Payment of Claims, Debts, and Expenses From Revocable Trust of Deceased SettlorGeneral Provisions
Section § 19000
This section explains specific terms related to claims and trusts when a person who could change a trust dies. A 'claim' refers to requests for payment like the deceased's liabilities or funeral costs, excluding disputes over property titles. A 'creditor' is someone who has a claim against trust assets. A 'trust' is defined here as one that could have been altered by the deceased. 'Debts' are all claims and administration costs against the trust, including taxes. 'Probate estate' is the estate managed under specified legal rules, while a 'trust estate' is the deceased's property managed by the trust's trustee.
Section § 19001
When someone who created a trust (the settlor) dies, any property they could have revoked at the time of their death is used to pay off their debts and the costs to administer their estate, if the estate itself doesn't have enough to cover these costs. The settlor can specify in the trust document how debts should be paid, but they can't change the order of payment for certain priority expenses, which are outlined in another section of the law.
Section § 19002
This law section states that creditors can still claim against a revocable trust set up by a deceased person, unless there's a specific rule that says otherwise.
Additionally, this law doesn't change any existing procedures for handling claims against an estate, as detailed in another section of the law.
Section § 19003
If someone who created a trust (the settlor) passes away, the trustee (who manages the trust) can notify creditors about claims against the trust, as long as they haven't been told of a probate proceeding. The trustee must file a notice with the court where the settlor lived or where the trust's property is located. They'll then publish and serve this notice to creditors according to specific legal guidelines to inform them of their rights and obligations. This ensures that creditors know how to make their claims.
Additionally, this doesn't change any requirements for notifying public entities about claims or requests.
Section § 19004
This section explains that if a trustee follows the proper steps for notifying potential claimants against a trust, then certain rules apply. First, any claims against the trust must be filed correctly and within a specific time period. If a claim isn't filed as required, it cannot be collected from the trust's assets. Furthermore, anyone with a claim must file it before they can take legal action against the trust to recover the claim.
Section § 19005
This law gives the trustee the power to handle claims made against someone who has died. The trustee can pay the claim, reject it, argue against it, or settle it through negotiation or arbitration. If needed, the trustee can also use a formal process described in another section to resolve any disputes about the claim.
Section § 19006
This law deals with what happens to a deceased person's debts when they had a trust. Section 19006 states that if a trustee of a deceased person's trust follows certain procedures to notify creditors, then other trusts set up by the deceased and their trustees and beneficiaries get protected from creditors too.
If the personal representative handling the deceased's will does a similar notification, they also get creditor protection for the trustees and beneficiaries of the trusts. Furthermore, if a probate process starts after the trustee files notices, the trustee can reclaim debt payments made from the trust assets if those debts should have been paid by the estate undergoing probate.
Section § 19007
This law says that if a person who created a trust (settlor) has multiple trusts, these trusts are generally not responsible for each other’s debts. However, a trustee of one trust can challenge this if they follow a specific process: filing, publishing, and serving a notice. Then, they can ask the court to decide how the debts should be shared between the trusts.
Section § 19008
If no one is handling the deceased person's estate through probate, and the trustee doesn't notify creditors via a proposed notice or publish a notice, the trust's responsibility to pay the deceased person's debts will be determined by other laws.
Section § 19009
This law states that a trust's existence or its details can't be disclosed to creditors or beneficiaries unless they have a specific right to know that information. Essentially, it protects the privacy of trust details unless the law or the terms of the trust grant access.
Section § 19010
This law states that a trustee isn't required to start a notice proceeding as described in Section 19003. It also makes clear that the trustee won't be held responsible if they don't start the process.
Section § 19011
The Judicial Council can decide what the petition, notice, claim form, and allowance or rejection form should look like and include. The allowance or rejection of a claim might be part of the claim form itself.
The claim form must let the creditor know that the claim needs to be filed with the court and a copy sent to the trustee under Section 1215. The form should also have a section for the claimant to confirm that they delivered a copy to the trustee.
Section § 19012
This law states that if a person who created a trust (a settlor) dies on or after January 1, 1992, then any claims made against them are handled according to the regulations in place after that date. If the settlor passed away before January 1, 1992, however, claims are dealt with under the rules that were in effect before then.