’s regular, periodic entity distributions.

(E) The amount of money the entity has accumulated.

(F) The amount of money the entity has borrowed.

(G) The amount of money the entity has received from the sources described in Sections 16346, 16349, 16350, and 16351.

(H) The amount of money the entity has received from a source not otherwise described in this paragraph.

(4) Any other factor the fiduciary determines is relevant.

(g) If, after applying subdivisions (c) to (f), inclusive, a fiduciary determines that a part of an entity distribution is a capital distribution but is in doubt about the amount of the entity distribution that is a capital distribution, the fiduciary shall allocate to principal the amount of the entity distribution that is in doubt.

(h) If a fiduciary receives additional information about the application of this section to an entity distribution before the fiduciary has paid part or all of the entity distribution to a beneficiary, the fiduciary may consider the additional information before making the payment to the beneficiary and may change a decision to make the payment to the beneficiary.

(i) If a fiduciary receives additional information about the application of this section to an entity distribution after the fiduciary has paid part or all of the entity distribution to a beneficiary, the fiduciary has no duty to change or recover the payment to the beneficiary but may consider that information in determining whether to exercise the power to adjust under Section 16327.

article: 4. Allocation of Receipts

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 3. Uniform Fiduciary Income and Principal Act > 4. Allocation of Receipts


kind: section

code: PROB

citation: PROB § 16341

text: A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under Article 3 (commencing with Section 16330), from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity, and shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, Section 16340, 16354, or 16355 applies to a receipt from the trust.

history: (History: Repealed and added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)

division: 9. TRUST LAW

part: 4. TRUST ADMINISTRATION

chapter: 3. Uniform Fiduciary Income and Principal Act

article: 4. Allocation of Receipts


citation: PROB § 16342

text:
(a) This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of doing either of the following:

(1) Accounting for the business or other activity as part of the fiduciary’s general accounting records.

(2) Conducting the business or other activity through an entity described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 16340.

(b) A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.

(c) A fiduciary that accounts separately under this section for a business or other activity:

(1) May determine the extent to which the net money receipts of the business or other activity shall be retained for any of the following purposes:

(A) Working capital.

(B) The acquisition or replacement of fixed assets.

(C) Other reasonably foreseeable needs of the business or other activity.

(2) May determine the extent to which the remaining net money receipts are accounted for as principal or income in the fiduciary’s general accounting records for the trust.

(3) May make a determination under paragraph (1) separately and differently from the fiduciary’s decisions concerning distributions of income or principal.

(4) Shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary’s general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.

(d) Activities for which a fiduciary may account separately under this section include all of the following:

(1) Retail, manufacturing, service, and other traditional business activities.

(2) Farming.

(3) Raising and selling livestock and other animals.

(4) Managing rental properties.

(5) Extracting minerals, water, and other natural resources.

(6) Growing and cutting timber.

(7) An activity to which Section 16353, 16354, or 16355 applies.

(8) Any other business conducted by the fiduciary.

history: (History: Added by Stats. 2023, Ch. 28, Sec. 2. (SB 522) Effective January 1, 2024.)

article: 4. Allocation of Receipts


citation: PROB § 16343

text:
A fiduciary shall allocate to principal any of the following:

(a) To the extent not allocated to income under this chapter, an asset received from any of the following:

(1) An individual, during the individual’s lifetime.

(2) An estate.

(3) A trust, on termination of an income interest.

(4) A payor under a contract naming the fiduciary as beneficiary.

(b) Except as otherwise provided in this article, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset.

(c) An amount recovered from a third party to reimburse the fiduciary because of a disbursement described in subdivision (a) of Section 16361, or for another reason to the extent not based on loss of income.

(d) Proceeds of property taken by eminent domain, except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the period.

(e) Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or shall distribute income.

(f) Other receipts as provided in Article 3 (commencing with Section 16330).

article: 4. Allocation of Receipts


citation: PROB § 16344

text:
To the extent a fiduciary does not account for the management of rental property as a business under Section 16342, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. Both of the following apply to an amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:

(1) The amount shall be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this chapter.

(2) The amount is not allocated to income or available for distribution to a beneficiary until the fiduciary’s contractual obligations have been satisfied with respect to that amount.

article: 4. Allocation of Receipts


citation: PROB § 16345

text:
(a) This section does not apply to an obligation to which Section 16348, 16349, 16350, 16351, 16353, 16354, or 16355 applies.

(b) A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.

(c) A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary. A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.

article: 4. Allocation of Receipts


citation: PROB § 16346

text:
(a) This section does not apply to a contract to which Section 16348 applies.

(b) Except as otherwise provided in subdivision (c), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.

(c) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of any of the following:

(1) Occupancy or other use by a current income beneficiary.

(2) Income.

(3) Subject to Section 16342, profits from a business.

article: 4. Allocation of Receipts


citation: PROB § 16347

text:
(a) If a fiduciary determines that an allocation between income and principal required by Section 16348, 16349, 16350, 16351, or 16354 is insubstantial, the fiduciary may allocate the entire amount to principal, unless subdivision (e) of Section 16327 applies to the allocation.

(b) A fiduciary may presume an allocation is insubstantial under subdivision (a) if both of the following conditions are met:

(1) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent.

(2) The asset producing the receipt to be allocated has a fair market value of less than 10 percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.

(c) The power to make a determination under subdivision (a) may be either of the following:

(1) Exercised by a cofiduciary in the manner described in subdivision (f) of Section 16327.

(2) Released or delegated for a reason described in subdivision (g) of Section 16327, and in the manner described in subdivision (h) of Section 16327.

(d) This section does not impose a duty on the trustee to make an allocation under this section, and the trustee is not liable for failure to make an allocation under this section.

article: 4. Allocation of Receipts


citation: PROB § 16348

text:
(a) The following definitions apply for purposes of this section:

(1) “Internal income of a separate fund” means the amount determined under subdivision (b).

(2) “Marital trust” means a trust that meets all the following criteria:

(A) The settlor’s surviving spouse is the only current income beneficiary and is entitled to a distribution of all the current net income of the trust.

(B) The trust qualifies for a marital deduction with respect to the settlor’s estate under Section 2056 of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 2056) because of either of the following:

(i) An election to qualify for a marital deduction under Section 2056(b)(7) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 2056(b)(7)) has been made.

(ii) The trust qualifies for a marital deduction under Section 2056(b)(5) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 2056(b)(5)).

(3) “Payment” means an amount a fiduciary may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in exchange for future amounts the fiduciary may receive. The term includes an amount received in money or property from the payor’s general assets or from a separate fund created by the payor.

(4) “Separate fund” includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock bonus, or stock ownership plan.

(b) For each accounting period, the following rules apply to a separate fund:

(1) The fiduciary shall determine the internal income of the separate fund as if the separate fund were a trust subject to this chapter.

(2) If the fiduciary cannot determine the internal income of the separate fund under paragraph (1), the internal income of the separate fund is deemed to equal 4 percent of the value of the separate fund, according to the most recent statement of value preceding the beginning of the accounting period.

(3) If the fiduciary cannot determine the value of the separate fund under paragraph (2), the value of the separate fund is deemed to equal the present value of the expected future payments, as determined under Section 7520 of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 7520) for the month preceding the beginning of the accounting period for which the computation is made.

(c) A fiduciary shall allocate a payment received from a separate fund during an accounting period to income, to the extent of the internal income of the separate fund during the period, and the balance to principal.

(d) The fiduciary of a marital trust shall do all of the following:

(1) Withdraw from a separate fund the amount the current income beneficiary of the trust requests the fiduciary to withdraw, not greater than the amount by which the internal income of the separate fund during the accounting period exceeds the amount the fiduciary otherwise receives from the separate fund during the period.

(2) Transfer from principal to income the amount the current income beneficiary requests the fiduciary to transfer, not greater than the amount by which the internal income of the separate fund during the period exceeds the amount the fiduciary receives from the separate fund during the period after the application of paragraph (1).

