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Sometimes Enforcing Against a
Trust or Probate Feels Like a
Scooby Doo Mystery
Nancy Adams
DCSS Attorney
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A Child Support Specialist (CSS) comes to you for assistance:
▪ The CSS received information that Obligor’s parent died, and
Obligor is going to receive an inheritance.
▪ Is your staff trained to gather the information you need to
move forward?
Probate and Trust Enforcement
Discussion with Specialist
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Explain to the CSS that there are two primary ways to distribute a person’s assets after death:
▪ A Will is a legal document that governs the distribution of the decedent’s assets through the Probate Court.
▪ A Trust, like a will, is a legal document that governs the distribution of the decedent’s assets. However, a Trust is generally administered without the need to go through Probate Court.
▪ If the decedent did not create a Will or Trust, the decedent’s property will be distributed according to the laws of the state which usually includes approval by the Probate Court.
Probate and Trust Enforcement
Discussion with Specialist
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When a party reports Obligor may be a beneficiary of a Will or a Trust, consider these important points:
▪ Mother/Father’s address may be provided to all interested parties when an Action is filed in Probate Court
▪ Joint Trusts
▪ Do not make any promises
▪ An Abstract of Support Judgment listed in CSE does not include assets that might be owed to the Obligor as a beneficiary
▪ Searching for any available information using other LCSA’s, Google, obituaries, assessor records, court systems, etc. If the CSS is unable to locate any information, it is the responsibility of the reporting party to provide more information
▪ The use of Accurint to search for the deceased is not permitted
Probate and Trust Enforcement
Discussion with Specialist
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When a party reports Obligor may be a beneficiary of a Will or
Trust, gather as much of the following information as possible:
▪ Name of deceased and their relationship to the Obligor
▪ Date and County of death/Last known address of deceased
person
▪ Nature of assets (i.e. bank accounts, real property, etc.)
▪ If real property: address, pending sale, encumbrances?
▪ Determine whether the estate is in Probate or Trust
▪ Name of Executor or Trustee: address and phone number
▪ Obtain the names of any other beneficiaries
Probate and Trust Enforcement
Discussion with Specialist
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If the Obligor is the beneficiary in a Probate Action, continue
gathering the following information:
▪ County where the Probate action is filed
▪ Docket number of the Probate action
▪ Court caption (entitlement of court action)
▪ Executor’s name, address, phone number
▪ Request a RUSH audit & UAP calculation
Probate Enforcement
Discussion with Specialist
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If the Obligor is the beneficiary in a Probate Action, initiate the
following actions:
▪ Add the Probate Docket to CSE
▪ Generate the Notice of Lien and Request for Special Notice in
CSE
▪ Ensure the audit is attached
▪ Verify with clerical staff that Party Receiving Support, Obligor,
and the Executor are served, service by mail is sufficient
Probate Enforcement
Discussion with Specialist
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If the Obligor is the beneficiary of a Trust, initiate the following
actions:
▪ Obtain the name, address, and phone number of the Trustee
▪ Obtain a copy of the Trust
▪ List any other beneficiaries named in the Trust
▪ Request a RUSH audit & UAP calculation
▪ Determine whether an Order of Exam (“OEX”) is necessary
Trust Enforcement
Discussion with Specialist
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If the Obligor is the beneficiary of a Trust and DCSS needs a copy of
the Trust:
▪ The LCSA needs the name and address of the Trustee in order
to have that person personally served with the OEX
▪ Once the Trustee is located, proceed with generating the OEX in
CSE use the information previously gathered for the Sworn
Declaration in support of the OEX
▪ The Declaration can be generated in CSE or it can be created
using Word
Trust Enforcement
Filing an Order of Exam
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A Sample Declaration in Support of an OEX:
On information and belief, Mr. T is the Trustee of the Trust, or the
Executor of the Estate created by Mrs. M, the mother of Respondent
Mr. X, the obligor in this matter. Mrs. M, the settlor or decedent, died
on or around 10/20/15. On information and belief, obligor Mr. X is the
beneficiary of the Trust/Estate and his interest in the Trust/Estate includes
real property located at ________, Pleasanton, CA 94566. The Trust/Estate
may also hold liquid assets including but not limited to bank accounts,
stocks and bonds. We believe that the Trustee Mr. T (obligor Mr. X’s
brother) is in possession and control of the M Trust/Estate documents,
information, and/or property soon to be disbursed to Mr. T, as he is the
Trustee or Executor. The M Trust/Estate documents are required to enforce
the judgment pursuant to Code of Civil Procedure sections 491.410,
708.410 and/or 709.010 and Probate Code sections 15300-15305.
