McKie Roth died in 1988 with a will that established a trust for his wife, Yvonne. Upon her death, the trustee was to distribute twenty-five percent of the trust assets to her son from a prior marriage and twenty-five percent to each of McKie’s three children, including McKie Roth Jr. The trust document provided that, if an adult child did not survive Yvonne, then that child’s surviving children would take that child’s share. It also gave Yvonne a power of appointment to change this distribution plan to her liking.

When McKie Sr. died in 1988, his three adult children raised claims against his estate, Yvonne, and the estate executor, that were unrelated to the trust. In 1991, the Contra Costa County Probate Court issued a decree of final distribution to resolve litigation. One of the terms of the settlement was that the McKie Sr.’s three adult children gave up their interests in the trust. But McKie Sr.’s grandchildren were not given notice of the 1991 decree, even though it eliminated their contingent interest in the trust assets.

In 1998, McKie Roth Jr. died, eliminating the first contingency to his son Mark’s right to inherit. Yvonne did not exercise her power of appointment before she passed in 2016, which removed the second contingency.

Did Mark get his inheritance? No. Twenty-five years after the 1991 decree, Mark petitioned the court to recognize him as a beneficiary of the trust, asserting that the settlement deprived him of his right to due process because he did not receive notice of the 1991 proceeding that disinherited him. The probate court denied his petition, describing his interest in the inheritance as an “abstract concern” rather than a property interest that would have required notice to him.

But a California Court of Appeal recently agreed with Mark. Referring to the Supreme Court case Mullane v. Central Hanover Bank & Trust Co., it said: “when the rights of beneficiaries to a trust are inevitably affected, they are entitled to notice and are indispensable parties.” It added that the Due Process Clause of the Fourteenth Amendment of the Constitution requires reasonable notice to interested parties before an action that will affect an interest in their property. In California, a contingent future interest in property is recognized as property no “matter how improbable the contingency.”

Consider the U.S. Constitution in addition to statutory notice provisions in settling that probate or trust dispute! Roth v. Jelley, California, First District, Div.Two, A155742 (2020)

About the Author:
John O’Grady leads a full-service estate and trust law firm in San Francisco. His practice includes Estate Planning & Administration, Probate and Trust Litigation.