Can a Declaratory Judgment Be Requested Before a Trustee Files an Accounting?
Full Question:
Answer:
California statutes allow a petition to be filed compelling the trustee to report information about the trust or account to the beneficiary, if (A) the trustee has failed to submit a requested report or account within 60 days after written request of the beneficiary and (B) no report or account has been made within six months preceding the request.
The answer will depend on all the facts involved, such as what is requested in the declaratory relief motion. Typically, such a motion is not made to have someone ordered to do something, such as perform an accounting, but to get a determination of rights. Declaratory relief refers to a judgment of a court which determines the rights of parties without ordering anything be done or awarding damages. By seeking a declaratory judgment, the party making the request is seeking for an official declaration of the status of a matter in controversy. Optimally, the resolution of the rights of the parties involved will prevent further litigation. For example, a beneficiary of a trust t may seek the legal interpretation of a trust document to determine the parties' rights.
Please see the following CA statutes:
17200. (a) Except as provided in Section 15800, a trustee or
beneficiary of a trust may petition the court under this chapter
concerning the internal affairs of the trust or to determine the
existence of the trust.
(b) Proceedings concerning the internal affairs of a trust
include, but are not limited to, proceedings for any of the following
purposes:
(1) Determining questions of construction of a trust instrument.
(2) Determining the existence or nonexistence of any immunity,
power, privilege, duty, or right.
(3) Determining the validity of a trust provision.
(4) Ascertaining beneficiaries and determining to whom property
shall pass or be delivered upon final or partial termination of the
trust, to the extent the determination is not made by the trust
instrument.
(5) Settling the accounts and passing upon the acts of the
trustee, including the exercise of discretionary powers.
(6) Instructing the trustee.
(7) Compelling the trustee to report information about the trust
or account to the beneficiary, if (A) the trustee has failed to
submit a requested report or account within 60 days after written
request of the beneficiary and (B) no report or account has been made
within six months preceding the request.
(8) Granting powers to the trustee.
(9) Fixing or allowing payment of the trustee's compensation or
reviewing the reasonableness of the trustee's compensation.
(10) Appointing or removing a trustee.
(11) Accepting the resignation of a trustee.
(12) Compelling redress of a breach of the trust by any available
remedy.
(13) Approving or directing the modification or termination of the
trust.
(14) Approving or directing the combination or division of trusts.
(15) Amending or conforming the trust instrument in the manner
required to qualify a decedent's estate for the charitable estate tax
deduction under federal law, including the addition of mandatory
governing instrument requirements for a charitable remainder trust as
required by final regulations and rulings of the United States
Internal Revenue Service.
(16) Authorizing or directing transfer of a trust or trust
property to or from another jurisdiction.
(17) Directing transfer of a testamentary trust subject to
continuing court jurisdiction from one county to another.
(18) Approving removal of a testamentary trust from continuing
court jurisdiction.
(19) Reforming or excusing compliance with the governing
instrument of an organization pursuant to Section 16105.
(20) Determining the liability of the trust for any debts of a
deceased settlor. However, nothing in this paragraph shall provide
standing to bring an action concerning the internal affairs of the
trust to a person whose only claim to the assets of the decedent is
as a creditor.
(21) Determining petitions filed pursuant to Section 15687 and
reviewing the reasonableness of compensation for legal services
authorized under that section. In determining the reasonableness of
compensation under this paragraph, the court may consider, together
with all other relevant circumstances, whether prior approval was
obtained pursuant to Section 15687.
(22) If a member of the State Bar of California has transferred
the economic interest of his or her practice to a trustee and if the
member is a deceased member under Section 9764, a petition may be
brought to appoint a practice administrator. The procedures,
including, but not limited to, notice requirements, that apply to the
appointment of a practice administrator for a deceased member shall
apply to the petition brought under this section.
(23) If a member of the State Bar of California has transferred
the economic interest of his or her practice to a trustee and if the
member is a disabled member under Section 2468, a petition may be
brought to appoint a practice administrator. The procedures,
including, but not limited to, notice requirements, that apply to the
appointment of a practice administrator for a disabled member shall
apply to the petition brought under this section.