Respondent’s arrears exceed $142,000.00 as outlined in the attached
accounting.
Trust Enforcement
Filing an Order of Exam
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Include the specific language from the Probate Code as a warning:
IMPORTANT NOTICE TO TRUSTEE AND COUNSEL:
PROBATE CODE § 15303 (b) states:
If the trustee has knowledge of the transfer of the beneficiary's interest or has been served with process in a proceeding under Section 709.010 of the Code of Civil Procedure by a judgment creditor seeking to reach the beneficiary's interest, and the trustee pays to or for the benefit of the beneficiary any part of the income or principal that may be paid only in the exercise of the trustee's discretion, the trustee is liable to the transferee or creditor to the extent that the payment to or for the benefit of the beneficiary impairs the right of the transferee or creditor... (Emphasis added.)
Trust Enforcement
Filing an Order of Exam
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▪ The OEX must be personally served on the Trustee
▪ The Obligor and Party Receiving Support can be served by mail
▪ Sometimes the Trustee will provide a copy of the Trust because he/she does not want to go to Court
▪ If the Trust appears legitimate, it is okay to vacate the hearing date
▪ On the other hand, the hearing provides an excellent opportunity to discuss the case and reach any potential agreements
▪ In some instances, the Trustee may not object to the Family Law Court ordering the Trustee to pay Obligor’s share to DCSS
Trust Enforcement
Filing an Order of Exam
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▪ The Trustee brings the Trust to the Court hearing. If not, the matter is
set for review to ensure that the Trustee provides DCSS a copy of the
Trust. The Trustee is ordered to appear under the Order of Exam
▪ While the Trustee is under oath, this is also an opportunity for DCSS to
determine the assets in the Trust, the value of Obligor’s share, and the
timeframe for distribution
▪ The Trustee usually has many questions regarding the case but DCSS is
unable to answer their questions. However, we view the Trustee as
having a status similar to an employer. The Trustee needs some
information in order to determine the amount and where to pay. The
Trustee also needs to understand how our accounts accrue interest
which reflects the changes in the balance
Trust Enforcement
Filing an Order of Exam
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▪ Once you receive a copy of the Trust, it is time to file the Petition
to Enforce Against Trust Beneficiary
▪ Normally, a Trust is created to protect the beneficiaries from
creditors
▪ The Legislature determined that the protection of a Trust will not
extend to beneficiaries who owe support arrears
▪ We will review the relevant code sections granting the Court the
authority to order the Trustee to pay any and all funds due the
Obligor, as a Trust beneficiary, to DCSS to satisfy support arrears
Trust Enforcement
Petition to Enforce Against Trust Beneficiary
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Even if the Trust states the Beneficiary’s interest in the Trust shall not be subject to claims of the Beneficiary’s creditors or legal process, the Beneficiary’s interest is subject to the enforcement of a money judgment.
Section 709.010(b) of the Code of Civil Procedure provides:
The judgment debtor's interest as a beneficiary of a trust is subject to enforcement of a money judgment …The judgment debtor's interest in the trust may be applied to the satisfaction of the money judgment by such means as the court, in its discretion, determines are proper….
Petition to Enforce Against Trust Beneficiary
Legal Authority
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Sections 15300 and 15301 of the Probate Code generally restrict the transfer of a
Beneficiary’s interest in a trust. However, both of these Sections are subject to
exceptions to the general rule.
Among those exceptions are Judgments against a Beneficiary for child and spousal
support. Probate Code 15305 (c) and (d) provide:
(c) Whether or not the beneficiary has the right under the trust to compel the trustee
to pay income or principal or both to or for the benefit of the beneficiary, the court
may, to the extent that the court determines it is equitable and reasonable under the
circumstances of the particular case, order the trustee to satisfy all or part of the
support judgment ….
