Legislation Alert: AB 565

By:

Michael Rosen-Prinz
Loeb & Loeb LLP

Anna Soliman
Sheppard Mullin

 Headnote: New Virtual Representation For Trusts Effective January 1, 2026

 Summary:

Assembly Bill No. 565, chaptered on July 14, 2025 and effective January 1, 2026, amends Probate Code Section 15804 to allow for broad virtual representation over trust matters in California. Virtual representation generally allows an individual’s interests to be adequately represented in a matter by another person with substantially similar interests – for example, one trust beneficiary could represent the interests of another beneficiary.  Until now, only a guardian ad litem, or other person specifically empowered by the courts could represent another individual in this way.

New Section 15804 advances California law by allowing an individual with a substantially identical interest in the trust to receive notice, represent and bind another individual who has no ability to represent themselves in the matter due to being a minor, an incapacitated person, a person subsequently born, or a person whose identity or location is unknown and not reasonably ascertainable (commonly referred to as Minor/Incapacitated/Unborn/Unknown, or “MIUU” individuals).

Section 15804 also allows certain fiduciaries to represent and bind others, including a parent as to minor (and later born) children, and a trustee as to trust beneficiaries. However, like any other action by a fiduciary, this representation will be subject to fiduciary duties and potential liability.

Previously, Section 15804 governed notice obligations to successor interest holders (such as a beneficiary whose interest is contingent on someone else dying, or the occurrence of some other future event), and was infamous among practitioners for its confusing and archaic language.  New Section 15804 updates the functional language dealing with successor interest holders by allowing current interest holders to grant consent, in addition to receive notice, on behalf of their successors, and updates the prior language to make it more easily understood and used.

The statute includes a substantial safeguard against malicious behavior. Section 15804 does not allow any form of representation when the representor and representee have a conflict of interest with respect to that particular matter. This conflict of interest limitation prevents someone from using virtual representation to their own advantage.  In addition, any individuals with the present capacity to represent themselves may not be represented by another individual with a substantially identically interest (because anyone with capacity to represent themselves would not qualify as an MIUU).  To the extent conflict-ridden or other tricky situations come up, the option to appoint a guardian ad litem, or otherwise seek judicial guidance remains available and should be strongly considered.

Finally, considering the position of a trustee who may be reliant on the consent of, or delivery of notice to, an individual representing another, that trustee (or other fiduciary) will not be liable for any resulting loss for acting in reliance of the representation, unless the fiduciary committed a breach of trust intentionally, with gross negligence, in bad faith, or with reckless indifference to the interests of a beneficiary.

California now joins 47 other states in having a statutory virtual representation law.  Because virtual representation is not effective if the parties have a conflict of interest, practitioners should only take advantage of this new time-saving rule when it is obvious there is no conflict between the representor and representee, and be very cautious if there is even uncertainty as to the existence of a conflict.