(3) Distribute all of the following to the current income beneficiary as income:

(A) The amount of the internal income of the separate fund received or withdrawn during the period.

(B) The amount transferred from principal to income under paragraph (2).

(e) For a trust, other than a marital trust, of which one or more current income beneficiaries are entitled to a distribution of all the current net income, the fiduciary shall transfer from principal to income the amount by which the internal income of a separate fund during the accounting period exceeds the amount the fiduciary receives from the separate fund during the period.

article: 4. Allocation of Receipts


citation: PROB § 16349

text:
(a) For purposes of this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.

(b) This section does not apply to a receipt subject to Section 16340, 16348, 16350, 16351, 16353, 16354, 16355, or 16362.

(c) A fiduciary shall make allocations in the following manner:

(1) To income:

(A) A receipt produced by a liquidating asset, to the extent the receipt does not exceed 4 percent of the value of the asset.

(B) If the fiduciary cannot determine the value of the asset, 10 percent of the receipt.

(2) To principal, the balance of the receipt.

article: 4. Allocation of Receipts


citation: PROB § 16350

text:
(a) To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under Section 16432, the fiduciary shall allocate the receipt in the following manner:

(1) To income, to the extent received:

(A) As delay rental or annual rent on a lease.

(B) As a factor for interest or the equivalent of interest under an agreement creating a production payment.

(C) On account of an interest in renewable water.

(2) To principal, if received from a production payment, to the extent subparagraph (B) of paragraph (1) does not apply.

(3) Between income and principal in a reasonable manner, to the extent received:

(A) On account of an interest in nonrenewable water.

(B) As a royalty, shut-in-well payment, take-or-pay payment, or bonus.

(C) From a working interest or any other interest not provided for in subparagraph (A) or (B), or paragraph (1) or (2).

(b) This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.

(c) An allocation of a receipt under paragraph (3) of subdivision (a) is presumed to be reasonable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code of 1986, as amended (Title 26 of the United States Code, as amended), as a deduction for depletion of the interest.

(d) If a fiduciary owns or holds an interest in minerals, water, or other natural resources before the effective date of this chapter, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before the effective date of this chapter. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after the effective date of this chapter, the fiduciary shall allocate receipts from the interest as provided in this section.

article: 4. Allocation of Receipts


citation: PROB § 16351

text:
(a) To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under Section 16342, the fiduciary shall allocate the net receipts:

(1) To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber.

(2) To principal, to the extent the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber.

(3) Between income and principal, if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in paragraphs (1) and (2).

(4) To principal, to the extent advance payments, bonuses, and other payments are not allocated under paragraph (1), (2), or (3).

(b) In determining net receipts to be allocated under subdivision (a), a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.

(c) This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.

(d) If a fiduciary owns or holds an interest in land used for growing and cutting timber before the effective date of this chapter, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before the effective date of this chapter. If the fiduciary acquires an interest in land used for growing and cutting timber on or after the effective date of this chapter, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.

article: 4. Allocation of Receipts


citation: PROB § 16352

text:
(a) If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor’s spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to do any of the following:

(1) Make property productive of income.

(2) Convert property to property productive of income within a reasonable time.

(3) Exercise the power to adjust under Section 16327.

(b) The trustee may decide which action or combination of actions in subdivision (a) to take.

article: 4. Allocation of Receipts


citation: PROB § 16353

text:
(a) For purposes of this section, “derivative” means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed-income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit default events.

(b) To the extent a fiduciary does not account for a transaction in derivatives as a business under Section 16342, the fiduciary shall allocate 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction to income and the balance to principal.

(c) Subdivision (d) applies under the following circumstances:

(1) If a fiduciary does any of the following:

(A) Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted.

(B) Grants an option that permits another person to sell property to the trust.

(C) Acquires an option to buy property for the trust or an option to sell an asset owned by the trust.

(2) The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.

(d) If this subdivision applies, the fiduciary shall allocate 10 percent to income and the balance to principal of the following amounts:

(1) An amount received for granting the option.

(2) An amount paid to acquire the option.

(3) Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.

article: 4. Allocation of Receipts


citation: PROB § 16354

text:
(a) Except as otherwise provided in subdivision (b), a fiduciary shall allocate to income a receipt from or related to an asset-backed security, to the extent the payor identifies the payment as being from interest or other current return, and to principal the balance of the receipt.

(b) If a fiduciary receives one or more payments in exchange for part or all of the fiduciary’s interest in an asset-backed security, including a liquidation or redemption of the fiduciary’s interest in the security, the fiduciary shall allocate to income 10 percent of receipts from the transaction and 10 percent of disbursements made in connection with the transaction, and to principal the balance of the receipts and disbursements.

article: 4. Allocation of Receipts


citation: PROB § 16355

text: A fiduciary shall allocate receipts from, or related to, a financial instrument or arrangement not otherwise addressed by this chapter. The allocation shall be consistent with the principles of Sections 16353 and 16354.

article: 4. Allocation of Receipts


citation: PROB § 16360

text:
Subject to Section 16363, and except as otherwise provided in paragraph (2) or (3) of subdivision (c) of Section 16370, a fiduciary shall disburse from income all of the following:

(a) One-half of both of the following:

(1) The regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient.

(2) An expense for an accounting, judicial, or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient.

(b) The balance of the disbursements described in paragraph (1) of subdivision (a), to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries.

(c) Another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient.

(d) A premium on insurance covering loss of a principal asset or income from or use of the asset.

article: 5. Allocation of Disbursements

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 3. Uniform Fiduciary Income and Principal Act > 5. Allocation of Disbursements


citation: PROB § 16361

text:
(a) Subject to Section 16364, and except as otherwise provided in paragraph (2) of subdivision (c) of Section 16370, a fiduciary shall disburse from principal all of the following:

(1) The balance of the disbursements described in paragraph (1) of subdivision (a) of, and subdivision (c) of, Section 16360, after application of subdivision (b) of Section 16360.

(2) The fiduciary’s compensation calculated on principal as a fee for acceptance, distribution, or termination.

(3) A payment of an expense to prepare for or execute a sale or other disposition of property.

(4) A payment on the principal of a trust debt.

(5) A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property.

(6) A payment of a premium for insurance, including title insurance, not described in subdivision (d) of Section 16360, of which the fiduciary is the owner and beneficiary.

(7) A payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust.

(8) The following payments:

(A) A payment related to environmental matters, including:

(i) Reclamation.

(ii) Assessment of environmental conditions.

(iii) Remedying and removing environmental contamination.

(iv) Monitoring remedial activities and the release of substances.

(v) Preventing future releases of substances.

(vi) Collecting amounts from persons liable or potentially liable for the costs of activities described in clauses (i) to (v), inclusive.

(vii) Penalties imposed under environmental laws or regulations.

(viii) Other actions to comply with environmental laws or regulations.

(ix) Statutory or common law claims by third parties.

(x) Defending claims based on environmental matters.

(B) A payment for a premium for insurance for matters described in subparagraph (A).

(9) Payments representing extraordinary repairs or expenses incurred in making a capital improvement to trust property, including special assessments.

(b) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

article: 5. Allocation of Disbursements


citation: PROB § 16362

text:
(a) For purposes of this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.

(b) A fiduciary may transfer to principal a reasonable amount of the net money receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:

(1) Of the part of real property used or available for use by a beneficiary as a residence.

(2) Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary.

(3) Under this section, to the extent the fiduciary accounts under either of the following:

(A) Section 16349, for the asset.

(B) Section 16342, for the business or other activity in which the asset is used.

(c) An amount transferred to principal under this section need not be separately held.

article: 5. Allocation of Disbursements


citation: PROB § 16363

text:
(a) If a fiduciary makes or expects to make an income disbursement described in subdivision (b), the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.

(b) To the extent the fiduciary has not been, and does not expect to be, reimbursed by a third party, income disbursements to which subdivision (a) applies include all of the following:

(1) An amount chargeable to principal, but paid from income because principal is illiquid.

(2) A disbursement made to prepare property for sale, including improvements and commissions.

