trustee Archives

Can a trustee file a partition action? (Prob. Code § 16226.)

Published on: November 11, 2024 | By Underwood Law Firm, P.C.

underwood-trustee-partition-action-300x300 A trust set up for property gives beneficiaries a right to the property once the settlor has passed away. This means beneficiaries may become co-owners. However, the trustee may also hold an interest in the property as well. If the trustee is a co-owner of the property, they can file a partition suit. This is important if you are interested in filing a partition suit either as a trustee or co-owner of a property where the trustee holds an interest.

How can a trustee hold an interest in the property?

The trustor creates the trust and places the asset or property into the trust to be held and transferred. The benefit of the trust will be passed to the beneficiaries upon death. These beneficiaries receive the assets like property once certain conditions occur. For example, following the death of the trustor. The trustee will manage the trust and ensure it is carried out according to the trustor’s wishes. A trustee can be a beneficiary but, the trustee typically holds the property for the benefit of another. (Estate of Yool (2007) 151 Cal.App.4th 867, 874.) This may impact future rights and interests in property, so the right to partition will only be upheld if it is in the best interest of the parties. (CCP § 872.710.)

Continue reading →

What is a Trustee Removal Petition (Prob. Code, § 17200(b)(10))?

Published on: August 16, 2024 | By Underwood Law Firm, P.C.

underwood-trustee-removal-petition-300x300 The purpose of this article is to explain what a trustee removal petition is. In a trust the trust is managed by the trustee, who is put in charge by the creator of the trust called the settlor. A trustee removal petition is made by a settlor, co-trustee, or beneficiary of the trust with the goal of removing the trustee. (Prob. Code, § 17200, subd. (b)(10).) Usually, this petition is made by a beneficiary, meaning the person or persons intended to benefit from the trust.

Why would removal of a trustee be necessary?

A trustee is a person or persons intended to manage a trust. The trustee is meant to protect the trust and ensure beneficiaries are informed and included in any disputes arising with or against the trust. (Johnson v. Curley (1927) 83 Cal. App. 627, 630; Alexander v. Title Ins. & Trust Co. (1941) 48 Cal. App. 2d 488, 493–494.)

Continue reading →

A Primer to Trustees and Beneficiaries in California (Prob. Code § 16000.)

Published on: March 27, 2024 | By Underwood Law Firm, P.C.

underwood-trustees-beneficiaries-300x300 A trust is a legal device that is commonly used in estate planning. A trust represents “a collection of assets and liabilities” that can be held and transferred by an individual to another individual, the “beneficiary.” (Portico Mgmt. Grp., LLC v. Harrison (2011) 202 Cal.App.4th 464, 473.) When the trustee, the person responsible for managing and distributing the trust’s assets, has a personal interest in those assets, certain problems can arise. This is because the trustee is bound by several legal duties designed to safeguard the interests of the beneficiaries. Therefore, if a trustee is also a beneficiary, they must make sure that they do not unduly favor themselves at the expense of the other beneficiaries.

What is a trustee?

A person who creates a trust, the “settlor,” names a “trustee” who holds legal title to the property held in the trust for the benefit of one or more persons, the “beneficiaries.” (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 521.) The settlor can create a voluntary or express trust through a formal agreement where the settlor details his intentions regarding the trustee and beneficiaries. A property owner can designate himself as a trustee, creating an express trust holding his property. (Probate Code § 15200(a).) The owner can also designate a third party as a trustee. A trust can be created during the settlor’s life, or, it can be created by a will where it becomes effective upon the settlor’s death.

Continue reading →

How Does a Lender Respond to a Partition Action (Civ. Code § 2924l) [With Form]

Published on: November 22, 2023 | By Underwood Law Firm, P.C.

underwood-how-does-lender-respond-partition-action-300x300 A declaration of non-monetary status is a special type of court filing reserved for trustees under a deed of trust. These trustees have limited powers, but are often named as defendants in lawsuits by plaintiffs seeking to ensure proper joinder.

Of course, being named in a complaint carries with it several responsibilities, chief among these being that every defendant must issue a responsive pleading, such as an answer. For the trustee included purely as a precautionary measure, this is frustrating. Not only will they need to file an answer, which is both costly and time consuming, but they will also consistently be served with court documents in a case they have no interest in litigating.

To get around this hassle, trustees may file a declaration of non-monetary status, provided the relevant deed of trust is the “subject” of a lawsuit. Successfully filing this declaration means that the trustee no longer needs to participate in the lawsuit, provided the trustee also agrees to be bound by any court order relating to the subject deed of trust.

Continue reading →