Packard v. Packard, Court of Appeals Case No. D082480, Fourth District, Div. One, Filed February 24, 2025

This case addresses whether a petition for construction and reformation of an amendment to a trust constitutes a trust contest subject to the 120-day statute of limitations period set forth in Code of Civil Procedure section 16061.8.

In 2010, Newton Roy Packard created a trust, which provided that upon Newton’s death, the trust estate would be distributed in equal shares to his two sons, Greg and Scott. In 2012, Newton amended his trust to provide that Greg would receive Newton’s residence and Scott would receive “a sum equal to the value of trustor’s residence,” with the remaining property divided equally between Greg and Scott. Then, in 2014, Newton wrote the word “one-half” into the first amendment, so that the first amendment appeared to say that Scott would receive “a sum equal to one-half the value of trustor’s residence.”

Following Newton’s death, (and more than 120 days after the “Notification by Trustee” was delivered to Scott), Scott filed a petition asking the probate court to construe and reform the first amendment so that it accurately reflected his father’s intent that Greg and Scott receive equal distributions from the trust. Scott argued that the handwritten interlineation as it appeared did not accurately reflect his father’s intent, and that extrinsic evidence may be used to demonstrate his father’s intent.

Greg file a motion for judgment on the pleadings, arguing that Scott’s petition was a trust contest, which was barred by the statute of limitation because Scott failed to file within the 120-day limitations period set forth in Probate Code Section 16061.8. The probate court granted Greg’s motion for judgment on the pleadings, without leave to amend, finding that (1) the handwritten interlineation did not create an ambiguity; (2) there was no plausible alternate interpretation of the interlineation; and (3) Scott’s requested remedy had the practical effect of invalidating the handwritten amendment. Therefore, the probate court concluded that Scott’s request for construction and reformation was a trust contest barred by the statute of limitations.

The appellate court disagreed. The appellate court explained that Scott did not seek to nullify his father’s trust, or otherwise question the validity of the second amendment. Instead, Scott asserted that his father always intended his assets to be divided equally between his two children, and his father’s handwritten “one-half” interlineation reflects his mistaken belief that he was accomplishing that goal. It is well established under the Probate Code and case law that a beneficiary may petition the probate court to reform a trust that, due to a mistake, does not accurately reflect the trustor’s intent.

The appellate court further explained that extrinsic evidence is admissible to determine the intent of a trustor in certain circumstances where the trust otherwise appears unambiguous. Reformation of a trust is permitted even where the language appears unambiguous so long as clear and convincing evidence establishes: (1) that the trust contains a mistake in the trustor’s expression of intent at the time it was drafted; and (2) the trustor’s actual specific intent at the time the trust was drafted.

The appellate court concluded that Scott’s petition to reform the trust to reflect his father’s intent was not a trust contest, and that Scott may try to prove it through extrinsic evidence. The appellate court reversed the probate court’s ruling and directed the probate court to deny the motion for judgment of the pleadings.

Estate of Tarlow, Court of Appeals Case No. B333665, Second District, Div. Four, Filed February 20, 2025 (Certified for Publication on February 27, 2025)

This case clarifies that a trustee of a testamentary trust has standing to file a petition for determination of persons entitled to distribution of the decedent’s estate under Probate Code Section 11700.

The decedent’s Will provided that his estate would be divided equally between his sister, Barbara, and brother, Gerald. While Gerald would receive his share outright, Barbara’s share was to be held in trust for her benefit. After the decedent’s death, Barbara purchased the remainder interest in her trust from the charitable remainder beneficiary, and then disclaimed her entire interest in her trust. Gerald disclaimed his interest in the tangible personal property of the estate. Thereafter, Barbara and Gerald filed a petition for final distribution of the estate asserting that Barbara should receive all of the tangible personal property of the estate, and that Gerald should receive the entire balance of the estate.

The person named as trustee of the trust for Barbara objected to the petition for final distribution, arguing that Barbara did not properly disclaim her interest. The trustee also filed his own petition under Probate Code Section 11700, asking the court to distribute Barbara’s interest in the estate to him, as trustee of Barbara’s trust, and to rescind Barbara’s purchase of the remainder interest.

Barbara and Gerald demurred the trustee’s petition on the grounds that the trustee lacked standing. The trial court sustained the demurrer, with leave to amend, ruling that the trustee had no standing. The trustee filed an amended petition, to which Barbara and Gerald again demurred. The trial court sustained Barbara and Gerald’s demurrer, without leave to amend.

The trustee appealed. The appellate court concluded that the trustee had standing to file a petition under Section 11700. Section 11700 provides that “at any time after letters are first issued to a general personal representative and before an order for final distribution is made, …any person claiming to be a beneficiary or otherwise entitled to distribution of a share of the estate, may file a petition for court determination of the persons entitled to distribution of the decedent’s estate.” The appellate court explained that “the ‘primary purpose’ of this petition is to establish which persons are proper heirs of an estate and therefore entitled to a distribution.” The appellate court determined that the trustee named in the decedent’s Will was a “devisee” under the decedent’s Will, and therefore, a “person claiming to be … entitled to distribution of a share of the estate,” under Section 11700.

The appellate court reversed the trial court’s order sustaining Barbara and Gerald’s demurrer, and remanded for the trial court to decide the validity and effect of Barbara’s disclaimer and purchase of the remainder interest in the trust, and any other contested issues raised by the trustee’s petition.