Sunday, June 21, 2009

CALIFORNIA CODES-PROBATE CODE SECTION 16460-16465

CALIFORNIA CODES
PROBATE CODE
SECTION 16460-16465


16460.
(a) Unless a claim is previously barred by adjudication,
consent, limitation, or otherwise:

(1) If a beneficiary has received an interim or final account in
writing, or other written report, that adequately discloses the
existence of a claim against the trustee for breach of trust, the
claim is barred as to that beneficiary unless a proceeding to assert
the claim is commenced within three years after receipt of the
account or report. An account or report adequately discloses
existence of a claim if it provides sufficient information so that
the beneficiary knows of the claim or reasonably should have inquired
into the existence of the claim.

(2) If an interim or final account in writing or other written
report does not adequately disclose the existence of a claim against
the trustee for breach of trust or if a beneficiary does not receive
any written account or report, the claim is barred as to that
beneficiary unless a proceeding to assert the claim is commenced
within three years after the beneficiary discovered, or reasonably
should have discovered, the subject of the claim.

(b) For the purpose of subdivision (a), a beneficiary is deemed to
have received an account or report, as follows:

(1) In the case of an adult who is reasonably capable of
understanding the account or report, if it is received by the adult
personally.

(2) In the case of an adult who is not reasonably capable of
understanding the account or report, if it is received by the person'
s legal representative, including a guardian ad litem or other person
appointed for this purpose.

(3) In the case of a minor, if it is received by the minor's
guardian or, if the minor does not have a guardian, if it is received
by the minor's parent so long as the parent does not have a conflict
of interest.

(c) A written account or report under this section may, but need
not, satisfy the requirements of Section 16061 or 16063 or any other
provision.


16461.
(a) Except as provided in subdivision (b), (c), or (d), the
trustee can be relieved of liability for breach of trust by
provisions in the trust instrument.

(b) A provision in the trust instrument is not effective to
relieve the trustee of liability (1) for breach of trust committed
intentionally, with gross negligence, in bad faith, or with reckless
indifference to the interest of the beneficiary, or (2) for any
profit that the trustee derives from a breach of trust.

(c) Subject to subdivision (b), a provision in a trust instrument
that releases the trustee from liability if a beneficiary fails to
object to an item in an interim or final account or other written
report within a specified time period is effective only if all of the
following conditions are met:

(1) The account or report sets forth the item.

(2) The period specified in the trust instrument for the
beneficiary to object is not less than 180 days, or the trustee
elects to follow the procedure provided in subdivision (d).

(3) Written notice in 12-point boldface type is provided to a
beneficiary with the account or report in the following form:


NOTICE TO BENEFICIARIES


YOU HAVE (insert "180 days" or the period specified in the trust
instrument, whichever is longer) FROM YOUR RECEIPT OF THIS ACCOUNT OR
REPORT TO MAKE AN OBJECTION TO ANY ITEM SET FORTH IN THIS ACCOUNT OR
REPORT. ANY OBJECTION YOU MAKE MUST BE IN WRITING; IT MUST BE
DELIVERED TO THE TRUSTEE WITHIN THE PERIOD STATED ABOVE; AND IT MUST
STATE YOUR OBJECTION. YOUR FAILURE TO DELIVER A WRITTEN OBJECTION TO
THE TRUSTEE WITHIN THE PERIOD STATED ABOVE WILL PERMANENTLY PREVENT
YOU FROM LATER ASSERTING THIS OBJECTION AGAINST THE TRUSTEE. IF YOU
DO MAKE AN OBJECTION TO THE TRUSTEE, THE THREE-YEAR PERIOD PROVIDED
IN SECTION 16460 OF THE PROBATE CODE FOR COMMENCEMENT OF LITIGATION
WILL APPLY TO CLAIMS BASED ON YOUR OBJECTION AND WILL BEGIN TO RUN ON
THE DATE THAT YOU RECEIVE THIS ACCOUNT OR REPORT.


(d) A provision in a trust instrument that provides for a period
less than 180 days to object to an item in an account or report shall
be ineffective to release the trustee from liability. A trustee of
a trust created by an instrument with an ineffective period may elect
to be governed by the provisions of subdivision (c) by complying
with the requirements of subdivision (c), except that "180 days"
shall be substituted in the notice form for the ineffective period.

(e) Subject to subdivision (b), a beneficiary who fails to object
in writing to an account or report that complies with the
requirements of subdivision (c) within the specified, valid period
shall be barred from asserting any claim against the trustee
regarding an item that is adequately disclosed in the account or
report. An item is adequately disclosed if the disclosure regarding
the item meets the requirements of paragraph (1) of subdivision (a)
of Section 16460.

