During a recent evening event with other professionals in Los Angeles, California, I was asked whether a probate of a living trust created and signed in Los Angeles is necessary. My knee-jerk reaction was to say “of course not”. But after hearing more about the situation, I had to reconsider.
The circumstances were that the California based trustee in charge of the estate after the settlors of the trust died wanted to transfer the trust’s investments from one investment firm to another firm. Both securities firms were located in Ventura County with offices in Santa Barbara County and Orange County, California. The firm currently holding the investments asked the trustee whether he knew with certainty that the trust he had in his possession was the most recent version and that it had not been amended.
Until the trustee could somehow prove that he had the most recently drafted trust which had not been amended, the investment firm would not release the property. To make matters worse, the investment firm would not accept a mere written statement (not even a notarized one) from the trustee that he had the latest trust and that there were no amendments to it.
I suppose that the California investment firm had the experience of releasing funds to a trustee without asking whether the living trust the trustee presented was the latest version and whether it had been amended. My guess is that after releasing the investments to the trustee, another person connected to the estate approached the investment firm with a later version of the trust which may have named that person as the trustee in place of the trustee who previously obtained access to the investments. The investment firm probably had no choice but to require proof that the living trust presented by the second trustee was the most recent version and once it received that proof it handed-over the property upon demand. As a result, the firm was out-of-pocket the value of the investment account one time too many.
How does a trustee prove that the living trust he or she possesses is the latest version and has not been amended? The trustee will have to petition a California probate court having jurisdiction over trust administration seeking an order confirming the status of the living trust as the last living trust or amendment signed by the settlors. The trustee can then present that order to the investment firm so as to obtain control over the investments and transfer them to the other firm as he or she originally tried to do once becoming the trustee.
If you would like help by consulting with an attorney experienced in trust administration, you are welcome to call Mitchell A. Port at (310) 559-5259.