What is a Notice of Proposed Action under California Law?
A Notice of Proposed Action is sent by a California trustee or personal representative who wants to take some action that may affect the rights of beneficiaries. The Notice of Proposed Action requires the beneficiary to make any objections within a short window of time – sometimes as little as 15 days – or lose their right to sue later. Essentially, a Notice of Proposed Action is telling the beneficiaries to “speak now or forever hold their peace.”
When should a personal representative send a Notice of Proposed Action in a California Estate?
The personal representative of a California probate estate should send a Notice of Proposed Action when it is required by California statutes, or to prevent beneficiaries from suing later. Personal Representatives should use the approved Judicial Council of California Form DE-165 to provide the required notice. California Probate Code Section 10580 gives the rules for when a Personal Representative should give notice of a proposed action:
10580
(a) A personal representative who has been granted authority to administer the estate under this part shall give notice of proposed action as provided in this chapter prior to the taking of the proposed action without court supervision if the provision of Chapter 3 (commencing with Section 10500) giving the personal representative the power to take the action so requires. Nothing in this subdivision authorizes a personal representative to take an action under this part if the personal representative does not have the power to take the action under this part.
(b) A personal representative who has been granted authority to administer the estate under this part may give notice of proposed action as provided in this chapter even if the provision of Chapter 3 (commencing with Section 10500) giving the personal representative the power to take the action permits the personal representative to take the action without giving notice of proposed action. Nothing in this subdivision requires the personal representative to give notice of proposed action where not required under subdivision (a) or authorizes a personal representative to take any action that the personal representative is not otherwise authorized to take.
Note that Section 10580(b) essentially says that even if the Personal Representative is not required to send a Notice of Proposed Action they may still do so if they want to protect themselves from a beneficiary who might later object. Also, the Personal Representative does not need to send a Notice of Proposed Action to any person who consents in writing or waives the right to notice of a proposed action.
When should a trustee send a Notice of Proposed Action for a California Trust?
A trustee of a California should send a Notice of Proposed Action anytime they want to protect themselves from being sued by beneficiaries who may later object to the proposed action. Unlike with personal representatives, a trustee is never required to send a notice of a proposed action to beneficiaries. Probate Code Section 16504. However, the California Probate Codes does allow a trustee to give at least 45 days prior notice of a proposed action. If the beneficiary does not object within the required notice period, they are not able to sue the trustee later for taking that action. Trustees should consider sending notice to beneficiaries of proposed actions that may impact their rights.
For example, a trustee of a California testamentary trust might mail a Notice of Proposed Action to the beneficiaries that they intend to sell a house held by the trust for $800,000. After waiting the required 45 days, the trustee can move forward with listing the property for sale at $800,000 without risk of being held liable to the trust or beneficiaries for selling the property below market price.
Who should receive a Notice of Proposed Action from a Personal Representative of a California Estate?
California Probate Code Section 10581 provides the rules for who should receive a Notice of Proposed Action from a personal representative of a California estate, as follows:
10581. Except as provided in Sections 10582 and 10583, notice of proposed action shall be giving to all of the following:
(a) Each known devisee whose interest in the estate would be affected by the proposed action.
(b) Each known heir whose interest in the estate would be affected by the proposed action.
(c) Each person who has filed a request under Chapter 6 (commencing with Section 1250) of Part 2, of Division 3 for special notice of petitions filed in the administration proceeding.
(d) The Attorney General, at the office of the Attorney General in Sacramento, if any portion of the estate is to escheat to the state and its interest in the estate would be affected by the proposed action.
The court can remove a personal representative who fails to give notice of a proposed action that is required by California statute. Also, any person who was entitled to receive notice of a proposed action could object at any time to the action if the personal representative failed to send the required notice.
Who should receive a Notice of Proposed Action for a California Trust?
California Probate Code Section 16501 (a), (b), and (c) provides the rules for who should receive a Notice of Proposed Action from a trustee, as follows:
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) 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.
The notice should provide a description of the action proposed to be taken and an explanation of the reasons for the action, contact information for the recipient to get more information, as well as the time within which objections to the proposed action may be made. The time for objections must be at least 45 days from the delivery of the Notice of Proposed Action.
A trustee is not required to provide a Notice of Proposed Action, but it is often a good idea to do so to prevent expensive and unnecessary disputes with beneficiaries later.
Can I object to a Notice of Proposed Action for a California Probate Estate?
Yes, you can object to the trustee’s proposed action that is described in the notice. Probate Code Section 10587 states as follows:
10587.
(a) Any person entitled to notice of proposed action under Section 10581 may object to the proposed action as provided in this section.
(b) The objection to the proposed action is made by delivering pursuant to Section 1215 a written objection to the proposed action to the personal representative at the address stated in the notice of proposed action. The person objecting to the proposed action either may use the Judicial Council form or may make the objection in any other writing that identifies the proposed action with reasonable certainty and indicates that the person objects to the taking of the proposed action.
(c) The personal representative is deemed to have notice of the objection to the proposed action if it is delivered or received at the address stated in the notice of proposed action before whichever of the following times is the later:
(1) The date specified in the notice of proposed action on or after which the proposed action is to be taken.
(2) The date the proposed action is actually taken.
The time to object to the proposed can be as little as 15 days, but the person who receives notice can object at any time before the personal representative takes the proposed action. California law also permits beneficiaries to seek a restraining order from the court to prevent the personal representative from taking the proposed action without court supervision. California Probate Code Section 10588 makes it fairly simple to get such a restraining order, stating that “The court shall grant the requested order without requiring notice to the personal representative and without cause being shown for the order.”
If you fail to make an objection or obtain a restraining order before the personal representative takes the proposed action you will waive your right to have the court review the personal representative’s proposed action. If you want to object to a proposed action by the personal representative of a California estate, you should consult with a California probate litigation attorney to discuss your options.
What happens if I ignore a Notice of Proposed Action for a California Probate Estate?
If you ignore a Notice of Proposed Action from a personal representative of a California estate, you may waive your right to have the court review the personal representative’s proposed action. If you want to object to a proposed action by the personal representative of a California estate, you should consult with a California probate litigation attorney to discuss your options.
Can I object to a Notice of a Proposed Action from a Trustee in California?
Yes, you can object to the trustee’s proposed action that is described in the notice. California Probate Code Section 16503 states as follows:
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) 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.
The time to object can be as little as 45 days, and if you do formally object in that time you lose your right to object later. Once a beneficiary provides notice to the trustee of your objection, either the beneficiary or the trustee may petition the court to decide whether the trustee can take the action proposed in the notice. If you want to object to a proposed action by the trustee of a California trust, you should consult with a California trust litigation attorney to discuss your options.
What happens if I ignore a Notice of Proposed Action for a California Trust?
If you to ignore the Notice of Proposed Action from a trustee, under California law you may be waiving your right to object to the trustee’s proposed action later. If you want to object to a proposed action by the trustee of a California trust, you should consult with a California trust litigation attorney to discuss your options.