(f) Except as provided in subdivision (a) of Section 16460, the
trustee may not be released from liability as to any claim based on a
written objection made by a beneficiary if the objection is
delivered to the trustee within the specified, effective period. If
a beneficiary has filed a written objection to an account or report
that complies with the requirements of subdivision (c) within the
specified, valid period that concerns an item that affects any other
beneficiary of the trust, any affected beneficiary may join in the
objection anytime within the specified, valid period or while the
resolution of the objection is pending, whichever is later. This
section is not intended to establish a class of beneficiaries for
actions on an account and report or provide that the action of one
beneficiary is for the benefit of all beneficiaries. This section
does not create a duty for any trustee to notify beneficiaries of
objections or resolution of objections.

(g) Provided that a beneficiary has filed a written objection to
an account or report that complies with the requirements of
subdivision (c) within the specified, valid period, a supplemental
written objection may be delivered in the same manner as the
objection not later than 180 days after the receipt of the account or
report or no later than the period specified in the trust
instrument, whichever is longer.

(h) Compliance with subdivision (c) excuses compliance with
paragraph (6) of subdivision (a) of Section 16063 for the account or
report to which that notice relates.

(i) Subject to subdivision (b), if proper notice has been given
and a beneficiary has not made a timely objection, the trustee is not
liable for any other claims adequately disclosed by any item in the
account or report.

(j) Subdivisions (c) to (i), inclusive, apply to all accounts and
reports submitted after the effective date of the act adding these
subdivisions.


16462.
(a) Notwithstanding Section 16461, a trustee of a revocable
trust is not liable to a beneficiary for any act performed or omitted
pursuant to written directions from the person holding the power to
revoke, including a person to whom the power to direct the trustee is
delegated.

(b) Subdivision (a) applies to a trust that is revocable in part
with respect to the interest of the beneficiary in that part of the
trust property.


16463.
(a) Except as provided in subdivisions (b) and (c), a
beneficiary may not hold the trustee liable for an act or omission of
the trustee as a breach of trust if the beneficiary consented to the
act or omission before or at the time of the act or omission.

(b) The consent of the beneficiary does not preclude the
beneficiary from holding the trustee liable for a breach of trust in
any of the following circumstances:

(1) Where the beneficiary was under an incapacity at the time of
the consent or of the act or omission.

(2) Where the beneficiary at the time consent was given did not
know of his or her rights and of the material facts (A) that the
trustee knew or should have known and (B) that the trustee did not
reasonably believe that the beneficiary knew.

(3) Where the consent of the beneficiary was induced by improper
conduct of the trustee.

(c) Where the trustee has an interest in the transaction adverse
to the interest of the beneficiary, the consent of the beneficiary
does not preclude the beneficiary from holding the trustee liable for
a breach of trust under any of the circumstances described in
subdivision (b) or where the transaction to which the beneficiary
consented was not fair and reasonable to the beneficiary.


16464.
(a) Except as provided in subdivision (b), a beneficiary may
be precluded from holding the trustee liable for a breach of trust
by the beneficiary's release or contract effective to discharge the
trustee's liability to the beneficiary for that breach.

(b) A release or contract is not effective to discharge the
trustee's liability for a breach of trust in any of the following
circumstances:

(1) Where the beneficiary was under an incapacity at the time of
making the release or contract.

(2) Where the beneficiary did not know of his or her rights and of
the material facts (A) that the trustee knew or reasonably should
have known and (B) that the trustee did not reasonably believe that
the beneficiary knew.

(3) Where the release or contract of the beneficiary was induced
by improper conduct of the trustee.

(4) Where the transaction involved a bargain with the trustee that
was not fair and reasonable.


16465.
(a) Except as provided in subdivision (b), if the trustee,
in breach of trust, enters into a transaction that the beneficiary
may at his or her option reject or affirm, and the beneficiary
affirms the transaction, the beneficiary shall not thereafter reject
it and hold the trustee liable for any loss occurring after the
trustee entered into the transaction.

(b) The affirmance of a transaction by the beneficiary does not
preclude the beneficiary from holding a trustee liable for a breach
of trust if, at the time of the affirmance, any of the following
circumstances existed:

(1) The beneficiary was under an incapacity.

(2) The beneficiary did not know of his or her rights and of the
material facts (A) that the trustee knew or reasonably should have
known and (B) that the trustee did not reasonably believe that the
beneficiary knew.

(3) The affirmance was induced by improper conduct of the trustee.

(4) The transaction involved a bargain with the trustee that was
not fair and reasonable.

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