Trusts and Estates

SB 1024

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By Kimberly R. McGhee
Black & McGhee  

Headnote: Procedure to Replace an Incapacitated or Deceased Professional Fiduciary

Summary: Senate Bill 1024, passed in 2022, and effective January 1, 2023, creates a procedure to petition the California court for the appointment of a professional fiduciary practice administrator to act as a temporary professional fiduciary when a professional fiduciary either becomes incapacitated or dies and a vacancy exists.

The bill requires the Judicial Council to create or revise any forms or rules necessary to implement its provisions, no later than January 1, 2024. When available, forms can be located on the Judicial Council’s website.

Senate Bill 1024 added new sections 2469 and 9765 to the Probate Code. The new Probate Code sections, commencing January 1, 2024, provide for a new procedure for when a professional fiduciary becomes incapacitated (Probate Code section 2469) or dies (Probate Code section 9765) resulting in a vacancy in the roles of guardianships of the estate, conservatorships of the person and estate, decedent‚Äôs estates, court-supervised trusts, and non-court-supervised trusts. 

The bill provides that the incapacitated or deceased fiduciary’s conservator, agent under power of attorney for asset management, trustee, or interested person may petition for the appointment of one or more individuals, qualified to act as a professional fiduciary under the Professional Fiduciaries Act, as a professional fiduciary practice administrator, to take control of the deceased professional fiduciary’s files and to be appointed as temporary successor as to those matters for which a vacancy exists as a result of the professional fiduciary’s incapacity or death.

The court may appoint as practice administrator the professional fiduciary nominated by the incapacitated or deceased fiduciary in a writing, or in the absence of a writing, by the person nominated by the person having legal standing to act on behalf of the incapacitated professional fiduciary. The court shall not make the appointment if the court concludes that the appointment of the nominated person would be contrary to the best interests of, or would create a conflict of interest with, any interested party in a matter in which the incapacitated fiduciary was acting in a fiduciary capacity.

The appointment of the professional fiduciary practice administrator as temporary successor shall terminate 45 days after the entry of the order appointing the professional fiduciary practice administrator, or earlier if another person is appointed.  The bill further provides for required notice and the posting of a bond in each matter. 

Once appointed, the professional fiduciary practice administrator must then file a copy of the appointing order in each matter in which the practice administrator is appointed, take control and review all files and writings maintained by the incapacitated or deceased fiduciary for each matter appointed, provide additional notice, and file an appropriate accounting in which compensation may be requested.

The bill requires the notice after appointment to include the following information:

A.   The parties‚Äô right to petition the court for the appointment of a permanent successor;

B.    Within 15 days after the date notice was given, the interested parties‚Äô rights to nominate an individual to act as permanent successor, and then the obligation of the professional fiduciary practice administrator to petition for the appointment of the individual nominated; and

C.    The ability of the professional fiduciary practice administrator to petition the court for appointment of a permanent successor.

The bill further amends the related Business and Professions Code sections to include new definitions and requirements in accordance with the new procedure.

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