How the 120-Day Notice Works in California Trust Cases
Dealing with the legal system of trusts and estates can be complicated and often overwhelming, particularly in California, where specific laws govern the process. Did you know that as of 2024, only 33% of adults in the US have made estate planning documents, down from 36% in 2023?
Among those who haven't created a living trust or estate plan, 60% say they haven't even tried to consider estate planning or begin the process of creating one. It’s important for everyone to understand the concept of estate planning, wills and trusts to protect your assets and inheritance.
For instance, under the California 120-day notice trust, a beneficiary has 120 days from receiving a trustee's notice to contest a trust.
Let’s take a look at this deadline and how it can possibly impact you or your loved ones.
Understanding the 120-Day Notice Requirement
As mentioned, the California 120-day notice is a formal notice to all beneficiaries or interested parties concerning the administration of the trust. Notice should be given within 120 days from when a trustee is appointed or when the trust owner passes away. This procedure ensures that everyone has a fair chance to claim their rights regarding the trust.
Failing to comply with this will complicate matters, potentially leading to litigation, especially considering the 120-day notice period that ensures transparency and accountability from a trust administration standpoint.
According to asset protection attorney Douglas A. Oberdorfer, avoiding probate is one of the primary benefits of creating trusts. Beneficiaries can contest it, but a well-drafted trust ensures the equitable distribution of wealth to the people or organizations chosen as beneficiaries.
Who Must Receive the 120-Day Notice?
The 120-day notice must be sent to several key parties involved in the trust. All beneficiaries named in the trust must be notified, including anyone who is claiming against the trust assets.
Send it to those heirs who are not beneficiaries but have a legal interest. If there are creditors with claims against the trust, you should also provide notice to them.
Have everyone be aware to avoid future disputes.
Key Information Included in the Notice
A well-drafted 120-day notice should contain key information to keep all parties informed of the current status of the trust. The notice must identify the trust and its date of creation. You will need to provide the name and the trustee’s contact details to facilitate beneficiaries accessing the trustee in case of questions.
The notice should list the assets in the trust, showing what is included. It should state what ongoing duties or responsibilities the trustee must complete, along with an explanation of what they should be.
More specifically, the notice should provide information about the beneficiaries' rights and the methods they may use to obtain further information.
Document the date of delivery of the notice so that the court can commence the 120-day computation for potential claims or actions on the part of the interested parties in the trust.
Consequences of Failing to Provide the Notice
Failure to give such a notice of 120 days to anyone may lead to dire consequences, both for trustees and beneficiaries. You risk being taken legally by any beneficiary who deems himself not to have been informed of his rights, and this will most likely bring along exorbitant litigation costs, damage costs, and a loss of trust in your management capacity.
If you don’t properly notify the people involved, you could lose your right to make a defense or claim. Not doing this may also slow down the trust process, causing confusion and frustration for everyone.
The key to transparency and preventing unnecessary disputes in trust matters is timely notification. You should take action now to protect your interests and those of the beneficiaries.
Responding to the 120-Day Notice: Rights and Options
The 120-day notice clarifies that beneficiaries have specific rights and options to consider. Review the trust document to determine your benefits and entitlements. If you disagree with the notice or think it's wrong, ask the trustee for clarification or more information.
You have the right to take action against the trustee if you believe the latter has acted contrary to the trust's best interest. You may want to seek the advice of a trust law attorney to explore your options for pursuing the above step.
You could also consider whether you wish to accept the terms. Consider that inaction for a period of 120 days may adversely affect your rights.
You should take action now to protect not just your interests but also those of the beneficiaries.
