Notice of Trust Revocation

A recent appellate opinion addressed the following issue: "when a party in a pending marital dissolution serves a notice of trust revocation as required by the trust and the other party receives actual notice of it, does the failure to file the revocation in court render it void?"

"Gary W. Jackson and Linda T. Jackson^[1] were married in 1971. In 2002 they created a revocable family trust (the trust), including a community trust for their community property. It named Gary and Linda as the trustees. The trust authorized Gary and Linda to revoke it by delivering a written revocation to the other trustee or by withdrawing their interest in the community property. The trust did not require that they file the revocation in court."

"Linda filed for dissolution of marriage in April 2019 and served the petition and summons on Gary." 

"Shortly after petitioning for dissolution of marriage, in May 2019, Linda executed and notarized a notice of revocation of her interest in the community trust."

"Linda served Gary with the revocation by mail as required by the trust. Gary acknowledged he received service of Linda's revocation. The revocation was not filed with the court, as required by section 2040, subdivision (b)(2)."

"Gary did not challenge the revocation in family court. Nor did he file his petition to challenge the revocation's validity in probate court at that time."

"Linda died in 2024. The marital dissolution case was dismissed without having terminated the marriage. Gary then filed a petition to declare the notice of revocation invalid and to confirm that he was the sole trustee. (Prob. Code, § 17200, subds. (a), (b)(1) & (3).)" 

"The court noted that Gary did not contend the revocation violated the terms of the trust. It found that Gary's property interests in the trust were not affected by the notice of revocation, and he was not prejudiced by the revocation. It also found that Linda 'substantially complied' with the requirements of the ATRO by serving Gary and that he received actual notice of the revocation."

On appeal, the California Court of Appeal affirmed the trial court's decision. "It would make no sense to invalidate Linda's revocation when she complied with the trust and Gary received actual notice of it." 

Jackson v. Meyer ____ Cal.App.5th ____ (2026)

Divorce and Estate Planning

Occasionally I have received phone calls from people who are contemplating divorce and would like to write a trust so that when they die, their future ex-spouse will not inherit their estate. If only life was that easy.....

The main problem is that there needs to be a judicial determination as to what of the marital estate is community property and what is separate property. 

A person can only devise what they legally own. An earth-shattering concept, I know. If an item is considered community property, e.g. a house, then one spouse may only unilaterally devise up to 50% of the home. If the spouse tries to devise more than 50% of the home, the other spouse can validly object. 

Conversely, a spouse is free to devise all of their separate property as they see fit. If the marital home is found to be separate property, then the spouse may leave the house to whomever they please and the other spouse cannot object. 

When making property characterizations, dates are of optimal importance. For example, prior to being married, any property acquired would be the acquiring spouse's separate property. See Family Code § 770. During marriage and subject to certain exceptions, property acquired then is considered community property. See Family Code § 760. Following the "date of separation" any property acquired after that is considered the acquiring spouse's separate property. See Family Code § 771. In short, there are three phases: (1) pre-marriage, (2) marriage and (3) post-separation.

The following hypothetical illustrates the different stages of property acquisition.

Hal and Wendy began dating in 2012. Hal was reluctant to marry Wendy because Wendy's parents did not approve of Hal's occupation, a medicinal marijuana dispensary owner. In late 2012, Hal purchased in his name alone an investment property, a duplex, in Santa Cruz, CA. Eventually Hal proposed to Wendy and the two eloped on January 1, 2013 in California. Following their secret marriage, the newlyweds jointly purchased a condo in San Francisco, CA. Hal also used his earnings at the time to pay the duplex's mortgage.  When recreational marijuana use became legal in Colorado on January 1, 2014, due to passage of Amendment 64, Hal stated his intentions to divorce Wendy and move there. So on January 2, 2014, Hal packed all of his belongings and moved to Boulder, CO permanently. Wendy then filed for divorce in San Francisco County. Wendy subsequently drowned her sorrows by buying thousands of dollars in jewelry. The divorce was finalized in summer 2014.

For characterization purposes, the Santa Cruz duplex is both separate property, as it was purchased before marriage, and community property as well, since Hal used marital wages to reduce the mortgage. See Marriage of Moore (1980) 28 C3d 366, 371/ Marriage of Marsden (1982) 130 CA3d 426, 439. The San Francisco condo is community property because it was purchased during marriage. The jewelry is Wendy's separate property because it was acquired after the date of separation.         

For estate planning purposes, Hal can only unilaterally devise a fraction of the Santa Cruz condo. Similarly, Hal and Wendy can each only unilaterally devise a fraction of the San Francisco condo. However, Wendy can do as she pleases with the jewelry.

California Power of Attorney

One common component of an estate plan is a power of attorney for financial management. The following are some often asked questions that address various aspects of a power of attorney. 

