Babbitt v. Superior Court of Los Angeles County
246 Cal. App. 4th 1135
| Cal. Ct. App. | 2016Background
- Leland and Mary Lynne Babbitt created a joint revocable family trust in 1998 and served as co-trustees; during their lifetimes the trust was revocable and held community property assets.
- Upon Leland’s death (May 5, 2014) the trust split into Trust A (survivor’s trust) and Trust B (decedent’s trust); McCormack (Leland’s daughter) has a 50% remainder interest.
- McCormack requested an accounting after Leland’s death; she filed a Probate Code §17200 petition to compel an accounting and disclosure under §§16060–16062 and §16061.7.
- The probate court ordered Babbitt to account for activities from May 5, 2011 to the present; Babbitt challenged the order and sought writ relief.
- The appellate court held McCormack had standing to petition after the settlor’s death but reversed the portion of the order compelling accounting for the period when the trust was revocable and the settlor/trustee was alive and competent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a remainder beneficiary has standing under §17200 to petition for an accounting after settlor’s death | McCormack: After settlor’s death the contingent beneficiary’s rights matured and she may petition for an accounting of trust assets | Babbitt: Standing is barred for pre-death periods when the trust was revocable | Held: McCormack had standing to petition under §17200 after Leland’s death for the now-irrevocable portion of the trust |
| Whether the probate court may compel an accounting for trust activity while the trust was revocable and settlor/trustee was the same person | McCormack: Requested accounting including pre-death period to discover possible dissipation of assets | Babbitt: Trustee owed duties to settlor while revocable; court cannot compel accounting for pre-death revocable period absent incapacity/undue influence | Held: Court erred to compel accounting for the period when the trust was revocable and the settlor/trustee was alive and competent; such pre-death disclosures are not authorized absent claims like incapacity or undue influence |
Key Cases Cited
- In re Estate of Giraldin, 55 Cal.4th 1058 (California Supreme Court) (clarifies when contingent beneficiaries gain standing after settlor’s death to seek accounting and limits during revocability)
- Esslinger v. Cummins, 144 Cal.App.4th 517 (Cal. Ct. App.) (remainder beneficiaries not entitled to mandatory accounting under §16062; §17200 petitions lie in probate court discretion)
- Drake v. Pinkham, 217 Cal.App.4th 400 (Cal. Ct. App.) (section 15800 bars contingent beneficiaries from compelling accounting while trust revocable)
- Christie v. Kimball, 202 Cal.App.4th 1407 (Cal. Ct. App.) (probate court’s supervisory power over internal affairs of trusts)
- In re Trust No. T-1 of Trimble, 826 N.W.2d 474 (Iowa Sup. Ct.) (trustee owes duties exclusively to settlor while trust revocable; no retroactive accounting duties after death)
- Matter of Malasky, 290 A.D.2d 631 (N.Y. App. Div.) (stepchildren could not compel accounting for period when joint settlors acted as trustees and trust was revocable)