(d) This section applies to a support judgment notwithstanding any provision in the
trust instrument.
Petition to Enforce Against Trust Beneficiary
Legal Authority
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The Law Revision Commission Comment to the 1990 enactment
deals with the purpose, scope and effect of Section 15305, as
follows, in pertinent part: “Although a trust is a spendthrift trust or
a trust for support, the interest of the beneficiary can be reached
in satisfaction of a money judgment against the beneficiary for
child or spousal support…A provision in the trust is not effective
to exempt the trust from enforcement of a judgment for support of
a minor child or support of a spouse or former spouse. As a general
rule, the beneficiary should not be permitted to have the
enjoyment of the interest under the trust while neglecting to
support his or her dependents....” (Emphasis added.) (Law Revision
Comments to Probate Code § 15305.)
Petition to Enforce Against Trust Beneficiary
Legal Authority
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California case law and public policy also authorize the Court to order Trustee to satisfy the
obligor’s support obligation. In Ventura County Department of Child Support Services v. Jeffrey C.
Brown, as Trustee, etc., (2004) 117 Cal. App. 4th 144, the Court of Appeal considered California’s
strong public policy in favor of the payment of support. “Under section 15305, even if the trust
instrument contains a spendthrift clause applicable to claims of support, it is against public
policy to give effect to the provision…. As a general rule, the beneficiary should not be permitted
to have the enjoyment of the interest under the trust while neglecting to support his or her
dependents.” (Id. at 155) The Court of Appeal stated that the beneficiary acted “with patent
disregard towards the support of his six children.”
The Court of Appeal made the following determination: “In light of the statutory and public
policy objectives in favor of the payment of support, we conclude appellant’s exercise of his
discretion was misdirected. To deny the trial Court authority to compel the exercise of a trustee’s
discretion in this instance creates the very problem that the statute was enacted to remedy-
avoiding the payment of the child support. The statute cannot have been intended to allow a
beneficiary to defraud support creditors by hiding behind the trustee’s discretion. This is directly
contrary to the legislative purpose behind section 15305.” (Id.)
Petition to Enforce Against Trust Beneficiary
Legal Authority
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In David Pratt v. Robert l. Ferguson, as Trustee, etc., 3 Cal.App.5th 102, 113-114 , the Court of Appeal,
Fourth District, examined the Second District’s analysis in Ventura County v. Brown, and issued a similar
holding as follows:
Probate Code section 15305 expresses this state's policy that child support judgments may be
enforced against the distribution of assets from a trust. Indeed, subdivision (d) of section 15305
specifically provides that “[t]his section applies to a support judgment notwithstanding any
provision in the trust instrument.” (Italics added.)
We have concluded, for reasons of public policy expressed in the statute, that the shutdown
clause cannot prohibit satisfaction of the final child support orders from periodic payments
of principal. The other distributions of principal and interest are all covered by the statute, as we
have explained. Thus, with respect to all distributions of income and principal of the Trust, the trial
court must exercise its discretion under Probate Code section 15305, subdivisions (b) and (c).
