BILL NUMBER: SB 367	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 2, 2009
	AMENDED IN SENATE  APRIL 13, 2009

INTRODUCED BY   Senator  Harman   Negrete McLeod

    (   Principal coauthor:   Senator 
 Harman   ) 

                        FEBRUARY 25, 2009

    An act to amend Sections 16061, 16061.5, 16061.7,
16061.8, 16061.9, 16064, and 17200 of, and to add Sections 16060.7,
16068 and 16069 to, the Probate Code, relating to trusts. 
 An act to add Section 51.13 to the Civil Code, relating to
discrimination. 



	LEGISLATIVE COUNSEL'S DIGEST


   SB 367, as amended,  Harman   Negrete McLeod
 .  Trusts.   Discrimination.  
   The Unruh Civil Rights Act provides that all persons within the
jurisdiction of this state are free and equal, and no matter what
their sex, race, color, religion, ancestry, national origin,
disability, medical condition, marital status, or sexual orientation
are entitled to the full and equal accommodations, advantages,
facilities, privileges, or services in all business establishments of
every kind whatsoever.  
   This bill would provide that any discount or other benefit offered
or conferred on a customer by a business because the customer has
suffered the loss or reduction of employment would not be considered
an arbitrary discrimination in violation of that act.  
   (1) Existing law permits a person to make a revocable trust and
requires a trustee, to provide the beneficiary of the trust, upon
reasonable request, with a report relating to administration of the
trust relevant to the beneficiary's interest, including the terms of
the trust, except as specified.  
   This bill would clarify that the trustee, upon reasonable written
request, is required to provide the beneficiary with the terms of the
trust. The bill would also require the trustee to report to the
beneficiary by providing requested information and the records of the
trust's administration.  
   (2) Existing law requires the trustee to provide a copy of the
trust to any trust beneficiary, among others, under certain
circumstances, including when a revocable trust or any portion of a
revocable trust becomes irrevocable because of the death of one or
more of the settlors of the trust. Existing law requires a trustee to
serve a notification of trust administration on beneficiaries,
heirs, and the Attorney General, if the trust is charitable and
subject to supervision by the Attorney General.  
   This bill would revise these provisions to clarify to whom and
when a trustee must provide a true and complete copy of the trust,
including to a trust beneficiary who requests it whenever there is a
change of an irrevocable trust and to the Attorney General, as
specified. The bill would also require that the notification of trust
administration be served when a power of appointment retained by the
settlor is effective or lapses, as specified.  
   (3) Existing law limits the time period within which an action may
be brought to contest a trust to no more than 120 days from the date
the notification by the trustee is served upon him or her, or 60
days from the day on which a copy of the terms of the trust is mailed
or personally delivered to him or her during that 120-day period,
whichever is later.  
   This bill would provide that the 120-day statute of limitation
runs whether or not the notice is served within or after a specified
time.  
   (4) Existing law provides that a trustee who fails to serve the
notification by trustee, as described above, on a beneficiary is
responsible for all damages, attorney's fees, and costs caused by the
failure unless the trustee makes a reasonably diligent effort to
comply with that section. Existing law provides that a trustee who
fails to serve the notification by trustee, as described above, on an
heir who is not a beneficiary and whose identity is known to the
trustee is responsible for all damages caused to the heir by the
failure unless the trustee shows that the trustee made a reasonably
diligent effort, as specified.  
   This bill would provide that the liability for failure to file the
trustee notification is to be established pursuant to the same
provisions for both beneficiaries and heirs. The bill would provide
that attorney's fees are recoverable only as damages. 

   (5) Existing law provides that a trustee is not required to report
information or account to a beneficiary in certain circumstances,
including when the trust instrument waives the report or account,
except as specified.  
   The bill would specify that this right of inspection includes the
right to make copies at the expense of the beneficiary, and would
provide that specified waivers of a trustee's obligation to provide
information and records are against public policy and void. The bill
would permit a court, regardless of a waiver of accounting of a
beneficiary, to compel the trustee to account upon a showing that it
is reasonably likely that material breach of the trust has occurred.
The bill would make conforming changes with regard to the authority
of a beneficiary to petition the court concerning the internal
affairs of the trust. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 51.13 is added to the 
 Civil Code   , to read:  
   51.13.  Any discount or other benefit offered or conferred on a
customer by a business because the customer has suffered the loss or
reduction of employment shall not be considered an arbitrary
discrimination in violation of Section 51.  
  SECTION 1.    Section 16060.7 is added to the
Probate Code, to read:
   16060.7.  On written request by a beneficiary, the trustee shall
provide the terms of the trust to the beneficiary, provided that the
trustee is not required to provide the terms of the trust to the
beneficiary in any of the circumstances described in Section 16069.
 
