Bishop v. Hayon CA2/5
B302751
| Cal. Ct. App. | Jul 8, 2021Background
- Albert R. MacKenzie and Cynthia J. Steinberg executed a revocable trust on February 25, 2013, with a schedule specifically transferring their family home and two Idaho properties into the trust.
- The trust required division into a Survivor’s Trust (revocable by the survivor-trustor) and an irrevocable Bypass Trust upon the first spouse’s death.
- Husband died November 1, 2013; Wife became sole trustee but did not complete the required division or prepare supporting valuation/asset documentation.
- Wife consulted an estate-planning attorney in 2015 and again in 2016; the attorney advised further steps were required, but Wife only signed a short trust amendment (changing successor trustee) and a will on September 29, 2016, and did not return to complete the division.
- Wife died December 7, 2016. Bishop (the successor trustee named in the original trust) petitioned in July 2018 to determine that the disputed properties remained trust property; Hayon (named successor trustee in the amendment and executor in the will) claimed the properties were estate assets.
- The probate court held on October 1, 2019 that the properties had been placed in the trust and that the trust had not been revoked; Hayon appealed from that order.
Issues
| Issue | Bishop's Argument | Hayon's Argument | Held |
|---|---|---|---|
| Is the October 1, 2019 order appealable? | Order is non-appealable | Order is appealable | Order is appealable under Probate Code §1300(k)/§850 adjudication |
| Were the disputed properties placed in the trust? | Yes — specifically scheduled transfers put them in trust | Initially argued title change required; later conceded they were in trust | Properties were in the trust (trustor-as-trustee language suffices) |
| Did the September 29, 2016 trust amendment divide the trust into Survivor’s and Bypass subtrusts? | No — no actual division or asset allocation; amendment only changed successor trustee | Amendment’s language ‘‘implements the division’’ and thus effectuated the split | Amendment did not effect the division; it merely changed successor trustee and stated the trust otherwise remained unchanged |
| Did the September 29, 2016 will revoke (or remove assets from) the Survivor’s Trust? | No — will contains no disposition of specific trust property or express revocation of the trust | Will should be read as impliedly revoking or removing trust assets (relying on Gardenhire) | Will did not revoke or remove trust property; no specific disposition of trust assets and no reformation was sought below |
Key Cases Cited
- Estate of Heggstad, 16 Cal.App.4th 943 (Cal. Ct. App. 1993) (when trustor is trustee, trust language can suffice to place property in trust without deed)
- Gardenhire v. Superior Court, 127 Cal.App.4th 882 (Cal. Ct. App. 2005) (a trustor-trustee may revoke a trust by appropriate language in a will)
- Estate of Duke, 61 Cal.4th 871 (Cal. 2015) (unambiguous wills may be reformed for mistake on clear-and-convincing evidence)
- Estate of Dayan, 5 Cal.App.5th 29 (Cal. Ct. App. 2016) (orders adjudicating claims under Probate Code §850 are appealable)
- Carne v. Worthington, 246 Cal.App.4th 548 (Cal. Ct. App. 2016) (review of whether property was transferred on undisputed facts is de novo)
- Estate of Redfield, 193 Cal.App.4th 1526 (Cal. Ct. App. 2011) (appealability principles for probate orders)