BILL NUMBER: SB 294 CHAPTERED 09/30/03 CHAPTER 629 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2003 APPROVED BY GOVERNOR SEPTEMBER 30, 2003 PASSED THE SENATE SEPTEMBER 11, 2003 PASSED THE ASSEMBLY SEPTEMBER 10, 2003 AMENDED IN ASSEMBLY SEPTEMBER 9, 2003 AMENDED IN ASSEMBLY AUGUST 28, 2003 AMENDED IN ASSEMBLY JULY 21, 2003 AMENDED IN ASSEMBLY JUNE 26, 2003 AMENDED IN SENATE MAY 20, 2003 AMENDED IN SENATE MAY 6, 2003 AMENDED IN SENATE APRIL 22, 2003 INTRODUCED BY Senator Soto FEBRUARY 19, 2003 An act to amend Sections 2850, 2851, 2852, 2853, 2854, 2855, and 17200 of, and to repeal Section 2856 of, the Probate Code, relating to conservators, guardians, and trustees. LEGISLATIVE COUNSEL'S DIGEST SB 294, Soto. Statewide Registry: conservators, guardians, and trustees. (1) Under existing law, the Department of Justice is required to maintain a Statewide Registry of conservators, guardians, and trustees. Conservators and guardians are required to register, except as specified. Trustees may register if they so desire, but are not required to register. Violation of certain registration provisions is a misdemeanor, punishable as specified, and violation of other registration provisions may result in civil penalties payable to the General Fund. This bill would, with certain exceptions, require trustees to register with the Statewide Registry on or before January 1, 2005, or be removed as trustee by the court; and would make conforming changes. The bill would impose a state-mandated local program by expanding the definition of a crime. The bill would also prohibit the consideration of anonymous complaints against a conservator, guardian, or trustee, and revise provisions governing exemptions from the registration provisions for specified persons acting as a conservator, guardian, or trustee, and specify that information in the Statewide Registry is confidential. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 2850 of the Probate Code is amended to read: 2850. (a) The Department of Justice shall maintain a Statewide Registry and shall make all information in the registry available to the court for any purpose, but shall otherwise be kept confidential. On request, the registry may disclose to the public whether an individual is or is not registered with the Statewide Registry. Except as otherwise provided in Section 2854, all persons who wish to serve as a conservator, guardian, or trustee or who are currently serving as a conservator, guardian, or trustee shall register with the Statewide Registry and shall reregister every three years thereafter. "Registration" means the filing of a declaration pursuant to subdivision (b). (b) All conservators, guardians, and trustees required to file information with the clerk of the court pursuant to Section 2340 or required to register pursuant to this chapter shall file a signed declaration with the Statewide Registry. A person who signs a declaration pursuant to this subdivision asserting the truth of any material matter which he or she knows to be false is guilty of a misdemeanor punishable by imprisonment for up to one year in a county jail, or a fine of not more than two thousand dollars ($2,000), or both that fine and imprisonment. The declaration shall contain the following information: (1) Full name. (2) Professional name, if different from (1). (3) Business address. (4) Business telephone number or numbers. (5) His or her educational background and professional experience, including verification of any college or graduate degree claimed. (6) The names of the conservator's current conservatees, the guardian's current wards, or the current trusts administered by the trustee. (7) The aggregate dollar value of all assets currently under the conservator's, guardian's, or trustee's supervision. (8) Whether he or she has ever been removed for cause or resigned as conservator, guardian, or trustee in a specific case, the circumstances of that removal or resignation, and the case names, court locations, and case numbers. (c) On request, the registry may disclose to a member of the public the educational background and professional experience of a conservator, guardian, or trustee registered with the Statewide Registry. (d) The Department of Justice may charge a reasonable fee to persons registering and re-registering with the Statewide Registry for the cost of that registration. The Department of Justice shall issue a certificate of registration to each registrant. (e) Each court clerk shall forward a copy of any complaint filed with that court, and found to be meritorious by that court, against a conservator, guardian, or trustee in his or her capacity as a conservator, guardian, or trustee for inclusion in the Statewide Registry. The Statewide Registry shall place any copies of those complaints in the file of that conservator, guardian, or trustee. No anonymous complaint may be considered pursuant to this section. SEC. 2. Section 2851 of the Probate Code is amended to read: 2851. (a) A court may not appoint a person as a conservator, guardian, or trustee unless that person, if required to register under Section 2850, is registered with the Statewide Registry. (b) Any person serving as a conservator or guardian prior to January 1, 2000, who does not register with the Statewide Registry by either January 1, 2001, or by the date of the next required review pursuant to Section 1850, whichever is sooner, shall be removed as a conservator or guardian by the court. A trustee required to register under Section 2850 who has not registered with the Statewide Registry on or before January 1, 2005, shall be removed as a trustee by the court. (c) In appointing, continuing the appointment, or removing a person as conservator, guardian, or trustee, the court shall