Petition to Enforce Against Trust Beneficiary
Legal Authority
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▪ The first seven paragraphs outline the history of the case and the chronology of the relevant Support Orders
▪ Paragraph eight basically sets forth the facts, similar to the OEX, again based on information and belief
▪ The DCSS Attorney must verify the Petition
▪ Points and Authorities are included as outlined above
▪ Also include the “Warning” per P.C. §15303(b) regarding the Trustee’s liability after receiving Notice from the Judgment Creditor seeking to reach the beneficiary’s interest
▪ Be sure to attach the relevant Support Orders, the accounting, and a copy of the Trust
Petition to Enforce Against Trust Beneficiary
Summary
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▪ In addition to the Petition:
▪ File an “Intent to Request Judicial Notice” (of the prior support orders attached to the Petition)
▪ Submit a “Proposed Order” which will be stamped by the Clerk’s office as “Received”
▪ Absent any objection the Proposed Order will become the Order of the Court
▪ All of the Documents need to be served on the Trustee, and counsel if s/he has an attorney, as well as the Obligor and Obligee (service by mail is sufficient)
▪ Once the POS is filed, the Clerk will file the Notice of Hearing which will also need to be served on the parties
Petition to Enforce Against Trust Beneficiary
Summary
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▪ Check your local rules to determine how the Probate department operates in the county where the LCSA will be filing
▪ CCC issues tentative rulings and the notes will indicate if any pleadings are missing or if the Court is requiring additional information like a POS or declaration
▪ Become familiar with the Probate examiners and how their office works. They tend to have unique office hours so try to contact them and resolve any issues well in advance of the hearing date
▪ If the notice and other procedural requirements are met, and there are no objections, the Court will sign the Order previously received as “Proposed”
Petition to Enforce Against Trust Beneficiary
Summary
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The Court signed the Order Enforcing Money Judgment Against Trust Beneficiary:
▪ DCSS attorney attends the Hearing in order to obtain the signed Order and take it to the Clerk’s office for filing
▪ The file-endorsed Order is served on the Trustee, and counsel if s/he has an attorney, as well as the Obligor and Obligee (service by mail is sufficient)
▪ Contact the Trustee to let him/her know how to make the payment to the SDU and how much to pay
Petition to Enforce Against Trust Beneficiary
Summary
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Potential grounds for Objection:
▪ Restrictions regarding distribution of entire share
▪ Spendthrift Clause
▪ The Dependent is provided for in the Trust
▪ The Court has discretion to order less than payment in full under the Probate Code
▪ The Settlor gave the Obligee money as and for child support and these amounts were not applied to the account
▪ The Ventura v. Brown and Pratt v. Ferguson cases do not apply
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Trustee files Objection
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DCSS files a Reply to the Trustee’s Objection:
▪ Reiterate the law regarding Probate Code Sections 15301 & 15305 as previously outlined in the Petition
▪ Argue that Ventura v. Brown and Pratt v. Ferguson cases apply
▪ Address the issue that the Trustee has no standing to dispute the underlying arrears
▪ Argue that the Trust grants the Trustee discretion in exercising his fiduciary duty to hold and administer the Obligor’s share for his benefit
▪ As such, it is in the Obligor’s benefit to pay the arrears in full or to make a monthly payment that would cover all the interest and some principal so that the arrears would begin to decrease
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Trustee files Objection
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A provision in the Trust was problematic and it was clear the Court was concerned:
Under the terms of the TRUST, OBLIGOR, is entitled to receive one third share of the Trust Estate to be held in trust with TRUSTEE to hold and administer for OBLIGOR’s benefit, until he is able to complete a drug rehabilitation program of TRUSTEE’s choice and remain drug-free for a period of five (5) years with bi-annual drug tests at a testing facility of the TRUSTEE’s choice. TRUSTEE is to give OBLIGOR fifteen hundred dollars ($1,500.00) per month. TRUSTEE may in his discretion give one thousand dollars ($1,000.00) more per month to OBLIGOR, if he participates in a program as stated above in the TRUSTEE’s discretion.
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Court’s Discretion
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What happens when the Court issues the Order to Enforce Against the
Trust Beneficiary and the Trustee still refuses to pay?
▪ DCSS can file a Motion for Joinder
▪ The Motion for Joinder is done in the Family Law action
▪ The Declaration in support of the Motion for Joinder simply outlines
the proceedings that occurred in the Probate action and why the
Joinder is necessary in the Family Law action
▪ Once the Trustee is joined as a party, we have additional
enforcement actions available
▪ Contempt Action, Subpoena power
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Motion for Joinder
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In this case, the Court:
▪ Joined the Trustee as a party
▪ Confirmed the orders issued by the Probate Court
▪ Ordered that the payment be made in 30 days and set the
matter for review
In this case, the Trustee:
▪ Finally complied and paid the arrears in full in 30 days
▪ The Hearing date was vacated and the case was closed
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Motion for Joinder
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The Trust is administered in another state:
▪ A Petition to Enforce would not be an option
▪ If the Trustee lives near the County where the family law action was initiated, then an OEX would be appropriate
Assuming the OEX is productive, and you receive a copy of the Trust, depending on the provisions of the Trust, a motion for Joinder may be appropriate
The Trust is administered in another County in California:
▪ Communicate with Supervising Attorney to determine whether an attorney from CCC will appear or if an attorney from another LCSA will be able to appear on CCC’s behalf
▪ This may also require a cost/benefit analysis
▪ If no attorney is able to appear, then the Petition cannot be filed—However, this should no longer be an issue with the recent increase in Zoom and telephonic appearances.
