Trusts and Estates

Joan Mauri Barefoot vs. Jana Susan Jennings, et al.

Cite as S251574
Filed January 23, 2020
Supreme Court of California

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

Headnote: Trust Contests – Standing in Probate Court

Summary: A former beneficiary of a trust whose interest was eliminated by a subsequent amendment has standing to challenge the subsequent amendment in the Probate Court.

Settlor’s daughter, Joan Mauri Barefoot, 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 Wren, the current successor trustee of the Trust, benefited as a result of the challenged amendments with a larger share of the Trust, and appointment as successor trustee.  Joan filed a Trust contest challenging the validity of the 17th through 24th amendments of the Trust 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 that she had standing to bring her Trust contest under Probate Code section 17200 because she was a beneficiary and trustee of a prior version of the Trust (the 16th amendment), which would be reinstated if Joan were successful in her suit.  Shana filed a motion to dismiss the Trust contest 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.

The Supreme Court reversed.  Probate Code section 17200 grants standing in probate court to a disinherited beneficiary who seeks to challenge a trust instrument or amendment that eliminated his or her beneficial interest.  Reading section 17200 to limit standing in probate court to current beneficiaries only would be inconsistent with the statutory scheme as a whole and the commonsense meaning of the section.  Trust contests should be decided by the probate court.  If a determination that a trust instrument or amendment is invalid would render a claimant a beneficiary of the trust, then such claimant has standing to bring a contest in probate court.  Section 17206 enables the court to preserve trust assets and protect the beneficiaries while it adjudicates standing.  The statutory scheme provides an orderly and expeditious mechanism for limited challenges to a trust, so that they can be litigated early in the probate process, and in probate court.   

https://www.courts.ca.gov/opinions/documents/S251574A.PDF

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