(3) A disbursement described in Section 16360.

(c) If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subdivision (a).

article: 5. Allocation of Disbursements


citation: PROB § 16364

text:
(a) If a fiduciary makes or expects to make a principal disbursement described in subdivision (b), the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.

(b) To the extent a fiduciary has not been, and does not expect to be, reimbursed by a third party, principal disbursements to which subdivision (a) applies include all of the following:

(1) An amount chargeable to income but paid from principal because income is not sufficient.

(2) The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment.

(3) A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions.

(4) A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment.

(5) A disbursement described in subdivision (a) of Section 16361.

(c) If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subdivision (a).

article: 5. Allocation of Disbursements


citation: PROB § 16365

text:
(a) A tax required to be paid by a fiduciary that is based on receipts allocated to income shall be paid from income.

(b) A tax required to be paid by a fiduciary that is based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing authority.

(c) Subject to subdivision (d) and Sections 16363, 16364, and 16366, a tax required to be paid by a fiduciary on a share of an entity’s taxable income in an accounting period shall be paid from the following:

(1) Income and principal, proportionately to the allocation between income and principal of receipts from the entity in the period.

(2) Principal, to the extent the tax exceeds the receipts from the entity in the period.

(d) After applying subdivisions (a) to (c), inclusive, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.

article: 5. Allocation of Disbursements


citation: PROB § 16366

text:
(a) A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries that arises from any of the following:

(1) An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subdivision (b) applies.

(2) An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary.

(3) Ownership by the fiduciary of an interest in an entity, a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.

(b) If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement shall equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced shall be the same as its share of the total decrease in income tax.

(c) A fiduciary that charges a beneficiary under subdivision (b) may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.

article: 5. Allocation of Disbursements


citation: PROB § 16367

text:
Unless otherwise provided by the governing instrument, determined by the trustee, or ordered by the court, distributions to beneficiaries shall be considered paid in the following order from the following sources:

(a) From net taxable income other than capital gains.

(b) From net realized short-term capital gains.

(c) From net realized long-term capital gains.

(d) From tax-exempt and other income.

(e) From principal of the trust.

article: 5. Allocation of Disbursements


citation: PROB § 16370

text:
(a) This section applies when either of the following occurs:

(1) The death of an individual results in the creation of an estate or trust.

(2) An income interest in a trust terminates, whether the trust continues or is distributed.

(b) A fiduciary of an estate or trust with an income interest that terminates shall determine, under subdivision (g) and Article 4 (commencing with Section 16340), Article 5 (commencing with Section 16360), and Article 7 (commencing with Section 16375), the amount of net income and net principal receipts received from property specifically given to a beneficiary. The fiduciary shall distribute the net income and net principal receipts to the beneficiary that is to receive the specific property.

(c) A fiduciary shall determine the income and net income of an estate or income interest in a trust that terminates, other than the amount of net income determined under subdivision (b), under Article 4 (commencing with Section 16340), Article 5 (commencing with Section 16360), and Article 7 (commencing with Section 16375), and by doing the following:

(1) Including in net income all income from property used or sold to discharge liabilities.

(2) Paying, from income or principal, in the fiduciary’s discretion, fees of attorneys, accountants, and fiduciaries, court costs and other expenses of administration, and interest on estate and inheritance taxes and other taxes imposed because of the decedent’s death, but the fiduciary may pay the expenses from income of property passing to a trust for which the fiduciary claims a federal estate tax marital or charitable deduction, only to the extent that either of the following conditions is met:

(A) The payment of the expenses from income will not cause the reduction or loss of the deduction.

(B) The fiduciary makes an adjustment under subdivision (b) of Section 16366.

(3) Paying from principal other disbursements made or incurred in connection with the settlement of the estate or the winding up of an income interest that terminates, including both of the following:

(A) To the extent authorized by the decedent’s will, the terms of the trust, or applicable law, debts, funeral expenses, disposition of remains, family allowances, estate and inheritance taxes, and other taxes imposed because of the decedent’s death.

(B) Related penalties that are apportioned by the decedent’s will, the terms of the trust, or applicable law, to the estate or income interest that terminates.

(d) A specific gift distributable under a trust shall carry with it the same benefits and burdens as a specific devise under a will, as set forth in Chapter 8 (commencing with Section 12000) of Part 10 of Division 7.

(e) A general pecuniary gift, an annuity, or a gift of maintenance distributable under a trust carries with it income and bears interest in the same manner as a general pecuniary devise, an annuity, or a gift of maintenance under a will, as set forth in Chapter 8 (commencing with Section 12000) of Part 10 of Division 7.

(f) A fiduciary shall distribute net income remaining after payments required by subdivisions (d) and (e) in the manner described in Section 16371 to all other beneficiaries, including a beneficiary that receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.

(g) A fiduciary may not reduce principal or income receipts from property described in subdivision (b) because of a payment described in Section 16360 or 16361 to the extent the decedent’s will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property shall be determined by including the amount the fiduciary receives or pays regarding the property, whether the amount accrued or became due before, on, or after the date of the decedent’s death or an income interest’s terminating event, and making a reasonable provision for an amount the estate or income interest may become obligated to pay after the property is distributed.

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 3. Uniform Fiduciary Income and Principal Act > 6. Death of Individual or Termination of Income Interest


citation: PROB § 16371

text:
(a) Except to the extent that Article 3 (commencing with Section 16330) applies for a beneficiary that is a trust, each beneficiary described in subdivision (f) of Section 16370 is entitled to receive a share of the net income equal to the beneficiary’s fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent’s death, an income interest’s other terminating event, or the preceding distribution by the fiduciary.

(b) In determining a beneficiary’s share of net income under subdivision (a), the following rules apply:

(1) The beneficiary is entitled to receive a share of the net income equal to the beneficiary’s fractional interest in the undistributed principal assets immediately before the distribution date.

(2) The beneficiary’s fractional interest under paragraph (1) shall be calculated on the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation, and without regard to either of the following:

(A) Property specifically given to a beneficiary under the decedent’s will or the terms of the trust.

(B) Property required to pay pecuniary amounts not in trust.

(3) The distribution date under paragraph (1) may be the date as of which the fiduciary calculates the value of the assets, if that date is reasonably near the date on which the assets are distributed.

(c) To the extent a fiduciary does not distribute under this section all the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.

(d) If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent’s death, an income interest’s terminating event, or the preceding distribution by the fiduciary.

article: 6. Death of Individual or Termination of Income Interest


citation: PROB § 16375

text:
(a) An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to either of the following:

(1) The trust for the current income beneficiary.

(2) A successive interest for a successor beneficiary.

(b) An asset becomes subject to a trust under paragraph (1) of subdivision (a) as follows:

(1) For an asset that is transferred to the trust during the settlor’s life, on the date the asset is transferred.

(2) For an asset that becomes subject to the trust because of a decedent’s death, on the date of the decedent’s death, even if there is an intervening period of administration of the decedent’s estate.

(3) For an asset that is transferred to a fiduciary by a third party because of a decedent’s death, on the date of the decedent’s death.

(c) An asset becomes subject to a successive interest under paragraph (2) of subdivision (a) on the day after the preceding income interest ends, as determined under subdivision (d), even if there is an intervening period of administration to wind up the preceding income interest.

(d) An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may, or is required to, distribute income.

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 3. Uniform Fiduciary Income and Principal Act > 7. Apportionment at Beginning and End of Income Interest


citation: PROB § 16376

text:
(a) A fiduciary shall allocate an income receipt or disbursement, other than a receipt to which subdivision (b) of Section 16370 applies, to principal if its due date occurs before the date on which either of the following occurs:

(1) For an estate, the decedent died.

(2) For a trust or successive interest, an income interest begins.

(b) If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary shall allocate the receipt or disbursement to income.

(c) If an income receipt or disbursement is not periodic or has no due date, a fiduciary shall treat the receipt or disbursement under this section as accruing from day to day. The fiduciary shall allocate to principal the portion of the receipt or disbursement accruing before the date on which a decedent died or an income interest begins, and to income the balance.