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Where the Trust is Administered
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The Trustee resides in another state:
▪ It is not an issue if we have a copy of the Trust
If we have a copy of the Trust and the Trust is being administered in California, we can proceed with the Petition assuming a DCSS attorney can appear
▪ If we do not have a copy of the Trust, we CANNOT proceed
An OEX cannot be served outside of the State
The Trustee resides in another County in California:
▪ California Code of Civil Procedure section 708.160 (b) states:
A person sought to be examined may not be required to attend an
examination before a court located outside the county in which the person resides or has a place of business unless the distance from the person's place
of residence or place of business to the place of examination is less than 150 miles.
▪ If the Trustee resides or has a place of business beyond 150 miles from the Court, we CANNOT proceed, or can we…..
Petition to Enforce Against Trust Beneficiary
Potential Obstacles: Where the Trustee Resides
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708.160. (a) Except as otherwise provided in this section, the
proper court for examination of a person under this article is the court in which the money judgment is entered.
(b) A person sought to be examined may not be required to attend an examination before a court located outside the county in which the person resides or has a place of business unless the distance from the person's place of residence or place of business to the place of examination is less than 150 miles.
(c) If a person sought to be examined does not reside or have a place of business in the county where the judgment is entered, the superior court in the county where the person resides or has a place of business is a proper court for examination of the person.
(d) If the judgment creditor seeks an examination of a person
before a court other than the court in which the judgment is entered, the judgment creditor shall file an application with an affidavit of facts in support.
Trust Enforcement
Potential Obstacles: Where the Trustee Resides
The Trustee lives in a Distant County
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▪ All the parties live out of state (father, mother, and the trustees) so there is no way to haul them into Court on an OEX or subpoena.
▪ Filed OEX of Attorney who prepared Trust. Attorney testified that he does not represent any of the Trustees. He states that he helped the settlor execute her Trust 10 years ago and had no contact with the family. He also asserted that he could not reveal any information pursuant to attorney-client privilege. No legal authority to overcome privilege.
▪ Supervisor not inclined to authorize a Lis Pendens against the property or a specific lien since the house is in the name of the Trust.
▪ Letter to mother informing her that we cannot take any further action without a copy of the Trust, and she may want to consider seeking legal counsel for further action she can pursue personally.
▪ We never received a copy of the Trust, but the Trustee paid voluntarily. The Obligor authorized her to discuss the case and she negotiated/facilitated a Stipulation: lump sum payment of $82K (Principal is $81,746.34 and Interest is $55,478.53). Mother essentially waived the interest and received her lump sum payment.
▪ Obligor experienced chronic homelessness as a result of mental health and substance abuse issues, enrolled in a controlled living environment as a part of a local community program attempting to provide a holistic solution for those in need
▪ Today, I would have proceeded differently under the same facts: filed Petition based on “Information and Belief” that Obligor was a beneficiary of the Trust, outlined the evidentiary basis and requested a specific lien on the property since the property was located in CCC
Trust Enforcement
Potential Obstacles: Where the Trustee Resides
The case of the Out of State Trustee
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▪ Signing Agreements wherein Jurisdiction over the
Agreement is in another State. Does the attachment 16
provide adequate protection?
▪ Lump-Sum Income Withholding Orders have been
effective in Trust cases where the Trustee resides, and
the Trust is administered out-of-state.
Trust Enforcement
Potential Obstacles: Where the Trustee Resides
Additional Out-of-State Issues
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▪ There will be occasions when the party receiving support does not agree with the
LCSA’s decision regarding further action
▪ Usually, a situation where there are jurisdictional issues or other counties are involved
and the outcome is unpredictable
▪ We have created letters wherein we reiterate to the party receiving support that our
office does not represent her/him and our office encourages her/him to seek
independent legal counsel preferably from an attorney who practices both family law
and probate law.
