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.
Trust AdministrationNotice of Proposed Action by Trustee
Section § 16500
This law allows trustees to notify interested parties about a proposed action they plan to take or decide not to take, which is related to certain management duties under specific chapters. This notice does not affect any other legal rights or remedies that parties may have if they disagree with the trustee's actions or decisions.
trustee notice proposed action trust management
Section § 16501
This section outlines the requirements for a trustee who decides to notify beneficiaries about a proposed action regarding the trust. The trustee must inform beneficiaries who currently receive income or would receive a distribution if the trust ended immediately. Notification isn't necessary if a beneficiary explicitly consents to the action in writing. If a beneficiary cannot be found despite reasonable efforts, no notice is required.
However, a trustee can't use notice for certain actions like approving trustee or attorney compensation, settling accounts, discharging the trustee, or transactions where the trustee or trustee’s attorney might have a conflict of interest, such as buying trust property.
(a)CA Probate Code § 16501(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)CA Probate Code § 16501(a)(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)CA Probate Code § 16501(a)(2) A beneficiary who would receive a distribution of principal if the trust were terminated at the time the notice is given.
(b)CA Probate Code § 16501(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)CA Probate Code § 16501(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)CA Probate Code § 16501(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)CA Probate Code § 16501(d)(1) Allowance of the trustee’s compensation.
(2)CA Probate Code § 16501(d)(2) Allowance of compensation of the attorney for the trustee.
(3)CA Probate Code § 16501(d)(3) Settlement of
accounts.
(4)CA Probate Code § 16501(d)(4) Discharge of the trustee.
(5)CA Probate Code § 16501(d)(5) Sale of property of the trust to the trustee or to the attorney for the trustee.
(6)CA Probate Code § 16501(d)(6) Exchange of property of the trust for property of the trustee or for property of the attorney for the trustee.
(7)CA Probate Code § 16501(d)(7) Grant of an option to purchase property of the trust to the trustee or to the attorney for the trustee.
(8)CA Probate Code § 16501(d)(8) Allowance, payment, or compromise of a claim of the trustee, or the attorney for the trustee, against the trust.
(9)CA Probate Code § 16501(d)(9) Compromise or settlement of a claim, action, or proceeding by the trust
against the trustee or against the attorney for the trust.
(10)CA Probate Code § 16501(d)(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.
trustee notice proposed action beneficiary rights
Section § 16502
This law requires a notice of proposed action to include specific information: the trustee's name and contact details, a contact person's phone and email for more info, a description and explanation of the action, a deadline for objections (at least 45 days from notice delivery), and the date the action can occur or become effective.
The notice of proposed action shall state that it is given pursuant to this section and shall include all of the following:
(a)CA Probate Code § 16502(a) The name, mailing address, and electronic address of the trustee.
(b)CA Probate Code § 16502(b) The name, telephone number, and electronic address of a person who may be contacted for additional information.
(c)CA Probate Code § 16502(c) A description of the action proposed to be taken and an explanation of the reasons for the action.
(d)CA Probate Code § 16502(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)CA Probate Code § 16502(e) The date on or after which the proposed action may be taken or is effective.
notice of proposed action trustee contact information objection deadline
Section § 16503
This law section outlines the process for beneficiaries to object to a trustee's proposed action. If a beneficiary wants to object, they must send a written objection to the trustee at the address specified in the notice within the stated time period. If the trustee doesn't receive any objections, they aren't liable for their actions related to that proposal. However, this doesn't apply to minors or incompetent adults unless the notice is given to their guardian or conservator.
If objections are received, either the trustee or an opposing beneficiary can ask the court to decide whether the action should proceed, be adjusted, or be stopped. The person objecting must show why the action shouldn't happen. If the trustee chooses not to proceed with the action, they must inform the beneficiaries and explain the decision. A beneficiary can also ask the court to require the action, but they need to prove it should happen.
(a)CA Probate Code § 16503(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)CA Probate Code § 16503(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)CA Probate Code § 16503(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)CA Probate Code § 16503(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.
beneficiary objection trustee proposed action written objection