(d) A receipt or disbursement is periodic under subdivisions (b) and (c) under either of the following circumstances:

(1) The receipt or disbursement shall be paid at regular intervals under an obligation to make payments.

(2) The payor customarily makes payments at regular intervals.

(e) An item of income or obligation is due under this section on the date the payor is required to make a payment. If a payment date is not stated, there is no due date.

(f) Distributions to shareholders or other owners from an entity to which Section 16340 applies are due at one of the following times:

(1) On the date fixed by or on behalf of the entity for determining the persons entitled to receive the distribution.

(2) If a date is not fixed, on the date of the decision by or on behalf of the entity to make the distribution.

(3) If a date is not fixed and the fiduciary does not know the date of the decision by or on behalf of the entity to make the distribution, on the date the fiduciary learns of the decision.

article: 7. Apportionment at Beginning and End of Income Interest


citation: PROB § 16377

text:
(a) For purposes of this section, “undistributed income” means net income received on or before the date on which an income interest ends. “Undistributed income” does not include an item of income or expense that is due or accrued, or net income that has been added or is required to be added to principal under the terms of the trust.

(b) Except as otherwise provided in subdivision (c), when a mandatory income interest of a beneficiary ends, the fiduciary shall pay the beneficiary’s share of the undistributed income that is not disposed of under the terms of the trust to the beneficiary or, if the beneficiary does not survive the date the interest ends, to the beneficiary’s estate.

(c) If a beneficiary has an unqualified power to withdraw more than 5 percent of the value of a trust immediately before an income interest ends, both of the following shall apply:

(1) The fiduciary shall allocate to principal the undistributed income from the portion of the trust that may be withdrawn.

(2) Subdivision (b) applies only to the balance of the undistributed income.

(d) When a fiduciary’s obligation to pay a fixed annuity or a fixed fraction of the value of assets ends, the fiduciary shall prorate the final payment as required to preserve an income tax, gift tax, estate tax, or other tax benefit.


citation: PROB § 16380

text: In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

article: 8. Miscellaneous Provisions

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 3. Uniform Fiduciary Income and Principal Act > 8. Miscellaneous Provisions


citation: PROB § 16381

text: This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001 et seq.), but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C. Sec. 7001(c)), or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C. Sec. 7003(b)).

article: 8. Miscellaneous Provisions


citation: PROB § 16382

text: This chapter applies to a trust or estate existing or created on or after the effective date of this chapter, except as otherwise expressly provided in the terms of the trust or this chapter.

article: 8. Miscellaneous Provisions


citation: PROB § 16383

text: If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

article: 8. Miscellaneous Provisions


citation: PROB § 16400

text: A violation by the trustee of any duty that the trustee owes the beneficiary is a breach of trust.

history: (History: Enacted by Stats. 1990, Ch. 79.)

article: 1. Liability for Breach of Trust

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 4. Liability of Trustees to Beneficiaries > 1. Liability for Breach of Trust


citation: PROB § 16401

text:
(a) Except as provided in subdivision (b), the trustee is not liable to the beneficiary for the acts or omissions of an agent.

(b) Under any of the circumstances described in this subdivision, the trustee is liable to the beneficiary for an act or omission of an agent employed by the trustee in the administration of the trust that would be a breach of the trust if committed by the trustee:

(1) Where the trustee directs the act of the agent.

(2) Where the trustee delegates to the agent the authority to perform an act that the trustee is under a duty not to delegate.

(3) Where the trustee does not use reasonable prudence in the selection of the agent or the retention of the agent selected by the trustee.

(4) Where the trustee does not periodically review the agent’s overall performance and compliance with the terms of the delegation.

(5) Where the trustee conceals the act of the agent.

(6) Where the trustee neglects to take reasonable steps to compel the agent to redress the wrong in a case where the trustee knows of the agent’s acts or omissions.

(c) The liability of a trustee for acts or omissions of agents that occurred before July 1, 1987, is governed by prior law and not by this section.

history: (History: Amended by Stats. 1995, Ch. 63, Sec. 9. Effective January 1, 1996.)

chapter: 4. Liability of Trustees to Beneficiaries

article: 1. Liability for Breach of Trust


citation: PROB § 16402

text:
(a) Except as provided in subdivision (b), a trustee is not liable to the beneficiary for a breach of trust committed by a cotrustee.

(b) A trustee is liable to the beneficiary for a breach committed by a cotrustee under any of the following circumstances:

(1) Where the trustee participates in a breach of trust committed by the cotrustee.

(2) Where the trustee improperly delegates the administration of the trust to the cotrustee.

(3) Where the trustee approves, knowingly acquiesces in, or conceals a breach of trust committed by the cotrustee.

(4) Where the trustee negligently enables the cotrustee to commit a breach of trust.

(5) Where the trustee neglects to take reasonable steps to compel the cotrustee to redress a breach of trust in a case where the trustee knows or has information from which the trustee reasonably should have known of the breach.

(c) The liability of a trustee for acts or omissions of a cotrustee that occurred before July 1, 1987, is governed by prior law and not by this section.

article: 1. Liability for Breach of Trust


citation: PROB § 16403

text:
(a) Except as provided in subdivision (b), a successor trustee is not liable to the beneficiary for a breach of trust committed by a predecessor trustee.

(b) A successor trustee is liable to the beneficiary for breach of trust involving acts or omissions of a predecessor trustee in any of the following circumstances:

(1) Where the successor trustee knows or has information from which the successor trustee reasonably should have known of a situation constituting a breach of trust committed by the predecessor trustee and the successor trustee improperly permits it to continue.

(2) Where the successor trustee neglects to take reasonable steps to compel the predecessor trustee to deliver the trust property to the successor trustee.

(3) Where the successor trustee neglects to take reasonable steps to redress a breach of trust committed by the predecessor trustee in a case where the successor trustee knows or has information from which the successor trustee reasonably should have known of the predecessor trustee’s breach.

(c) The liability of a trustee for acts or omissions of a predecessor trustee that occurred before July 1, 1987, is governed by prior law and not by this section.

article: 1. Liability for Breach of Trust


citation: PROB § 16420

text:
(a) If a trustee commits a breach of trust, or threatens to commit a breach of trust, a beneficiary or cotrustee of the trust may commence a proceeding for any of the following purposes that is appropriate:

(1) To compel the trustee to perform the trustee’s duties.

(2) To enjoin the trustee from committing a breach of trust.

(3) To compel the trustee to redress a breach of trust by payment of money or otherwise.

(4) To appoint a receiver or temporary trustee to take possession of the trust property and administer the trust.

(5) To remove the trustee.

(6) Subject to Section 18100, to set aside acts of the trustee.

(7) To reduce or deny compensation of the trustee.

(8) Subject to Section 18100, to impose an equitable lien or a constructive trust on trust property.

(9) Subject to Section 18100, to trace trust property that has been wrongfully disposed of and recover the property or its proceeds.

(b) The provision of remedies for breach of trust in subdivision (a) does not prevent resort to any other appropriate remedy provided by statute or the common law.

article: 2. Remedies for Breach of Trust

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 4. Liability of Trustees to Beneficiaries > 2. Remedies for Breach of Trust


citation: PROB § 16421

text: The remedies of a beneficiary against the trustee are exclusively in equity.

article: 2. Remedies for Breach of Trust


citation: PROB § 16440

text:
(a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances:

(1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest.

(2) Any profit made by the trustee through the breach of trust, with interest.

(3) Any profit that would have accrued to the trust estate if the loss of profit is the result of the breach of trust.

(b) If the trustee has acted reasonably and in good faith under the circumstances as known to the trustee, the court, in its discretion, may excuse the trustee in whole or in part from liability under subdivision (a) if it would be equitable to do so.

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 4. Liability of Trustees to Beneficiaries > 3. Measure of Liability for Breach of Trust


citation: PROB § 16441

text:
(a) If the trustee is liable for interest pursuant to Section 16440, the trustee is liable for the greater of the following amounts:

(1) The amount of interest that accrues at the legal rate on judgments in effect during the period when the interest accrued.