1. What is a power of attorney for financial management? 

A power of attorney for financial management is a document in which a person, the principal, designates an agent, the "attorney-in-fact, to act on his or her behalf in one or more financial transactions. In this situation, the agent binds the principal to the transactions entered into by the agent. Thus, the agent is not acting for themselves. Instead, the agent is acting on behalf of the principal. The agent is thereby not personally liable for the transactions entered into by them but instead the principal.

For example, Peter is in the process of selling his house to Bridget but needs to attend a funeral for his late Aunt Desdemona in New York City on the closing date. Peter designates Allen as his agent to execute the necessary paperwork to effect the sale of Peter’s home at closing. Here, Allen’s actions would bind Peter to sell his home to Bridget. Peter could not assert that he was not bound to sell his home to Bridget, even though he did not sign the closing documents. 

2. Why would I need a power of attorney? 

If you were to ever become incapacitated for whatever reason, a car accident for example, somebody would need to assume responsibility on your behalf to manage your financial affairs. Your incapacity is unfortunately not a valid legal reason to postpone paying your bills during the duration of your incapacity. Thus, your mortgage payment, credit cards and utility bills would not be put on hold if you were in a coma at the hospital. A power of attorney is thereby written to guard against unexpected and sudden incapacity because it provides an agent to serve on your behalf should you ever become unable to manage your own financial affairs.

Consequently, if you do not have a power of attorney and become incapacitated, then a court-supervised conservatorship would be required to manage your estate. A conservatorship is widely-regarded as expensive, time-consuming and cumbersome besides being open to public inquiry. 

3. What does durable and non-durable mean in terms of a power of attorney? 

A durable power of attorney allows the agent to act on the principal’s behalf despite the fact that the principal is incapacitated. In order to properly draft a durable power of attorney, California law requires that the following statements, or something substantially similar, be included in the durable power of attorney:

1. This power of attorney shall not be affected by subsequent incapacity of the principal.
2. This power of attorney shall become effective upon the incapacity of the principal. Prob C § 4124.

In contrast, a non-durable power of attorney is one that expires when the principal becomes incapacitated. 

4. When does a power of attorney become effective? 

A power of attorney may become effective immediately or spring into action later on. In an immediate power of attorney, the principal grants the agent the authority to act on the principal’s behalf the moment the power of attorney is property executed. Whereas in the case of a springing power of attorney, the agent’s ability to act springs forth upon the occurrence of a specified event such as the principal’s incapacity. 

5. How do I create a power of attorney? 

First, the power of attorney must be in writing. Prob C §§4022, 4124. Second, the principal needs to define what powers they are granting to their agent. For instance, this power could include the authority to open up a bank account, sell real property or trade stocks. Third, in order to be properly executed, the document needs to contain at least:

1. The date of its execution;
2. Is signed either (1) by the principal or (2) in the principal's name by another adult in the principal's presence and at the principal's direction; and
3. Is either acknowledged before a notary public or signed by at least two witnesses who meet the requirements of Prob C §4122.

There are numerous forms which may be used to create a power of attorney. The three most common are

1. The California statutory form. Prob C §4401;
2. Pre-printed power of attorney forms often found in stationery stores;
3. Attorney-drafted forms.

6. Who is eligible to draft a power of attorney? 

California law says that a natural person having the capacity to contract (think not crazy) may execute a power of attorney. Prob C §4120. All persons are competent to contract hold minors, persons of unsound mind and persons deprived of civil rights. CC §1556. 

7. What can the agent do? 

If the principal grants the agent a general power of attorney, the agent may essentially do anything that the principal could do. Prob C §4261. 

8. What can the agent not do? 

Surprisingly, an agent cannot amend the principal’s will. Prob C §4265. However, the agent may create, modify or revoke a trust if certain conditions are met. Prob C §4264.Furthermore, an agent may not perform acts that require the principal's personal attention. CC § 2304. An example of this would be where the principal has a unique talent, such as in music, and attempts to designate an agent to act in their place. For instance, if Tom Petty and the Heartbreakers, Metallica, Tool or Pink Floyd, tried to designate some awful band (use your imagination) as their agent to play their concerts for them, this would thankfully not work.

Moreover, the agent may not accept a second agency that puts the agent in a position that is adverse to the principal’s interests of the first agency. Prob C §4232. This would be a crystal- clear example of a conflict of interest. For example, if Peter selected Allen to be his agent to sell his home and simultaneously the buyer, Bridget, attempted to appoint Allen to be her agent in negotiating the same transaction, Allen would be barred from representing Bridget. 

