New Case Update: Roth V. Jelley

Cite as A155742
Filed February 24, 2020, First District, Div. Two

In this case, a grandfather created a testamentary trust for the benefit of his wife through his will. The trust benefited the wife during her life and gave her the opportunity to exercise a power of appointment. If she did not exercise her power of appointment the trust residue was to be distributed into four equal shares, three to the grandfather’s children from a previous marriage and one to the wife’s child from a previous marriage. If a beneficiary predeceased that portion was to go to issue.

The grandfather died in 1988 and litigation resulted from the probate of the grandfather’s will. A settlement was reached and all three of grandfather’s children from a previous marriage disclaimed their interest in the trust. Grandchildren never received notice of the 1988 proceedings. The wife died in 2016 never having exercised her power of appointment. Following her death, grandson contended that the 1988 probate order based on the settlement was void as he did not receive notice and that he should be a beneficiary of the testamentary trust.  Grandson was the son of one of the three children that disclaimed their interest in the trust. Grandson’s father had predeceased wife and therefore would have taken under the terms of the trust had the interest not been disclaimed in the 1988 settlement.

The court agreed with the grandson and ruled that a trust beneficiary must receive notice and an opportunity to be heard when there is a pending petition eliminating that beneficiary’s contingent interest. The take away for trustees and executors is to provide notice to all beneficiaries even those that are considered “contingent.

The full case can be accessed here: https://www.courts.ca.gov/opinions/documents/A155742.PDF