  SEC. 2.    Section 16061 of the Probate Code is
amended to read:
   16061.  Except as provided in Section 16069, on reasonable written
request by a beneficiary, the trustee shall report to the
beneficiary by providing requested information and records to the
beneficiary relating to the administration of the trust relevant to
the beneficiary's interest.  
  SEC. 3.    Section 16061.5 of the Probate Code is
amended to read:
   16061.5.  (a) A trustee shall provide a true and complete copy of
the terms of the irrevocable trust, or irrevocable portion of the
trust, to each of the following:
   (1) Any beneficiary of the trust who requests it, and to any heir
of a deceased settlor who requests it, when a revocable trust or any
portion of a revocable trust becomes irrevocable because of the death
of one or more of the settlors of the trust, when a power of
appointment is effective or lapses upon the death of a settlor under
the circumstances described in paragraph (3) of subdivision (a) of
Section 16061.7, or because, by the express terms of the trust, the
trust becomes irrevocable within one year of the death of a settlor
because of a contingency related to the death of one or more of the
settlors of the trust.
   (2) Any beneficiary of the trust who requests it, whenever there
is a change of trustee of an irrevocable trust.
   (3) If the trust is a charitable trust subject to the supervision
of the Attorney General, to the Attorney General, if requested, when
a revocable trust or any portion of a revocable trust becomes
irrevocable because of the death of one or more of the settlors of
the trust, when a power of appointment is effective or lapses upon
the death of a settlor under the circumstances described in paragraph
(3) of subdivision (a) of Section 16061.7, or because, by the
express terms of the trust, the trust becomes irrevocable within one
year of the death of a settlor because of a contingency related to
the death of one or more of the settlors of the trust, and whenever
there is a change of trustee of an irrevocable trust.
   (b) The trustee shall, for purposes of this section, rely upon any
final judicial determination of heirship. However, the trustee shall
have discretion to make a good faith determination by any reasonable
means of the heirs of a deceased settlor in the absence of a final
judicial determination of heirship known to the trustee. 

  SEC. 4.    Section 16061.7 of the Probate Code is
amended to read:
   16061.7.  (a) A trustee shall serve a notification by the trustee
as described in this section in the following events:
   (1) When a revocable trust or any portion thereof becomes
irrevocable because of the death of one or more of the settlors of
the trust, or because, by the express terms of the trust, the trust
becomes irrevocable within one year of the death of a settlor because
of a contingency related to the death of one or more of the settlors
of the trust.
   (2) Whenever there is a change of trustee of an irrevocable trust.
The duty to serve the notification by the trustee is the duty of the
continuing or successor trustee, and any one cotrustee may serve the
notification.
   (3) Whenever a power of appointment retained by a settlor is
effective or lapses upon the death of the settlor with respect to an
inter vivos trust which was, or was purported to be, irrevocable upon
its creation. The duty to serve the notification by the trustee is
the duty of the continuing or successor trustee, and any one
cotrustee may serve the notification.
   (b) The notification by the trustee required by subdivision (a)
shall be served on each of the following:
   (1) Each beneficiary of the irrevocable trust or irrevocable
portion of the trust, subject to the limitations of Section 15804.
   (2) Each heir of the deceased settlor, if the event that requires
notification is the death of a settlor or irrevocability within one
year of the death of the settlor of the trust by the express terms of
the trust because of a contingency related to the death of a
settlor.
   (3) If the trust is a charitable trust subject to the supervision
of the Attorney General, to the Attorney General.
   (c) A trustee shall, for purposes of this section, rely upon any
final judicial determination of heirship, known to the trustee, but
the trustee shall have discretion to make a good faith determination
by any reasonable means of the heirs of a deceased settlor in the
absence of a final judicial determination of heirship known to the
trustee.
   (d) The trustee need not provide a copy of the notification by
trustee to any beneficiary or heir (1) known to the trustee but who
cannot be located by the trustee after reasonable diligence or (2)
unknown to the trustee.
   (e) The notification by trustee shall be served by mail to the
last known address, pursuant to Section 1215, or by personal
delivery.
   (f) The notification by trustee shall be served not later than 60
days following the occurrence of the event requiring service of the
notification by trustee, or 60 days after the trustee became aware of
the existence of a person entitled to receive notification by
trustee, if that person was not known to the trustee on the
occurrence of the event requiring service of the notification. If
there is a vacancy in the office of the trustee on the date of the
occurrence of the event requiring service of the notification by
trustee, or if that event causes a vacancy, then the 60-day period
for service of the notification by trustee commences on the date the
new trustee commences to serve as trustee.
   (g) The notification by trustee shall contain the following
information:
   (1) The identity of the settlor or settlors of the trust and the
date of execution of the trust instrument.
   (2) The name, mailing address and telephone number of each trustee
of the trust.
   (3) The address of the physical location where the principal place
of administration of the trust is located, pursuant to Section
17002.
   (4) Any additional information that may be expressly required by
the terms of the trust instrument.
   (5) A notification that the recipient is entitled, upon reasonable
request to the trustee, to receive from the trustee a true and
complete copy of the terms of the trust.
   (h) If the notification by the trustee is served because a
revocable trust or any portion of it has become irrevocable because
of the death of one or more settlors of the trust, or because, by the
express terms of the trust, the trust becomes irrevocable within one
year of the death of a settlor because of a contingency related to
the death of one or more of the settlors of the trust, the
notification by the trustee shall also include a warning, set out in
a separate paragraph in not less than 10-point boldface type, or a
reasonable equivalent thereof, that states as follows:
   "You may not bring an action to contest the trust more than 120
days from the date this notification by the trustee is served upon
you or 60 days from the date on which a copy of the terms of the
trust is mailed or personally delivered to you during that 120-day
period, whichever is later."
   (i) Any waiver by a settlor of the requirement of serving the
notification by trustee required by this section is against public
policy and shall be void.
   (j) A trustee may serve a notification by trustee in the form
required by this section on any person in addition to those on whom
the notification by trustee is required to be served. A trustee is
not liable to any person for serving or for not serving the notice on
any person in addition to those on whom the notice is required to be
served. A trustee is not required to serve a notification by trustee
if the event that otherwise requires service of the notification by
trustee occurs before January 1, 1998.  
  SEC. 5.    Section 16061.8 of the Probate Code is
amended to read:
   16061.8.  Regardless of whether the notice is served within or
after the time period set forth in subdivision (f) of Section
16061.7, no person upon whom the notification by the trustee is
served pursuant to this chapter may bring an action to contest the
trust more than 120 days from the date the notification by the
trustee is served upon him or her, or 60 days from the day on which a
copy of the terms of the trust is mailed or personally delivered to
him or her during that 120-day period, whichever is later. 

