BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 367|
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CONSENT
Bill No: SB 367
Author: Harman (R)
Amended: 4/13/09
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 05/05/09
AYES: Corbett, Harman, Florez, Leno, Walters
SUBJECT : Trusts
SOURCE : Trust and Estates Section of the California
State Bar
DIGEST : This technical bill clarifies several provisions
of trust law. Specifically, the bill: (1) reconciles
differences between related sections of the Probate Code;
(2) closes a loophole that may permit evasion of the
required notice of trust administration; (3) clarifies that
late service of notice is nonetheless effective to trigger
the 120 day statute of limitations to file a trust contest;
and (4) clarifies provisions related to a trustee's
liability for failure to comply with the required notice of
trust administration and modify related provisions so that
beneficiaries and heirs are treated in the same manner.
This bill also declares that it is against public policy
for a trust instrument to waive the beneficiary's right to
information and access to records.
ANALYSIS : Existing law, Division 9 of the Probate Code
(Section 15000 et seq), governs the creation, validation,
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modification, termination, and administration of trusts,
and provides for the adjudication of disputes relating to
the trust. Existing law provides for the rights and
responsibilities of all parties to a trust, i.e., the
trustor, trustee, beneficiary, heir, and a third party such
as a creditor.
This bill:
1. Clarifies that a beneficiary may request a copy of the
"terms of the trust" when there is a change of trustee
(Sec. 16060.7).
2. Clarifies that a trustee can and should provide a
beneficiary with specific information the beneficiary
has reasonably requested concerning a trust, rather than
being compelled to provide a standard report containing
statutorily specified information that may be neither
relevant nor of interest to the requesting beneficiary
(Sec. 16061).
3. Distinguishes those situations in which a trustee is
obligated to provide a formal accounting from those
where the trustee is required to report only information
requested by a beneficiary (Sec. 16064).
4. Specifically requires a trustee to provide a beneficiary
an opportunity to review and copy trust records relevant
to the beneficiary's interest in the trust upon a
reasonable request (Sec. 16065).
5. Clarifies that the rights of a beneficiary to receive
information relevant to his or her interest in the trust
upon reasonable request, to obtain a copy of the terms
of the trust, and to review and copy trust records
relevant to the beneficiary's interest in the trust may
not be waived by the settlor in the trust instrument
(Secs. 16064 and 16068).
The bill makes other clarifying and conforming changes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
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SUPPORT : (Verified 5/7/09)
Trust and Estates Section of the California State Bar
(source)
ARGUMENTS IN SUPPORT : The Executive Committee of the
Trusts and Estates Section of the Bar (TEXCOM), states that
the purpose of this bill is to reduce disputes by bringing
clarity and certainty to the law describing the parties'
rights and obligations in the area of trustee
accountability. "The proposal is intended to reduce the
expense of trust administration by encouraging informal,
targeted and responsive replies to requests from
beneficiaries rather than superfluous or burdensome formal
reporting requirements. At the same time, [SB 367]
requires greater accountability from trustees, thereby
instilling greater confidence in beneficiaries,
discouraging actual breaches of trust by trustees, and
reducing needless litigation engendered by the unnecessary
fear and suspicion of beneficiaries that can result from a
lack of communication and information." (Letter from the
Trusts and Estates Section of the State Bar, dated April
28, 2009.)
RJG:nl 5/7/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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