Trusts Disputes - Civil Department or Probate Department?

In order for a court to properly adjudicate a case, it must have jurisdiction over the matter. For example, if the manager of the Oakland Athletics wanted to lodge a protest over a supposedly blown call by an umpire, they would lodge their protest with the commissioner of Major League Baseball, not the commissioner of the National Football League. In legal terms, Santa Clara County Superior Court would not have jurisdiction over a case involving real property located in Scotts Valley, CA because Scotts Valley is not located within Santa Clara County. Conversely, Santa Cruz County Superior Court would have jurisdiction over a case involving real property located in Scotts Valley, CA because Scotts Valley is located within Santa Cruz County.

Typically a trust matter is heard in the probate department of the superior court. For instance, the trust matter could be a challenge to the trust’s validity, a petition to remove the trustee, a petition to compel an accounting, a petition to determine the trust’s interpretation, etc. Still, it is not a certainty that every single probate matter will be heard in probate court. Of note, reference to a “probate court” is really just a reference to a particular department in the applicable superior court. For instance, Department 2 and Department 13 are currently the departments in which probate matters are heard in Santa Clara County Superior Court. The departments change periodically as the probate judges rotate over time.

A recent unpublished appellate decision addressed, amongst other issues, whether a civil department could properly hear a trust matter.

The appellant argued that “Department 52 of the Los Angeles County Superior Court lacked jurisdiction to decide this matter because jurisdiction relating to internal trust disputes resides exclusively in the probate department.”

The California Court of Appeal disagreed with this argument.

“Thus, although the Los Angeles Superior Court maintains a probate department, no authority vests that department with exclusive jurisdiction over probate matters. On the contrary, the California Constitution vests the superior court as a unified entity with plenary jurisdiction. As applicable here, even if the probate department has jurisdiction over internal trust affairs, that jurisdiction is nonexclusive. The superior court as a whole, which indisputably enjoys jurisdiction over actions involving contested interests in real property and the enforcement of judgments, also enjoys jurisdiction over ancillary issues that may arise in those actions, including issues relating to internal trust affairs.”

“The trial court therefore had jurisdiction to decide the merits of Lea's third-party claim to the Berryman property, even if that claim raised issues concerning internal affairs of the Family Trust.”

SMS Financial XIX LLC v. Stromberg, Los Angeles County Superior Court case no. B313902

Attorney-Client Privilege

A very well-known principle of law is the attorney-client privilege. Whenever an attorney is retained by a client, the communications between the two parties are considered confidential. Thus, these communications are not subject to disclosure to a third-party. While the client is always free to discuss the communications with whomever they want, granted it would be at their own peril. The attorney must "maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client." Bus & P C §6068(e)(1). The only exception to this rule is that “an attorney may, but is not required to, reveal confidential information relating to the representation of a client to the extent that the attorney reasonably believes the disclosure is necessary to prevent a criminal act that the attorney reasonably believes is likely to result in death of, or substantial bodily harm to, an individual.” Bus & P C §6068(e)(2).

One rationale for the attorney-client privilege is that it encourages the client to be honest, thorough, and open with their attorney. By shielding communications from basically the world, the client can be free and easy with their communication. The client will not have to worry about their statements coming back to haunt them. Even if the client discloses embarrassing, damaging or bizarre facts, the attorney must still maintain confidentiality subject to Bus & P C §6068(e)(2). This is especially important because an attorney must ascertain all material facts before they can offer advice. If the client is unwilling or afraid to divulge intimate details, the attorney will not be able to render competent legal advice. The following hypothetical illustration highlights the importance of being honest with your attorney and the consequences for secrecy.

Henry was looking to write a trust and was referred to an attorney by his neighbor Joey. Henry met with an attorney and explained that he wanted to leave his entire estate to the local Lion's Club. Years earlier, Henry had fathered an illegitimate child. Henry had purposely lost contact with the child and believed that the child was dead. Since the stigma of illegitimacy was so strong to Henry, he did not disclose this to his attorney, even though the attorney had to maintain confidentiality. Henry irrationally thought that the attorney might disclose the existence of the illegitimate child nevertheless and did not want to risk it. 

When the attorney asked about children, Henry declined to name any. The attorney then wrote the trust and named the Lion's Club as the sole beneficiary of Henry’s trust estate. Unbeknownst to Henry, his son was actually alive at the time of the trust’s execution and his death. Henry’s omission of his will was problematic because of Prob C § 21622. This law states that if the person who signed the trust failed to provide for his child because he thought that the child was dead, such child is entitled to an intestate share of the person’s estate. Since the child was Henry’s sole heir, the child was exclusively entitled to Henry’s trust estate. 

Henry passed away a few years after writing his trust. When the child was made aware of Henry’s death, he applied to be the sole beneficiary of Henry’s estate, and in light of Prob C § 21622, such was distributed to him.

The facts of  Estate of Della Sala (1999) 73 CA4th 463 are somewhat similar to the above hypothetical, although the outcome was different.