Trust Enforcement
Potential Obstacles: Party Receiving Support is Adverse
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▪ There will be occasions when the Obligor is the Trustee
▪ Usually, the hardest cases to handle because the Obligor has already illustrated a disregard for complying with Court orders
▪ There is a substantial possibility that he will not provide a copy of the Trust, and if we obtain a copy from another source, there is still a substantial possibility Obligor will not comply with the Order to Enforce Against Trust Beneficiary
▪ Contempt is a possible enforcement option but there is still no guarantee that it will result in payment
▪ It is also challenging because escrow companies will issue funds to an Obligor, as a Trustee, even if there are liens against his name via our Abstract of Judgment
▪ It is my understanding that the title of “Trustee” precludes the title search against an Obligor’s name because he is not receiving the funds as a seller, or person with interest in the property, nor is he a party to the purchase agreement, the “Trust” is the party in interest
Trust Enforcement
Potential Obstacles: Obligor is the Trustee
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▪ There will be occasions when the Obligor dies before the Trust is administered
▪ If the Trust has a provision stating that Obligor’s share shall be redistributed to the other beneficiaries (i.e., each beneficiary was to receive 1/3 but will now receive 1/2), then our office can take no further action
▪ What if the Trust has a provision stating Obligor’s share would be distributed to his issue?
▪ We normally do not compete with the interest of Obligor’s children
▪ Usually, the Party Receiving Support agrees and backs off; however, this position varies especially if the children are from a different relationship
▪ We usually inform the Court that we will defer to the Court’s discretion
▪ This would also be another point when our office would send the Non-Representation Letter to the Party receiving support so she/he could determine their next action
Trust Enforcement
Potential Obstacles: Obligor Dies
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Money judgments for current support and for arrearages are enforceable after the death of the obligor. (In re Marriage of Perry (1997) 58 Cal.App.4th 1104, 1106)
Question:
The Obligor has one minor child whom he is supporting. The Obligor has been ordered to pay $1,000 per month in child support. If the Obligor dies, how will his support obligation be affected?
A. The support obligation terminates on death
B. The obligation will continue unless the child is an heir of the estate
C. The obligation will continue regardless of the circumstances
D. Support will be payable until the completion of the probate
What if the Obligor is the Decedent?
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The correct choice is C.
The correct answer to this question hinges on the difference between
"obligation" and "support." The "obligation" to pay child support always
survives the death of an obligor. However, whether the "support" can be
collected depends upon the solvency of the estate, among other things.
Further, the presumption in most cases is that a surviving child would be a
direct beneficiary of the obligor's estate, so a continuing support action
may not be necessary or appropriate.
The Obligor is the Decedent
“Obligation” v. “Support”
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▪ A Creditor's Claim will be effective in collecting arrears in a probate
action in which the Obligor is the decedent. (Probate Code §§ 9000, et.
seq.)
▪ A Creditor's Claim is a simple Judicial Council Form and must be filed
within four months after Letters of Administration/Probate are issued
or 60 days after the creditor receives notice, whichever occurs later
(Probate Code § 9100(a)).
▪ Under Probate Code § 9103, a creditor is allowed, with leave of court, to
file a claim after this time if the creditor can show that he was not
served with notice.
The Obligor is the Decedent
Creditor’s Claim
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▪ “Creditor's Claim (Probate)” is Judicial Council Form DE-172.
▪ It is also good practice to simultaneously file a Request for Special
Notice (Judicial Council Form DE-154) pursuant to Probate Code § 1250,
et seq. Said form will ensure that notice of all further actions is served
upon DCSS.
▪ Filing/Service: File the original with the Court with proof of service by
mail to the Personal Representative and his or her Attorney. (Probate
Code § 9150(b)) Our office also serves the custodial and non-custodial
party.
▪ An allowed Creditor’s Claim is paid during administration of the Estate.
The Obligor is the Decedent
Creditor’s Claim
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▪ Allowance or Rejection of Claim – The Personal Representative is
required to allow or reject in whole or in part. (Probate Code §9250).
