Trusts and Estates

Barefoot vs. Jennings

Cite as F076395
Filed August 14, 2018; Certified for Publication September 10, 2018
California Court of Appeal, Fifth District

By Golnaz Yazdchi
Sheppard Mullin Richter & Hampton LLP
https://www.sheppardmullin.com

Settlor’s daughter Joan challenged the validity of eight amendments to and restatements of the Trust executed by the settlor in a three year period, which ultimately resulted in Joan’s disinheritance and removal as successor trustee of the Trust. Joan’s sister Shana benefited as a result of the challenged amendments with a larger share of the Trust and appointment as successor trustee. Joan filed her contest under Probate Code section 17200, alleging that the settlor was not competent at the time she executed the amendments, and that the settlor executed the amendments as a result of Shana’s undue influence and fraud. Joan alleged standing because she was a beneficiary and trustee of a prior version of the Trust, which would be reinstated if Joan were successful in her suit. Shana moved to dismiss on the grounds that Joan lacked standing under section 17200 because she was neither a beneficiary nor a trustee of the Trust under the latest iteration of the Trust. The trial court found in Shana’s favor and dismissed Joan’s petition without prejudice.

The Court of Appeal affirmed. It held that the plain language of section 17200 makes clear that only a current beneficiary or trustee of a trust can file a petition under section 17200. A former beneficiary under a prior trust instrument is not considered a “beneficiary” for purposes of section 17200, and therefore lacks standing to seek relief concerning the internal affairs of a trust under section 17200. The Court opined that a former beneficiary would not, however, be barred from challenging a trust instrument on the same grounds (i.e., lack of capacity, undue influence, and fraud) by way of a civil complaint.

http://www.courts.ca.gov/opinions/documents/F076395.PDF

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