(2) The amount of interest actually received.

(b) If the trustee has acted reasonably and in good faith under the circumstances as known to the trustee, the court, in its discretion, may excuse the trustee in whole or in part from liability under subdivision (a) if it would be equitable to do so.

history: (History: Amended by Stats. 1998, Ch. 77, Sec. 5. Effective January 1, 1999.)

article: 3. Measure of Liability for Breach of Trust


citation: PROB § 16442

text: The provisions in this article for liability of a trustee for breach of trust do not prevent resort to any other remedy available under the statutory or common law.


citation: PROB § 16460

text:
(a) Unless a claim is previously barred by adjudication, consent, limitation, or otherwise:

(1) If a beneficiary has received an interim or final account in writing, or other written report, that adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years after receipt of the account or report. An account or report adequately discloses existence of a claim if it provides sufficient information so that the beneficiary knows of the claim or reasonably should have inquired into the existence of the claim.

(2) If an interim or final account in writing or other written report does not adequately disclose the existence of a claim against the trustee for breach of trust or if a beneficiary does not receive any written account or report, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years after the beneficiary discovered, or reasonably should have discovered, the subject of the claim.

(b) For the purpose of subdivision (a), a beneficiary is deemed to have received an account or report, as follows:

(1) In the case of an adult who is reasonably capable of understanding the account or report, if it is received by the adult personally.

(2) In the case of an adult who is not reasonably capable of understanding the account or report, if it is received by the person’s legal representative, including a guardian ad litem or other person appointed for this purpose.

(3) In the case of a minor, if it is received by the minor’s guardian or, if the minor does not have a guardian, if it is received by the minor’s parent so long as the parent does not have a conflict of interest.

(c) A written account or report under this section may, but need not, satisfy the requirements of Section 16061 or 16063 or any other provision.

history: (History: Amended by Stats. 1996, Ch. 862, Sec. 40. Effective January 1, 1997.)

article: 4. Limitations and Exculpation

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 4. Liability of Trustees to Beneficiaries > 4. Limitations and Exculpation


citation: PROB § 16461

text:
(a) Except as provided in subdivision (b), (c), or (d), the trustee can be relieved of liability for breach of trust by provisions in the trust instrument.

(b) A provision in the trust instrument is not effective to relieve the trustee of liability (1) for breach of trust committed intentionally, with gross negligence, in bad faith, or with reckless indifference to the interest of the beneficiary, or (2) for any profit that the trustee derives from a breach of trust.

(c) Subject to subdivision (b), a provision in a trust instrument that releases the trustee from liability if a beneficiary fails to object to an item in an interim or final account or other written report within a specified time period is effective only if all of the following conditions are met:

(1) The account or report sets forth the item.

(2) The period specified in the trust instrument for the beneficiary to object is not less than 180 days, or the trustee elects to follow the procedure provided in subdivision (d).

(3) Written notice in 12-point boldface type is provided to a beneficiary with the account or report in the following form:

NOTICE TO BENEFICIARIES

YOU HAVE [insert “180 days” or the period specified in the trust instrument, whichever is longer] FROM YOUR RECEIPT OF THIS ACCOUNT OR REPORT TO MAKE AN OBJECTION TO ANY ITEM SET FORTH IN THIS ACCOUNT OR REPORT. ANY OBJECTION YOU MAKE MUST BE IN WRITING; IT MUST BE DELIVERED TO THE TRUSTEE WITHIN THE PERIOD STATED ABOVE; AND IT MUST STATE YOUR OBJECTION. YOUR FAILURE TO DELIVER A WRITTEN OBJECTION TO THE TRUSTEE WITHIN THE PERIOD STATED ABOVE WILL PERMANENTLY PREVENT YOU FROM LATER ASSERTING THIS OBJECTION AGAINST THE TRUSTEE. IF YOU DO MAKE AN OBJECTION TO THE TRUSTEE, THE THREE-YEAR PERIOD PROVIDED IN SECTION 16460 OF THE PROBATE CODE FOR COMMENCEMENT OF LITIGATION WILL APPLY TO CLAIMS BASED ON YOUR OBJECTION AND WILL BEGIN TO RUN ON THE DATE THAT YOU RECEIVE THIS ACCOUNT OR REPORT.

(d) A provision in a trust instrument that provides for a period less than 180 days to object to an item in an account or report shall be ineffective to release the trustee from liability. A trustee of a trust created by an instrument with an ineffective period may elect to be governed by the provisions of subdivision (c) by complying with the requirements of subdivision (c), except that “180 days” shall be substituted in the notice form for the ineffective period.

(e) Subject to subdivision (b), a beneficiary who fails to object in writing to an account or report that complies with the requirements of subdivision (c) within the specified, valid period shall be barred from asserting any claim against the trustee regarding an item that is adequately disclosed in the account or report. An item is adequately disclosed if the disclosure regarding the item meets the requirements of paragraph (1) of subdivision (a) of Section 16460.

(f) Except as provided in subdivision (a) of Section 16460, the trustee may not be released from liability as to any claim based on a written objection made by a beneficiary if the objection is delivered to the trustee within the specified, effective period. If a beneficiary has filed a written objection to an account or report that complies with the requirements of subdivision (c) within the specified, valid period that concerns an item that affects any other beneficiary of the trust, any affected beneficiary may join in the objection anytime within the specified, valid period or while the resolution of the objection is pending, whichever is later. This section is not intended to establish a class of beneficiaries for actions on an account and report or provide that the action of one beneficiary is for the benefit of all beneficiaries. This section does not create a duty for any trustee to notify beneficiaries of objections or resolution of objections.

(g) Provided that a beneficiary has filed a written objection to an account or report that complies with the requirements of subdivision (c) within the specified, valid period, a supplemental written objection may be delivered in the same manner as the objection not later than 180 days after the receipt of the account or report or no later than the period specified in the trust instrument, whichever is longer.

(h) Compliance with subdivision (c) excuses compliance with paragraph (6) of subdivision (a) of Section 16063 for the account or report to which that notice relates.

(i) Subject to subdivision (b), if proper notice has been given and a beneficiary has not made a timely objection, the trustee is not liable for any other claims adequately disclosed by any item in the account or report.

(j) Subdivisions (c) to (i), inclusive, apply to all accounts and reports submitted after the effective date of the act adding these subdivisions.

history: (History: Amended by Stats. 2004, Ch. 538, Sec. 1. Effective January 1, 2005.)

article: 4. Limitations and Exculpation


citation: PROB § 16462

text:
(a) Notwithstanding Section 16461, a trustee of a revocable trust is not liable to a beneficiary for any act performed or omitted pursuant to written directions from the person holding the power to revoke, including a person to whom the power to direct the trustee is delegated.

(b) Subdivision (a) applies to a trust that is revocable in part with respect to the interest of the beneficiary in that part of the trust property.

article: 4. Limitations and Exculpation


citation: PROB § 16463

text:
(a) Except as provided in subdivisions (b) and (c), a beneficiary may not hold the trustee liable for an act or omission of the trustee as a breach of trust if the beneficiary consented to the act or omission before or at the time of the act or omission.

(b) The consent of the beneficiary does not preclude the beneficiary from holding the trustee liable for a breach of trust in any of the following circumstances:

(1) Where the beneficiary was under an incapacity at the time of the consent or of the act or omission.

(2) Where the beneficiary at the time consent was given did not know of his or her rights and of the material facts (A) that the trustee knew or should have known and (B) that the trustee did not reasonably believe that the beneficiary knew.

(3) Where the consent of the beneficiary was induced by improper conduct of the trustee.

(c) Where the trustee has an interest in the transaction adverse to the interest of the beneficiary, the consent of the beneficiary does not preclude the beneficiary from holding the trustee liable for a breach of trust under any of the circumstances described in subdivision (b) or where the transaction to which the beneficiary consented was not fair and reasonable to the beneficiary.

article: 4. Limitations and Exculpation


citation: PROB § 16464

text:
(a) Except as provided in subdivision (b), a beneficiary may be precluded from holding the trustee liable for a breach of trust by the beneficiary’s release or contract effective to discharge the trustee’s liability to the beneficiary for that breach.