examine and consider the information contained in the Statewide Registry for that person. The information contained in the Statewide Registry shall be made available to the court for this purpose, but shall otherwise be kept confidential, except as provided by law. SEC. 3. Section 2852 of the Probate Code is amended to read: 2852. (a) Any person required to register under Section 2850 who serves as a conservator, guardian, or trustee without being registered with the Statewide Registry, who commits fraud in registering, who falsely asserts that he or she is registered, or who makes false claims or representations as to the nature of his or her file contained in the registry, shall be subject to a civil penalty in the amount of two hundred dollars ($200) for the first violation and a civil penalty in the amount of five hundred dollars ($500) for each subsequent violation, to be assessed and collected in a civil action brought by the Department of Justice. All civil penalties collected shall be deposited in the General Fund. A person who lawfully delays registration pursuant to subdivision (b) of Section 2851 shall not be subject to a civil penalty for serving as a conservator, guardian, or trustee without being registered until the time that subdivision (b) of Section 2851 authorizes his or her removal for failure to register. (b) Any court that removes a conservator, guardian, or trustee for cause, and any court that has accepted the resignation of a conservator, guardian, or trustee, shall notify the Statewide Registry of that removal or resignation and the reason therefor. The courts shall consider that information prior to the appointment of a person or entity pursuant to a subsequent petition for appointment as conservator, guardian, or trustee. SEC. 4. Section 2853 of the Probate Code is amended to read: 2853. Notwithstanding any other provision of this chapter, in cases of urgency, where circumstances and justice warrant the appointment of a conservator, guardian, or trustee and time is limited, a court may appoint a person as conservator, guardian, or trustee without consulting the Statewide Registry or requiring registration prior to appointment. SEC. 5. Section 2854 of the Probate Code is amended to read: 2854. (a) This chapter does not apply to any public conservator, public guardian, or to any conservator, guardian, or trustee who is related to the conservatee, ward, trustor, or vested beneficiary by blood, marriage, or adoption. This chapter does not apply to a trustee who administers less than six trusts at the same time. This chapter does not apply to any conservator or guardian who is not required to file information with the clerk of the court pursuant to Section 2340, to any person or entity subject to the oversight of a local government, including an employee of a city, county, or city and county, or to any person or entity subject to the oversight of the state or federal government, including an attorney licensed to practice law in the State of California who acts as trustee of only attorney client trust accounts, as defined in Section 6211 of the Business and Professions Code. (b) This chapter does not apply to any conservator who resided in the same home with the conservatee immediately prior to the condition or event that gave rise to the necessity of a conservatorship. This subdivision does not create any order or preference of appointment, but simply exempts a conservator described by this subdivision from registration. (c) This chapter does not apply to a nonrelated guardian of the person of a minor appointed by the court as the result of the selection of a permanency plan for a dependent child or ward pursuant to Section 366.26 of the Welfare and Institutions Code. It also does not include a nonrelated guardian of the person of a minor appointed pursuant to Section 1514 if that child is in receipt of AFDC-FC payments and case management services from the county welfare department, as evidenced by a Notice of Action of AFDC-FC eligibility. (d) This chapter does not apply to a trustee who is any of the following: (1) Trust companies, as defined in Section 83. (2) FDIC insured institutions, their holding companies, subsidiaries or affiliates. For the purposes of this paragraph, "affiliate" means any entity that shares an ownership interest with or that is under the common control of, the FDIC insured institution. (3) Employees of any entity listed in paragraph (1) or (2) while serving as trustees in the scope of their duties. SEC. 6. Section 2855 of the Probate Code is amended to read: 2855. It is the intent of the Legislature that both: (a) Counties that provide for registration of conservators, guardians, or trustees continue to do so, and that the Statewide Registry not replace county registration. (b) Courts maintain oversight over the complaint process in order to safeguard the reputations of conservators, guardians, and trustees against unfounded complaints. (c) A conservator, guardian, or trustee who is reregistering with the Statewide Registry, after having met all the requirements stated in Section 2850, not be required to reverify previously claimed college or graduate degrees. SEC. 7. Section 2856 of the Probate Code is repealed. SEC. 8. Section 17200 of the Probate Code is amended to read: 17200. (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 report information about the trust or account to the beneficiary, if (A) the trustee has failed to submit a requested report or account within 60 days after written request of the beneficiary and (B) no report or 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 should not be removed for failing to register in the Statewide Registry under Section 2850. SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.