Part II: Asset Distribution Conditioned Upon Release of Trustee Liability

To continue from our previous post regarding Bellows v. Bellows (2011) 196 Cal.App.4th 505, the Court of Appeal reversed the trial court's ruling citing Probate Code section 16004.5(a), which states that the trustee could not condition the distribution of trust assets on a release of liability. Frederick was required to make a distribution to Donald without any strings attached; accordingly, he cannot require an involuntary release of liability for payment of the distribution. The trial court's ruling that Donald's acceptance of the check prevented him from challenging the accuracy of the accounting submitted by Frederick is deemed nugatory.

The Court of Appeals also addressed the abatement issue and deemed the ruling improper. The appellate court cited Probate Code section 854, which states that "if a civil action is pending with respect to the subject matter of a petition filed pursuant to this chapter and jurisdiction has been obtained in the court where the civil action is pending prior to the filing of the petition, upon request of any party to the civil action, the court shall abate the petition until the conclusion of the civil action." Donald filed his petition under Probate Code section 17200, which is not part of the chapter in which section 854 is contained.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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