What Happens When A Trust Becomes Irrevocable
Generally speaking, a trust is revocable upon creation (meaning the person who created the trust has the power to modify the terms of the trust or revoke the trust). However, eventually the trust will become irrevocable. In most cases the trust becomes irrevocable upon the death of the person who created the trust.
As a beneficiary or heir, this is a very important time. While you would likely want to do nothing more than mourn your dead loved one, the California Legislature ensures that if you want to contest the trust, that you do it very quickly.
The Probate Code requires that a trustee provide a copy of the trust and a trustee notice to each beneficiary and heir of the person who created the trust if the trust becomes irrevocable upon their death (again, the most likely scenario).
While this sounds quite simple, it actually can cause quite a bit of problems for you if you want to challenge the trust terms.
The problem comes from the trustee notification. The notification has to include quite a bit of information, but most important for this discussion: it must tell you where the principal place for administration of the trust is located (generally either where the trustee lives or the trustee’s attorney’s office) and language regarding challenging the trust.
The reason why the principal place of administration language is important is because it dictates where you can file a challenge to the trust. For example, let’s say the trust creator lived in the same city as you, and all of their property was located there, you would likely want to file in that county. However, if you receive notice that the principal place of administration is 500 miles away, you likely have to file in the newly designated county. This obviously creates a hardship to you.
The second and more important part of the trustee notice is that it reduces your time to challenge the trust to 120 days. While that sounds like a lot of time, 120 days goes by very quickly, as you have to make your decision as to whether you want to challenge the trust, come up with the funds to pay for an attorney, find an attorney that can best represent you, and have the attorney draft a petition to overturn the trust. All of these things can take a significant amount of time—time during which you are dealing with the loss of a loved one.
As a result, I have had numerous clients come to me at the last moment simply because the prospect of fighting over their loved one’s inheritance mere months after their passing was too morbid for them. I urge you to repress this feeling. If you truly believe that your love one intended you to inherit more from them, then you owe it to both yourself and them to immediately move to challenge the trust—otherwise their true last wishes are not honored, and you may forever regret your decision.