47 Cal.App.5th 469
Cal. Ct. App.2020Background
- Rodney E. Donkin Sr. and Mary Donkin created a revocable family trust (1988) and amended it in 2002; upon the first spouse's death the trust split into Survivor Trust A and Decedent's Trusts B and C, with B sized to the federal marital deduction and B/C becoming irrevocable on the first death.
- Rodney Sr. died in 2002; Mary executed a 2004 "contested amendment" before her 2005 death that purported to give successor trustees complete discretion to retain and manage all trust assets (i.e., to delay distribution).
- Beneficiaries (Annemarie Donkin and Lisa Kim) filed a 2010 petition for surcharge and to account, arguing Trusts B and C should have been allocated and distributed upon Mary’s death per the original trust terms; trustees (Rodney Jr. and Vicki Donkin) resisted.
- The California Supreme Court (Donkin I) held that beneficiaries’ 2010 petition did not constitute a forbidden ‘‘contest’’ under the trust’s no-contest clauses and remanded for further proceedings on interpretation and related relief.
- On remand the trial court ruled Trusts B and C were irrevocable after Rodney Sr.’s death, the 2004 amendment did not govern B/C, and trustees were obliged to allocate and distribute B/C to beneficiaries "as soon as is practicable"; the court also held the 2010 petition was not time-barred under Prob. Code §16061.8.
- Trustees appealed and also represented themselves; the Court of Appeal affirmed, and rejected beneficiaries’ claim that trustees’ self-representation amounted to unauthorized practice of law in these probate proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Mary’s 2004 amendment alter the distribution terms for Decedent's Trusts B and C? | Beneficiaries: No — B and C were irrevocable after Rodney Sr.'s death, so the amendment could not change their mandatory allocation and distribution. | Trustees: Yes — the amendment validly gave trustees continuing discretion to retain and manage assets, affecting B/C. | Held: No effect on B/C; those trusts became irrevocable on the first death and must be distributed per original terms. |
| Are Beneficiaries’ claims (2010 petition) barred by the statute limiting actions that "contest" a trust (Prob. Code §16061.8)? | Beneficiaries: The petition seeks interpretation and enforcement of the trust, not a statutory "contest," so §16061.8 does not bar it. | Trustees: The petition effectively contests the 2004 amendment and is time-barred under §16061.8. | Held: Petition is not a "contest" for purposes of §16061.8; statute does not bar the 2010 petition. |
| Does the trust create a continuing discretionary spendthrift trust permitting indefinite retention of B/C? | Beneficiaries: No — discretionary provisions are limited and administrative; the trust mandates allocation and distribution to primary beneficiaries "as soon as is practicable." | Trustees: The discretionary clauses allow indefinite retention and discretionary distributions, converting the trust into a continuing discretionary spendthrift trust. | Held: The discretionary clauses permit only short-term administrative action; trustees must allocate and distribute B/C "as soon as is practicable." |
| Did trustees representing themselves in these probate proceedings constitute unauthorized practice of law? | Beneficiaries: Trustees' self-representation improperly practices law and harms beneficiaries. | Trustees: Trustees may represent themselves in probate petitions for instructions; no UPL. | Held: No unauthorized practice of law here; self-representation in probate petitions for instructions is permitted and Ziegler is distinguishable. |
Key Cases Cited
- Donkin v. Donkin, 58 Cal.4th 412 (Cal. 2013) (Supreme Court held beneficiaries' petition did not constitute a prohibited no-contest action and addressed trustees' authority to interpret the instrument)
- Burch v. George, 7 Cal.4th 246 (Cal. 1994) (whether a pleading is a "contest" depends on circumstances and instrument language)
- Ziegler v. Nickel, 64 Cal.App.4th 545 (Cal. Ct. App. 1998) (nonlawyer trustee representing a trust in non-probate litigation may engage in unauthorized practice of law)
- Finkbeiner v. Gavid, 136 Cal.App.4th 1417 (Cal. Ct. App. 2006) (trustee may represent herself in probate petitions for instructions without violating UPL)
- Aguilar v. Aguilar, 168 Cal.App.4th 35 (Cal. Ct. App. 2008) (irrevocable trust terms cannot be altered after settlor's death)
- Heaps v. Heaps, 124 Cal.App.4th 286 (Cal. Ct. App. 2004) (attempts to transfer assets from an irrevocable trust may constitute conversion)
- Yeh v. Tai, 18 Cal.App.5th 953 (Cal. Ct. App. 2017) (Prob. Code §16061.8 does not apply when the action is not a contest)
- Union Bank & Trust Co. v. McColgan, 84 Cal.App.2d 208 (Cal. Ct. App. 1948) (trustee's duty is to carry out the terms and intent of the trustor)
- Safai v. Safai, 164 Cal.App.4th 233 (Cal. Ct. App. 2008) (extrinsic evidence may be admissible to ascertain a trustor's intent)