Large and complex trusts – and even smaller ones – can have multiple beneficiaries who may be scattered across the country or even the world. Some may be minors or not even born yet. Even family trusts can have dozens of trustees of all ages and with varying degrees of cognition. The whereabouts of some may not even be known.
A California law that took effect at the beginning of this year is intended to make things easier for trustees to make changes and take care of other administrative actions that require beneficiary contact and consent. It is also aimed at making California a more popular state in which to establish trusts.
Understanding virtual representation
A key element of the law, which is actually a modification of the California Probate Code (CPC), is that it expands the use of “virtual representation.” That means that when an action or proceeding regarding a trust is going to take place, a beneficiary may be allowed to receive notices of actions for one or more other beneficiaries who have a “substantially identical interest with respect to the particular question or dispute.”
This is in addition to virtual representation that is allowed for those unable to participate. For example, parents can represent minor and unborn children (instead of having to get a guardian ad litum) and conservators and guardians can represent those for whom they have decision-making authority.
Trustees may choose not to rely on virtual representation
This change in the law doesn’t require trustees and their legal representatives to rely on virtual representation. They may still want to ensure that they notify all beneficiaries of any potential action – especially while the law is still new. This can help minimize the chances of litigation and other potential conflicts later if someone claims they weren’t notified or that the person who “virtually represented” them had a conflict of interest.
It’s important for trustees to understand California probate law as it pertains to the type of trust they’re administering. It’s even more important to have experienced legal guidance as they carry out their duties, not least because a misstep could potentially lead to personal liability, even as the law aims to make their jobs easier.