9. Who may serve as the agent? 

In order to be eligible, the agent must have the capacity to contract. Prob C §4200. Consequently, all persons are capable of contracting except for minors, persons of unsound mind and persons deprived of civil rights. CC §1556; Fam C §§6500-7143; CC §§38-41. Thus the following people, at this moment in time, would arguably be ineligible to act as an agent: Justin Bieber, Charlie Sheen and Bernie Madoff. 

10. Can I revoke a power of attorney later on? 

Yes, a principal may revoke a power of attorney in accordance with the terms of the power of attorney or by a writing. Prob C §4151(a)(1)-(2). 

11. Does a power of attorney eventually terminate? 

Yes, a power of attorney will eventually terminate for a number of reasons. The power of attorney could be terminated due to

1. Death of the agent. Prob C §4152(a)(9);
2. Agent’s resignation. Prob C §§4152, 4207;
3. Agent’s incapacity to act. Prob C §4152(a)(7);
4. Dissolution of marriage where the ex-spouse was the agent. Probate Code §4154(a);
5. If a power of attorney is not durable, it terminates on the principal’s incapacity. CC §2356(a)(3);
6. Restoration of capacity in the case of a springing power of attorney;
7. Principal’s death. Prob C §4152(a)(4).

12. Is there a medical power of attorney? 

Yes, in California it is called an Advance Health Care Directive. In other states, the document is known as a living will. 

13. Does California recognize a power of attorney executed in
another state? 

Yes, a power of attorney validly executed in another state or jurisdiction is valid and enforceable in California regardless of whether the principal is a domiciliary of California. Prob C § 4053. 

14. Who should I select as my agent? 

Simply stated, a principal should select somebody who is knowledgeable and trustworthy. Unfortunately, I have come across countless stories of agents acting unscrupulously that left the principal in financial ruin. The key then is for the principal to perform their due diligence in making their decision. 

15. How much does a power of attorney cost? 

If you want to download the power of attorney provided for in Prob C § 4401, the printing cost is the only expense. A pre-printed form from Office Max or Staples is usually around $10. Finally, an attorney might charge a few hundred dollars or more to draft a power of attorney depending on the complexity.

You get what you pay for...........

Divorce and Community Property

When two people divorce, or legally speaking dissolve their marriage, there are serious consequences for their estate plans, assuming they have one.

For illustrative purposes, assume that Harry and Wendy married in 1985 and divorced in 2010. During their marriage, the couple had two children, Samuel, born in 1988, and Donna, born in 1990. During the course of their marriage, Harry and Wendy executed various estate planning documents. 

For example in 1995, Harry executed a will in which he bequeathed his Monet oil painting to Wendy as the primary beneficiary and his brother Bob as the alternate beneficiary. Furthermore, Harry inherited some money from a distant heir and deposited the money into a bank account in his name alone and made Wendy the pay-on-death primary beneficiary and Samuel the pay-on-death secondary beneficiary. Moreover, Harry and Wendy owned their home as joint tenants and never changed the title even after the divorce. In 2010 Harry and Wendy sadly divorced, and then in 2011 Harry passed away.

Will

Generally speaking, California law says that upon divorce, all provisions in a will that benefit a former spouse are revoked and the will is interpreted as though the former spouse had predeceased the testator and hence are not entitled to inherit from their former spouse. Prob C § 6122. 

Here, since Harry had divorced Wendy, California law says that Wendy died before Harry (just ignore reality and embrace the legal system for a moment) and thereby Harry’s brother Bob would be entitled to the Monet because Bob survived Harry.

Bank Account

Generally speaking, California law invalidates a nonprobate transfer (which is what a P.O.D. account is) to a former spouse. Prob C §5600(a). Here Harry named Wendy as the P.O.D. beneficiary but later divorced her and thus Prob C §5600(a) would apply, whereby Wendy would not receive any proceeds from the bank account and instead Samuel would.

Home (Joint Tenancy)

Generally speaking, California law says that a joint tenancy between the decedent (the person who died) and a former spouse is severed if the former spouse is not the decedent’s surviving spouse at the time of death. Prob C § 5601. 

This is particularly important because many couples own their homes as joint tenants. For instance, roughly 3 out of every 4 deeds I see from clients who are couples are titled as joint tenants. Regardless, upon the death of one joint tenant, the surviving joint tenant automatically inherits the deceased joint tenant’s interest regardless of what a will or revocable trust dictates. Yet here, because Wendy was not Harry’s spouse at the time of his death, Wendy would not be entitled to inherit Harry’s interest in the property as the surviving owner, since their divorce severed the joint tenancy between the two and made them tenants in common. Consequently, unlike joint tenancy, a tenant in common does not automatically inherit the interest of a deceased tenant in common. So Harry’s heirs would need to go through probate in order to inherit Harry’s half of the property.