(b) A release or contract is not effective to discharge the trustee’s liability for a breach of trust in any of the following circumstances:

(1) Where the beneficiary was under an incapacity at the time of making the release or contract.

(2) Where the beneficiary did not know of his or her rights and of the material facts (A) that the trustee knew or reasonably should have known and (B) that the trustee did not reasonably believe that the beneficiary knew.

(3) Where the release or contract of the beneficiary was induced by improper conduct of the trustee.

(4) Where the transaction involved a bargain with the trustee that was not fair and reasonable.

article: 4. Limitations and Exculpation


citation: PROB § 16465

text:
(a) Except as provided in subdivision (b), if the trustee, in breach of trust, enters into a transaction that the beneficiary may at his or her option reject or affirm, and the beneficiary affirms the transaction, the beneficiary shall not thereafter reject it and hold the trustee liable for any loss occurring after the trustee entered into the transaction.

(b) The affirmance of a transaction by the beneficiary does not preclude the beneficiary from holding a trustee liable for a breach of trust if, at the time of the affirmance, any of the following circumstances existed:

(1) The beneficiary was under an incapacity.

(2) The beneficiary did not know of his or her rights and of the material facts (A) that the trustee knew or reasonably should have known and (B) that the trustee did not reasonably believe that the beneficiary knew.

(3) The affirmance was induced by improper conduct of the trustee.

(4) The transaction involved a bargain with the trustee that was not fair and reasonable.

article: 4. Limitations and Exculpation


citation: PROB § 16500

text: Subject to subdivision (d) of Section 16501, a trustee may give a notice of proposed action regarding a matter governed by Chapter 2 (commencing with Section 16200) or Chapter 3 (commencing with Section 16320) as provided in this chapter. For the purpose of this chapter, a proposed action includes a course of action or a decision not to take action. This chapter does not preclude an application or assertion of any other rights or remedies available to an interested party as otherwise provided in this part regarding an action to be taken or not to be taken by the trustee.

history: (History: Added by Stats. 2004, Ch. 54, Sec. 2. Effective January 1, 2005.)

chapter: 5. Notice of Proposed Action by Trustee

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 5. Notice of Proposed Action by Trustee


citation: PROB § 16501

text:
(a) The trustee who elects to provide notice pursuant to this chapter shall deliver notice pursuant to Section 1215 of the proposed action to each of the following:

(1) A beneficiary who is receiving, or is entitled to receive, income under the trust, including a beneficiary who is entitled to receive income at the discretion of the trustee.

(2) A beneficiary who would receive a distribution of principal if the trust were terminated at the time the notice is given.

(b) Notice of proposed action is not required to be given to a person who consents in writing to the proposed action. The consent may be executed at any time before or after the proposed action is taken.

(c) A trustee is not required to provide a copy of the notice of proposed action to a beneficiary who is known to the trustee but who cannot be located by the trustee after reasonable diligence or who is unknown to the trustee.

(d) Notwithstanding any other provision of this chapter, the trustee may not use a notice of proposed action in any of the following actions:

(1) Allowance of the trustee’s compensation.

(2) Allowance of compensation of the attorney for the trustee.

(3) Settlement of accounts.

(4) Discharge of the trustee.

(5) Sale of property of the trust to the trustee or to the attorney for the trustee.

(6) Exchange of property of the trust for property of the trustee or for property of the attorney for the trustee.

(7) Grant of an option to purchase property of the trust to the trustee or to the attorney for the trustee.

(8) Allowance, payment, or compromise of a claim of the trustee, or the attorney for the trustee, against the trust.

(9) Compromise or settlement of a claim, action, or proceeding by the trust against the trustee or against the attorney for the trust.

(10) Extension, renewal, or modification of the terms of a debt or other obligation of the trustee, or the attorney for the trustee, owing to or in favor of the trust.

history: (History: Amended by Stats. 2017, Ch. 319, Sec. 91. (AB 976) Effective January 1, 2018.)


citation: PROB § 16502

text:
The notice of proposed action shall state that it is given pursuant to this section and shall include all of the following:

(a) The name, mailing address, and electronic address of the trustee.

(b) The name, telephone number, and electronic address of a person who may be contacted for additional information.

(c) A description of the action proposed to be taken and an explanation of the reasons for the action.

(d) The time within which objections to the proposed action can be made, which shall be at least 45 days from the delivery or receipt of the notice of proposed action.

(e) The date on or after which the proposed action may be taken or is effective.

history: (History: Amended by Stats. 2017, Ch. 319, Sec. 92. (AB 976) Effective January 1, 2018.)


citation: PROB § 16503

text:
(a) A beneficiary may object to the proposed action by delivering a written objection pursuant to Section 1215 to the trustee at the address stated in the notice of proposed action within the time period specified in the notice of proposed action.

(b) A trustee is not liable to a beneficiary for an action regarding a matter governed by this part if the trustee does not receive a written objection to the proposed action from a beneficiary within the applicable period and the other requirements of this section are satisfied. If no beneficiary entitled to notice objects under this section, the trustee is not liable to any current or future beneficiary with respect to the proposed action. This subdivision does not apply to a person who is a minor or an incompetent adult at the time of receiving the notice of proposed action unless the notice is served on a guardian or conservator of the estate of the person.

(c) If the trustee receives a written objection within the applicable period, either the trustee or a beneficiary may petition the court to have the proposed action taken as proposed, taken with modifications, or denied. In the proceeding, a beneficiary objecting to the proposed action has the burden of proving that the trustee’s proposed action should not be taken. A beneficiary who has not objected is not estopped from opposing the proposed action in the proceeding.

(d) If the trustee decides not to implement the proposed action, the trustee shall notify the beneficiaries of the decision not to take the action and the reasons for the decision, and the trustee’s decision not to implement the proposed action does not itself give rise to liability to any current or future beneficiary. A beneficiary may petition the court to have the action taken, and has the burden of proving that it should be taken.

history: (History: Amended by Stats. 2017, Ch. 319, Sec. 93. (AB 976) Effective January 1, 2018.)


citation: PROB § 16504

text: This chapter does not require a trustee to use these procedures prior to taking any action.


citation: PROB § 16600

text:
(a) This chapter shall be known, and may be cited, as the California Uniform Directed Trust Act.

(b) The Legislature finds and declares all of the following:

(1) This chapter governs an arrangement commonly known as a directed trust.

(2) In a directed trust, the terms of the trust grant a person other than a trustee a power over some aspect of the trust’s administration.

(3) Under this chapter, this power is called a power of direction, the person that holds the power is called a trust director, a trustee that is subject to the power is called a directed trustee, and the trust is a directed trust.

(4) A directed trustee is required to take reasonable action to comply with a trust director’s exercise or nonexercise of a power of direction.

(5) Except for willful misconduct, a directed trustee is liable only for its own breach of trust in executing a direction and not for the trust director’s breach of trust in exercising or not exercising the power of direction.

history: (History: Added by Stats. 2023, Ch. 721, Sec. 3. (SB 801) Effective January 1, 2024.)

path: 9. TRUST LAW > 4. TRUST ADMINISTRATION > 6. California Uniform Directed Trust Act


citation: PROB § 16602

text:
For purposes of this chapter, the following definitions shall apply:

(a) “Breach of trust” includes a violation by a trust director or trustee of a duty imposed on that director or trustee by the terms of the trust, this chapter, or law of this state other than this chapter pertaining to trusts.

(b) “Directed trust” means a trust for which the terms of the trust grant a power of direction.

(c) “Directed trustee” means a trustee that is subject to a trust director’s power of direction.

(d) “Power of direction” means a power over a trust granted to a person by the terms of the trust to the extent the power is exercisable while the person is not serving as a trustee. Power of direction includes a power over the investment, management, or distribution of trust property or other matters of trust administration. The term excludes the powers described in subdivision (a) of Section 16606.