▪ There is no statutory time limit to accept or reject a claim, but failure to
accept it within 30 days can, and should be, be treated as a rejection,
thereby entitling the creditor to maintain an action on the claim.
(Probate Code § 9256)
▪ If the claim is rejected, or no acceptance is received within 30 days, the
creditor should file suit on the claim or request summary determination
within 90 days. (Probate Code§ 9353)
▪ The LCSA may also consider filing in the Family Law Action for
Determination of Arrears and Joinder of Administrator
The Obligor is the Decedent
Creditor’s Claim: Allowance/Rejection
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The priority of debts are basically as follows:
1) Expenses of administration;
2) Obligations secured by mortgage, trust deed, other liens,
including a judgment lien;
3) Funeral expenses;
4) Last illness expenses;
5) Family allowance;
6) Wage claims; and
7) General debts (including judgments not secured by a lien)
(Probate Code § 11420)
The Obligor is the Decedent
Creditor’s Claim: Priority of Payments
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1. The Obligor is a beneficiary of an estate. A probate has been opened
and the estate has not distributed. You learn that the Obligor has
"disclaimed" his entire interest in the estate after you filed a lien and served
a writ. What can you expect to receive from this estate?
A. The full amount of your lien, if the Obligor's share is large enough
B. The full amount of your lien, up to one-half of the Obligor's share of the
estate
C. One-half of the amount of your lien, if the Obligor's share is large enough
D. Nothing
Probate and Trust Enforcement
Review Questions
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1. The correct choice is D.
With a certain few exceptions, any beneficiary of an estate may "disclaim"
his interest in the estate by filing a "Disclaimer of Interest" (Probate Code §
260 through § 275). The disclaiming party is treated as having pre-
deceased the testator. Therefore, the Obligor in this question would have
no interest in the estate from which to collect child support. Disclaimers are
not fraudulent, but the timeliness of a disclaimer may be an issue (Probate
Code § 279 sets out the time limits- conclusively reasonable if filed within
nine months after death of testator).
Probate and Trust Enforcement
Review Questions
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2. The Obligor is a primary beneficiary of a Living Trust that includes real
property that has been sold and is in Escrow. You would like to collect the
Obligor's share of the Trust in order to pay support arrears. Which of the
following options are viable?
A. Serve a writ of execution on the Trustee
B. Serve a writ of execution of the Trustee and also file a lien
C. File a Petition to Enforce a Money Judgment Against the Trust
Beneficiary
D. File a creditor's claim
Probate and Trust Enforcement
Review Questions
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2. The correct choice is C.
Code of Civil Procedure § 709.010 (b) states that "[t]he judgment debtor's interest as
a beneficiary of a trust is subject to enforcement of a money judgment only upon
petition under this section by a judgment creditor to a court having jurisdiction over
administration of the trust...." It also authorizes a judgment creditor to petition the
probate court to apply a support debtor-beneficiary's interest in a trust to satisfy a
money judgment by such means as the court, in its discretion, deems proper. Note
that, pursuant to CCP § 699.720(a)(8), the interest of a TRUST BENEFICIARY is NOT
subject to a writ of execution. Please also note that the Probate Code clarifies that
that a "support judgment" includes a money judgment for child support (Probate
Code§ 15305 (a)).
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3. In the previous question, you have reviewed the trust instrument and found a "spendthrift" clause that essentially states that no money shall be distributed to any beneficiary if such a distribution would be subject to creditors of that beneficiary. You know that "such spendthrift" clauses are perfectly legal in California. What should you do?
A. Proceed with your enforcement action in the trust case as usual because even though you know that such "spendthrift" clauses are valid and enforceable under California trust law, they do not apply to child support creditors.
B. Nothing, because it would be a waste of time to try to invalidate or overcome the "spendthrift" provision in court.
C. Nothing, because even without such a "spendthrift" clause, the trustee has discretion under California trust law not to distribute, if he so chooses.
D. Take the day off and go to the Warriors game.
Probate and Trust Enforcement
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3. The correct choice is A.