  SEC. 6.    Section 16061.9 of the Probate Code is
amended to read:
   16061.9.  (a) Except as provided in subdivision (b), a trustee who
fails to comply with Section 16061.7 shall be responsible for all
damages caused by the failure including, but not limited to,
reasonable attorney's fees and costs incurred by or on behalf of the
beneficiary or heir.
   (b) (1) The trustee's exercise of reasonable diligence in
ascertaining the identity and mailing address of the beneficiary or
heir and otherwise complying with Section 16061.7 shall constitute a
complete defense to any action based on the beneficiary's or heir's
failure to receive the notification as required by Section 16061.7.
   (2) For purposes of this subdivision, "reasonable diligence"
includes either of the following:
   (A) Notice by first class mail to the beneficiary or heir at the
beneficiary's or heir's last mailing address actually known to the
trustee if the notice has not been returned to the trustee as
undelivered mail within 30 business days of mailing.
   (B) If the notice is returned as undelivered mail within 30
business days of mailing or if the trustee does not have a last
mailing address for the beneficiary or heir, retention by the trustee
of an investigative service at the expense of the trust.
   (c) A trustee, in exercising discretion with respect to the timing
and nature of distributions of trust assets, may consider the fact
that the period in which a beneficiary or heir could bring an action
to contest the trust has not expired.  
  SEC. 7.    Section 16064 of the Probate Code is
amended to read:
   16064.  The trustee is not required to account to a beneficiary,
as described in subdivision (a) of Section 16062, in any of the
following circumstances:
   (a) To the extent the trust instrument waives the account, except
that no waiver described in subdivision (e) of Section 16062 shall be
valid or enforceable. Regardless of a waiver of accounting in the
trust instrument, upon a showing that it is reasonably likely that a
material breach of the trust has occurred, the court may compel the
trustee to account.
   (b) As to a beneficiary who has waived in writing the right to an
account. A waiver of rights under this subdivision may be withdrawn
in writing at any time as to future accounts. Regardless of a waiver
of accounting by a beneficiary, upon a showing that it is reasonably
likely that a material breach of the trust has occurred, the court
may compel the trustee to account.
   (c) In any of the circumstances set forth in Section 16069.
 
  SEC. 9.    Section 16068 is added to the Probate
Code, to read:
   16068.  Any waiver by a settlor of the obligation of the trustee
of either of the following is against public policy and shall be
void:
   (a) To provide the terms of the trust to the beneficiary as
required by Section 16060.7.
   (b) To provide requested information and records to the
beneficiary as required by Section 16061.  
  SEC. 10.    Section 16069 is added to the Probate
Code, to read:
   16069.  The trustee is not required to account to a beneficiary,
provide the terms of the trust to a beneficiary or to provide
requested information and records to the beneficiary pursuant to
Section 16051, in any of the following circumstances:
   (a) In the case of a beneficiary of a revocable trust, as provided
in Section 15800, for the period when the trust may be revoked.
   (b) If the beneficiary and the trustee are the same person.
 
  SEC. 11.    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 do any of the following:
   (A) Provide a copy of the terms of the trust.
   (B) Provide information and records about the trust under Section
16061 if the trustee has failed to provide the requested information
and records within 60 days after the beneficiary's reasonable written
request, and the beneficiary has not received the requested
information and records from the trustee within the six months
preceding the request.
   (C) Account to the beneficiary, subject to the limitations of
Section 16064 if the trustee has failed to submit a requested account
within 60 days after written request of the beneficiary and no
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.