1) Uniform Durable Powers of Attorney (UDPA) Changes in California Law
The following are recent legislative changes under the Uniform Statutory Durable Powers of Attorney (UDPA) for California. The following powers need to now be specifically included in the UDPA:
1) The powers of an agent to create, modify, or revoke a Trust;
2) The powers of an agent to fund a Trust;
3) The powers of an agent to change or appoint beneficiaries, in life insurance, annuities
or retirement plans; and
4) The powers to make gifts.
If those powers are not specifically included in the UDPA, the agent has no authority to take that action. This would be important if one needed to modify a Trust, to fund a Trust, or to transfer property to the Trust, after an individual becomes incapacitated. Also it may be necessary to remove the home from the Trust to protect it from any California claims for Medi-Cal purposes. So again these powers need to be explicitly in the UDPA, if not the agent does not have the authority.
2) Trustee Accounting
A recent California case, Estate of Giraldin 199 Cal.App.4th 577, has held that a Trustee of a revocable Trust is only accountable to the Trustor while that Trustor is living. The Trustee is not accountable to remainder beneficiaries, typically children of the Trustor. If the Trust remains revocable, while the Trustor is still living, any action taken, any funds deposited or withdrawals made in regard to the Trust, the Trustee is only accountable to the Trustor. This holding was based on the fact that the remainder beneficiaries had no rights to Trust property as long as the Trust was revocable.
3) Trust Lawsuit
In another recent case in California, Portico Management Group, LLC v. Harrison 202 Cal.App.4th 464, plaintiffs obtained a judgment against an irrevocable Trust. The arbitrator awarded the judgment against the Trust in the arbitration and the trial court entered that judgment against the Trust. On appeal, the Trustees appealed on the basis that the judgment was void because it was against the Trust, not the Trustees. The appellate court agreed and held that it was an empty judgment since the Trustees, not the Trust, may sue or be sued, and hold title to the property as a fiduciary.