(e) “Settlor” means a person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion.

(f) “Terms of a trust” means either of the following:

(1) The manifestation of the settlor’s intent regarding a trust’s provisions as expressed in the trust instrument or established by other evidence that has been admitted in a judicial proceeding.

(2) The trust’s provisions as established, determined, or amended by a trustee or trust director in accordance with applicable law, the exercise of a power of appointment in accordance with applicable law, a court order, or other binding modification, including, but not limited to, under Section 15404.

(g) “Trust director” means a person that is granted a power of direction by the terms of a trust, to the extent the power is exercisable while the person is not serving as a trustee. The person is a trust director whether or not the terms of the trust refer to the person as a trust director and whether or not the person is a beneficiary or settlor of the trust.

chapter: 6. California Uniform Directed Trust Act


citation: PROB § 16604

text:
(a) This chapter applies to a trust, whenever created, that has its principal place of administration in this state, subject to all of the following rules:

(1) If the trust was created before January 1, 2024, this chapter applies only to a decision or action occurring on or after that date.

(2) If the principal place of administration of the trust is changed to this state on or after January 1, 2024, this chapter applies only to a decision or action occurring on or after the date of the change.

(b) Without precluding other means to establish a sufficient connection with the designated jurisdiction in a directed trust, terms of the trust that designate the principal place of administration of the trust are valid and controlling if all of the following are met:

(1) A trustee’s principal place of business is located in, or a trustee is a resident of, the designated jurisdiction.

(2) A trust director’s principal place of business is located in, or a trust director is a resident of, the designated jurisdiction.

(3) All or part of the administration occurs in the designated jurisdiction.


citation: PROB § 16605

text: Notwithstanding any other law, the consent of the public administrator, public guardian, or public conservator is required before they may be appointed to act as a trust director or directed trustee.


citation: PROB § 16606

text:
(a) This chapter does not apply to any of the following:

(1) A power of appointment.

(2) The power to appoint or remove a trustee or trust director.

(3) The power of a settlor over a trust, to the extent the settlor has a power to revoke the trust.

(4) The power of a beneficiary over a trust, to the extent the exercise or nonexercise of the power affects the beneficial interest of the beneficiary.

(5) The power over a trust if both of the following apply:

(A) The terms of the trust provide that the power is held in a nonfiduciary capacity.

(B) The power is required to be held in a nonfiduciary capacity to achieve the settlor’s tax objectives under the United States Internal Revenue Code of 1986 and regulations issued thereunder.

(b) Unless the terms of a trust provide otherwise, a power granted to a person to designate a recipient of an ownership interest in, or power of appointment over, trust property that is exercisable while the person is not serving as a trustee is a power of appointment and not a power of direction.


citation: PROB § 16608

text:
(a) Subject to Section 16610, the terms of a trust may grant a power of direction to a trust director.

(b) Unless the terms of a trust provide otherwise, a trust director may exercise any further power appropriate to the exercise or nonexercise of a power of direction granted to the trust director pursuant to subdivision (a).

(c) Unless the terms of a trust provide otherwise, trust directors with joint powers shall act by majority decision.


citation: PROB § 16610

text:
A trust director is subject to the same rules as a trustee in a like position and under similar circumstances in the exercise or nonexercise of a power of direction or further power under subdivision (b) of Section 16608 regarding either of the following:

(a) A payback provision in the terms of a trust necessary to comply with the reimbursement requirements of Medicaid law in Section 1917 of the Social Security Act (42 U.S.C. Section 1396p(d)(4)(A)) and regulations issued thereunder.

(b) A charitable interest in the trust, including notice regarding the interest to the Attorney General.


citation: PROB § 16612

text:
(a) Subject to subdivision (b), with respect to a power of direction or further power under subdivision (b) of Section 16608, both of the following apply:

(1) A trust director has the same fiduciary duty and liability in the exercise or nonexercise of the power, if the power is held individually, as a sole trustee in a like position and under similar circumstances or, if the power is held jointly with a trustee or another trust director, as a cotrustee in a like position and under similar circumstances.

(2) The terms of the trust may vary the trust director’s duty or liability to the same extent the terms of the trust could vary the duty or liability of a trustee in a like position and under similar circumstances.

(b) Unless the terms of a trust provide otherwise, if a trust director is licensed, certified, or otherwise authorized or permitted by law other than this chapter to provide health care in the ordinary course of the trust director’s business or practice of a profession, to the extent the trust director acts in that capacity, the trust director has no duty or liability under this chapter.

(c) The terms of a trust may impose a duty or liability on a trust director in addition to the duties and liabilities under this section.


citation: PROB § 16614

text:
(a) Subject to subdivision (b), a directed trustee shall take reasonable action to comply with a trust director’s exercise or nonexercise of a power of direction or further power under subdivision (b) of Section 16608, and the trustee is not liable for the action.

(b) A directed trustee shall not comply with a trust director’s exercise or nonexercise of a power of direction or further power under subdivision (b) of Section 16608 to the extent that, by complying, the trustee would engage in willful misconduct.

(c) An exercise of a power of direction under which a trust director may release a trustee or another trust director from liability for breach of trust is not effective if any of the following is true:

(1) The breach involved the trustee’s or other trust director’s willful misconduct.

(2) The release was induced by improper conduct of the trustee or other trust director in procuring the release.

(3) At the time of the release, the trust director did not know the material facts relating to the breach.

(d) A directed trustee that has reasonable doubt about their duty under this section may petition the court for instructions.

(e) The terms of a trust may impose a duty or liability on a directed trustee in addition to the duties and liabilities under this section.


citation: PROB § 16616

text:
(a) Subject to Section 16618, a trustee shall provide information to a trust director to the extent the information is reasonably related both to the powers or duties of the trustee and the powers or duties of the trust director.

(b) Subject to Section 16618, a trust director shall provide information to a trustee or another trust director to the extent the information is reasonably related both to the powers or duties of the trust director and the powers or duties of the trustee or other trust director.

(c) A trustee that acts in reliance on information provided by a trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trustee engages in willful misconduct.

(d) A trust director that acts in reliance on information provided by a trustee or another trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trust director engages in willful misconduct.


citation: PROB § 16618

text:
(a) (1) Unless the terms of a trust provide otherwise, a trustee does not have a duty to do either of the following:

(A) Monitor a trust director.

(B) Inform or give advice to a settlor, beneficiary, trustee, or trust director concerning an instance in which the trustee might have acted differently than the trust director.

(2) By taking an action described in paragraph (1), a trustee does not assume the duty excluded by paragraph (1).

(b) (1) Unless the terms of a trust provide otherwise, a trust director does not have a duty to do either of the following:

(A) Monitor a trustee or another trust director.

(B) Inform or give advice to a settlor, beneficiary, trustee, or another trust director concerning an instance in which the trust director might have acted differently than a trustee or another trust director.

(2) By taking an action described in paragraph (1), a trust director does not assume the duty excluded by paragraph (1).


citation: PROB § 16620

text: The terms of a trust may relieve a cotrustee from duty and liability with respect to another cotrustee’s exercise or nonexercise of a power of the other cotrustee to the same extent that, in a directed trust, a directed trustee is relieved from duty and liability with respect to a trust director’s power of direction under Sections 16614, 16616, and 16618.


citation: PROB § 16622

text:
(a) An action against a trust director for breach of trust shall be commenced within the same limitation period as in Section 16460 for an action for breach of trust against a trustee in a like position and under similar circumstances.

(b) A report or accounting has the same effect on the limitation period for an action against a trust director for breach of trust that the report or accounting would have under Section 16460 in an action for breach of trust against a trustee in a like position and under similar circumstances.


citation: PROB § 16624

text: In an action against a trust director for breach of trust, the director may assert the same defenses a trustee in a like position and under similar circumstances could assert in an action for breach of trust against the trustee.


citation: PROB § 16626

text:
(a) By accepting appointment as a trust director of a trust subject to this chapter, the trust director submits to personal jurisdiction of the courts of this state regarding any matter related to a power or duty of the trust director.

