When Can Courts Exercise Authority Over “Internal Affairs” of a Trust?
PROBATE COURTS HAVE EXCLUSIVE JURISDICTION OVER THE INTERNAL AFFAIRS OF CALIFORNIA INTER VIVOS TRUSTS
When an issue, dispute, or matter relates to the “internal affairs” of a California inter vivos trust, the California Probate Courts have exclusive jurisdiction over the proceedings.
“Exclusive jurisdiction” means that only the probate court has the right to resolve these issues. The matter cannot be resolved in the Superior Court or other civil courts (including the courts of another state). If proceedings are filed in another court, the matter customarily will (and should) be transferred to the appropriate Probate Court for hearing (or dismissed, with instructions to file in the proper court).
WHAT ARE THE “INTERNAL AFFAIRS” OF A TRUST?
The California Probate Code, which governs California trusts and estates, contains a nonexclusive list of “internal trust affairs” over which California probate courts have jurisdiction. However, the list, which appears in Probate Code §17200(b), offers fairly extensive guidance, and includes:
- Questions about interpretation of the trust, including:
- The existence or nonexistence of any immunity, power, privilege, duty, or right
- The validity of the trust provisions
- Determining the beneficiaries, and the persons or entities to whom trust assets will pass or be delivered upon termination of the trust (if not made in the trust documents)
- Settling accounts, and evaluating the acts of the trustee, including exercises of discretionary powers
- Giving instructions or orders to the trustee, including orders to:
- Provide a copy of the terms of the trust
- Provide information about the trust if the trustee has failed to do so when requested (by someone with authority to make the request) or required by law
- Give an accounting to the beneficiaries, where required to do so
- Granting new powers to, or confirming the powers of, the trustee
- Establishing, reviewing, or allowing payment of the trustee’s compensation
- Appointment, removal, or accepting the resignation of a trustee
- Resolving of a breach of the trust (or fiduciary duty of the Trustee) by any available methods
- Approving or requiring modification or termination of the trust, and/or combination or division of the trust
- Amending the trust agreement or related documents as necessary to permit the trust (or decedent’s estate) to qualify for certain tax deductions
- Approving or requiring transfers of trusts or trust assets between jurisdictions (including outside California/the U.S.)
- Ending ongoing court supervision of a trust
- Determining the trust’s liability for debts of a deceased settlor (where appropriate, and with limitations imposed by law)
- Evaluation and determination of certain trust rights, obligations, and liabilities with regard to the trust’s interactions with lawyers
As mentioned above, this list is not exhaustive. The court can exercise jurisdiction over a trust, and the trustee, in any appropriate circumstances that involve the internal affairs, administration, and operation of the trust–and a trustee can request assistance and instructions from the court at almost any time, where doubt or uncertainty exists, or even where the trustee simply wants to obtain advance approval of a decision.
Like many legal matters, the answers to legal questions in this area generally must be determined on a “facts and circumstances” basis; if you would like a court to take supervision over a trust, or believe it should do so, contact an attorney promptly for an evaluation of your legal rights. If you are the trustee of a trust, and would like to obtain instructions from a court, you also should contact a lawyer for assistance.
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Disclaimer: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR OR ROSS LAW AND ANY PERSON. Your legal rights and experiences may vary. Never use an online article (including this one) to evaluate your legal rights or claims. Consult an experienced attorney promptly to obtain a personalized evaluation of your claims, potential damages, and the various legal rights and options available to you.
You may lose or compromise your rights if you delay in consulting legal counsel. Most legal claims (and defenses), as well as legal and court procedures, are complicated and fact-dependent. If you believe you have a claim against someone who injured you, a lawyer who represented you in a previous lawsuit, or any other legal claim, consult an experienced lawyer immediately for an evaluation of your individual rights and claims.