Regardless of what restraints or protections a trust may provide against an obligor's
creditors, such protections have been statutorily removed relative to claims by the
government for child support. See Probate Code §§ 15305 (c) and (d). In fact, the
Law Revision Commission Comments to Probate Code § 15305 state in part that
"[a]lthough a trust is a spendthrift trust or a trust for support, the interest of the
beneficiary can be reached in satisfaction of a money judgment against the
beneficiary for child or support. In some cases, a spendthrift clause may be
construed as not intended to exclude the beneficiary's dependents" (See also Estate
of Johnson, (1967) 252 Cal. App. 2d 923, discussing public policy relative to
dependents of trust beneficiaries; Ventura County Department of Child Support
Services v. Jeffrey C. Brown, as Trustee, etc., (2004) 117 Cal. App. 4th 144; David Pratt
v. Robert l. Ferguson, as Trustee, etc., 3 Cal.App.5th 102).
Probate and Trust Enforcement
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4. You find out that the recently-deceased Obligor held title to a very large
and expensive home in joint tenancy with his mother. What type of
probate/estate action would you seek to establish to attempt to collect
arrears?
A. Have the public administrator initiate a probate
B. Petition the probate court to have the joint tenancy declared void, as
against public policy
C. None. Look for some other type of enforcement actions
D. None. Just wait for the Obligor's mother to sell the house or die, then
collect the arrears.
Probate and Trust Enforcement
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4. The correct choice is C.
There is nothing you can do relative to estate or probate enforcement in
this situation. Joint Tenancy is the classic "probate avoidance" device. No
interest in a joint tenancy pass to the decedent's creditors or, directly to the
creditors of the surviving joint tenant. Swan v. Walden (1905) 156 Cal. 195;
Ferk v. County of Lake (1988) 205 Cal.App.3d 268.
Probate and Trust Enforcement
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5. The Obligor dies leaving an all-cash estate worth $10,000.00 and a probate action is commenced. You have properly filed a creditor's claim seeking payment of $6,000.00 in arrears. At the time of final distribution of the estate, it is determined that the debt in the Obligor's estate is as follows: $2,000.00 in estate administration fees; $4,000.00 in funeral expenses; $18,000.00 in last illness expenses. How much do you expect to receive for payment of the child support arrears?
A. Nothing. The other debts take priority over child support.
B. Nothing. Although all the debts listed do not take priority over child support, last illness expenses do.
C. $6,000.00 because Family Code § 4011 clearly states that child support has priority over all debts.
D. $4,000.00 because estate administration fees and funeral expenses only have priority over child support.
Probate and Trust Enforcement
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5. The correct choice is A.
During payment of Creditor's Claims, the administrator must follow the statutory
priority of payments when deciding which claims to pay first. The priority of debts
are basically as follows: 1) expenses of administration; 2) obligations secured by
mortgage, trust deed, other liens, including a judgment lien; 3) funeral expenses; 4)
last illness expenses; 5) family allowance; 6) wage claims; 7) general debts (including
judgments not secured by a lien) (Probate Code § 11420). Thus far, the issue of
priority has not arisen in any estates claimed on by our LCSA. I believe that our
judgments may have priority equal to judgment liens not secured by a lien. I do not
believe that the priority set forth in Family Code § 4011 trumps or modifies the
priority of payments as set forth in the Probate Code. Remember, the final
distribution of an estate is a complete and total bar to any further claims. Therefore,
timeliness is very important in these matters.
Probate and Trust Enforcement
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6. Oftentimes the most substantial asset a Decedent leaves is a life
insurance policy. How should the LSCA approach this type of asset for
purposes of collecting child support after the Obligor's death?
A. Very carefully, making sure to poke it first to make sure it won't
bite
B. Treat the life insurance proceeds just like any other estate asset
C. It is not an estate asset at all, but it may be available for
enforcement
D. Serve a writ against the representative of the company that issued
the policy
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6. The correct choice is C.
A life insurance policy on the life of the Decedent is usually classified as a
contract benefit and is not part of the probate estate. Because of this, most
life insurance policies cannot be reached through probate-like methods.
However, other methods of enforcement may be available.
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Nancy Adams, DCSS Attorney
(925) 957-2381
Please be sure to complete
the session evaluation.
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