(c) The court may, on its own motion, set and give notice of an
order to show cause why a trustee should not be removed for failing
to register in the Statewide Registry under Section 2850.
17200.1. All proceedings concerning the transfer of property of the
trust shall be conducted pursuant to the provisions of Part 19
(commencing with Section 850) of Division 2.
17201. A proceeding under this chapter is commenced by filing a
petition stating facts showing that the petition is authorized under
this chapter. The petition shall also state the grounds of the
petition and the names and addresses of each person entitled to
notice of the petition.
17202. The court may dismiss a petition if it appears that the
proceeding is not reasonably necessary for the protection of the
interests of the trustee or beneficiary.
16062. (a) Except as otherwise provided in this section and in
Section 16064, the trustee shall account at least annually, at the
termination of the trust, and upon a change of trustee, to each
beneficiary to whom income or principal is required or authorized in
the trustee's discretion to be currently distributed.
(b) A trustee of a living trust created by an instrument executed
before July 1, 1987, is not subject to the duty to account provided
by subdivision (a).
(c) A trustee of a trust created by a will executed before July 1,
1987, is not subject to the duty to account provided by subdivision
(a), except that if the trust is removed from continuing court
jurisdiction pursuant to Article 2 (commencing with Section 17350) of
Chapter 4 of Part 5, the duty to account provided by subdivision (a)
applies to the trustee.
(d) Except as provided in Section 16064, the duty of a trustee to
account pursuant to former Section 1120.1a of the Probate Code (as
repealed by Chapter 820 of the Statutes of 1986), under a trust
created by a will executed before July 1, 1977, which has been
removed from continuing court jurisdiction pursuant to former Section
1120.1a, continues to apply after July 1, 1987. The duty to account
under former Section 1120.1a may be satisfied by furnishing an
account that satisfies the requirements of Section 16063.
(e) Any limitation or waiver in a trust instrument of the
obligation to account is against public policy and shall be void as
to any sole trustee who is a disqualified person as defined in
Section 21350.5.
16063. (a) An account furnished pursuant to Section 16062 shall
contain the following information:
(1) A statement of receipts and disbursements of principal and
income that have occurred during the last complete fiscal year of the
trust or since the last account.
(2) A statement of the assets and liabilities of the trust as of
the end of the last complete fiscal year of the trust or as of the
end of the period covered by the account.
(3) The trustee's compensation for the last complete fiscal year
of the trust or since the last account.
(4) The agents hired by the trustee, their relationship to the
trustee, if any, and their compensation, for the last complete fiscal
year of the trust or since the last account.
(5) A statement that the recipient of the account may petition the
court pursuant to Section 17200 to obtain a court review of the
account and of the acts of the trustee.
(6) A statement that claims against the trustee for breach of
trust may not be made after the expiration of three years from the
date the beneficiary receives an account or report disclosing facts
giving rise to the claim.
(b) All accounts filed to be approved by a court shall be
presented in the manner provided in Chapter 4 (commencing with
Section 1060) of Part 1 of Division 3.
16064. The trustee is not required to report information or account
to a beneficiary in any of the following circumstances:
(a) To the extent the trust instrument waives the report or
account, except that no waiver described in subdivision (e) of
Section 16062 shall be valid or enforceable. Regardless of a waiver
of accounting in the trust instrument, upon a showing that it is
reasonably likely that a material breach of the trust has occurred,
the court may compel the trustee to report information about the
trust and to account.
(b) In the case of a beneficiary of a revocable trust, as provided
in Section 15800, for the period when the trust may be revoked.
(c) As to a beneficiary who has waived in writing the right to a
report or account. A waiver of rights under this subdivision may be
withdrawn in writing at any time as to the most recent account and
future accounts. A waiver has no effect on the beneficiary's right to
petition for a report or account pursuant to Section 17200.
(d) Where the beneficiary and the trustee are the same person.