(b) This section does not preclude other methods of obtaining jurisdiction over a trust director.


citation: PROB § 16628

text:
Unless the terms of a trust provide otherwise, the rules applicable to a trustee apply to a trust director regarding all of the following matters:

(a) Acceptance under Sections 15600 and 15601.

(b) Giving of a bond to secure performance under Section 15602.

(c) Reasonable compensation under Section 15681.

(d) Resignation or removal under Article 3 (commencing with Section 15640) of Chapter 1.

(e) Vacancy and appointment of a successor under Section 15660.


citation: PROB § 16630

text: In applying and construing this chapter, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.


citation: PROB § 16632

text: This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).


citation: PROB § 17000

text:
(a) The superior court having jurisdiction over the trust pursuant to this part has exclusive jurisdiction of proceedings concerning the internal affairs of trusts.

(b) The superior court having jurisdiction over the trust pursuant to this part has concurrent jurisdiction of the following:

(1) Actions and proceedings to determine the existence of trusts.

(2) Actions and proceedings by or against creditors or debtors of trusts.

(3) Other actions and proceedings involving trustees and third persons.

chapter: 1. Jurisdiction and Venue

path: 9. TRUST LAW > 5. JUDICIAL PROCEEDINGS CONCERNING TRUSTS > 1. Jurisdiction and Venue


citation: PROB § 17001

text: In proceedings commenced pursuant to this division, the court is a court of general jurisdiction and has all the powers of the superior court.

history: (History: Amended by Stats. 1990, Ch. 710, Sec. 44. Operative July 1, 1991, by Sec. 48 of Ch. 710.)

part: 5. JUDICIAL PROCEEDINGS CONCERNING TRUSTS


citation: PROB § 17002

text:
(a) The principal place of administration of the trust is the usual place where the day-to-day activity of the trust is carried on by the trustee or its representative who is primarily responsible for the administration of the trust.

(b) If the principal place of administration of the trust cannot be determined under subdivision (a), it shall be determined as follows:

(1) If the trust has a single trustee, the principal place of administration of the trust is the trustee’s residence or usual place of business.

(2) If the trust has more than one trustee, the principal place of administration of the trust is the residence or usual place of business of any of the cotrustees as agreed upon by them or, if not, the residence or usual place of business of any of the cotrustees.


citation: PROB § 17003

text:
Subject to Section 17004:

(a) By accepting the trusteeship of a trust having its principal place of administration in this state the trustee submits personally to the jurisdiction of the court under this division.

(b) To the extent of their interests in the trust, all beneficiaries of a trust having its principal place of administration in this state are subject to the jurisdiction of the court under this division.


citation: PROB § 17004

text: The court may exercise jurisdiction in proceedings under this division on any basis permitted by Section 410.10 of the Code of Civil Procedure.


citation: PROB § 17005

text:
(a) The proper county for commencement of a proceeding pursuant to this division is either of the following:

(1) In the case of a living trust, the county where the principal place of administration of the trust is located.

(2) In the case of a testamentary trust, either the county where the decedent’s estate is administered or where the principal place of administration of the trust is located.

(b) If a living trust has no trustee, the proper county for commencement of a proceeding for appointing a trustee is the county where the trust property, or some portion of the trust property, is located.

(c) Except as otherwise provided in subdivisions (a) and (b), the proper county for commencement of a proceeding pursuant to this division is determined by the rules applicable to civil actions generally.


citation: PROB § 17006

text: There is no right to a jury trial in proceedings under this division concerning the internal affairs of trusts.


citation: PROB § 17100

text: Except as otherwise provided in this division, notice in proceedings commenced pursuant to this division, or notice otherwise required by this division, is governed by Part 2 (commencing with Section 1200) of Division 3.

history: (History: Added by Stats. 1990, Ch. 79, Sec. 14.)

chapter: 2. Notice

path: 9. TRUST LAW > 5. JUDICIAL PROCEEDINGS CONCERNING TRUSTS > 2. Notice


citation: PROB § 17105

text: A petitioner or other person required to give notice may cause notice to be given to any person interested in the trust without the need for a court order.


citation: PROB § 17200

text:
(a) Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.

(b) Proceedings concerning the internal affairs of a trust include, but are not limited to, proceedings for any of the following purposes:

(1) Determining questions of construction of a trust instrument.

(2) Determining the existence or nonexistence of any immunity, power, privilege, duty, or right.

(3) Determining the validity of a trust provision.

(4) Ascertaining beneficiaries and determining to whom property shall pass or be delivered upon final or partial termination of the trust, to the extent the determination is not made by the trust instrument.

(5) Settling the accounts and passing upon the acts of the trustee, including the exercise of discretionary powers.

(6) Instructing the trustee.

(7) Compelling the trustee to do any of the following:

(A) Provide a copy of the terms of the trust.

(B) Provide information about the trust under Section 16061 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 the requested information from the trustee within the six months preceding the request.

(C) Account to the beneficiary, subject to the provisions of Section 16064, if the trustee has failed to submit a requested account within 60 days after written request of the beneficiary and no account has been made within six months preceding the request.

(8) Granting powers to the trustee.

(9) Fixing or allowing payment of the trustee’s compensation or reviewing the reasonableness of the trustee’s compensation.

(10) Appointing or removing a trustee.

(11) Accepting the resignation of a trustee.

(12) Compelling redress of a breach of the trust by any available remedy.

(13) Approving or directing the modification or termination of the trust.

(14) Approving or directing the combination or division of trusts.

(15) Amending or conforming the trust instrument in the manner required to qualify a decedent’s estate for the charitable estate tax deduction under federal law, including the addition of mandatory governing instrument requirements for a charitable remainder trust as required by final regulations and rulings of the United States Internal Revenue Service.

(16) Authorizing or directing transfer of a trust or trust property to or from another jurisdiction.

(17) Directing transfer of a testamentary trust subject to continuing court jurisdiction from one county to another.

(18) Approving removal of a testamentary trust from continuing court jurisdiction.

(19) Reforming or excusing compliance with the governing instrument of an organization pursuant to Section 16105.

(20) Determining the liability of the trust for any debts of a deceased settlor. However, nothing in this paragraph shall provide standing to bring an action concerning the internal affairs of the trust to a person whose only claim to the assets of the decedent is as a creditor.

(21) Determining petitions filed pursuant to Section 15687 and reviewing the reasonableness of compensation for legal services authorized under that section. In determining the reasonableness of compensation under this paragraph, the court may consider, together with all other relevant circumstances, whether prior approval was obtained pursuant to Section 15687.

(22) If a member of the State Bar of California has transferred the economic interest of his or her practice to a trustee and if the member is a deceased member under Section 9764, a petition may be brought to appoint a practice administrator. The procedures, including, but not limited to, notice requirements, that apply to the appointment of a practice administrator for a deceased member shall apply to the petition brought under this section.

(23) If a member of the State Bar of California has transferred the economic interest of his or her practice to a trustee and if the member is a disabled member under Section 2468, a petition may be brought to appoint a practice administrator. The procedures, including, but not limited to, notice requirements, that apply to the appointment of a practice administrator for a disabled member shall apply to the petition brought under this section.

(c) The court may, on its own motion, set and give notice of an order to show cause why a trustee who is a professional fiduciary, and who is required to be licensed under Chapter 6 (commencing with Section 6500) of Division 3 of the Business and Professions Code, should not be removed for failing to hold a valid, unexpired, unsuspended license.

history: (History: Amended by Stats. 2010, Ch. 621, Sec. 11. (SB 202) Effective January 1, 2011.)

chapter: 3. Proceedings Concerning Trusts

path: 9. TRUST LAW > 5. JUDICIAL PROCEEDINGS CONCERNING TRUSTS > 3. Proceedings Concerning Trusts


text: All proceedings concerning the transfer of property of the trust shall be conducted pursuant to the provisions of Part 19 (commencing with Section 850) of Division 2.

history: (History: Repealed and added by Stats. 2001, Ch. 49, Sec. 7. Effective January 1, 2002.)