INTRODUCTION

In California, a probate proceeding traditionally involves the administration and disposition of a decedent’s assets.  An archetypal probate proceeding includes the submission of an instrument to be recognized by the court as the decedent’s final will, and the appointment of a personal representative who marshals and inventories the assets, provides notice to creditors, and, ultimately, distributes the assets to the beneficiaries, all under the court’s supervision.  The proceeding is public, and it can be time-consuming and costly with filing fees, publication fees, and statutory fees for probate referees, attorneys, and administrators.

Estate planning lawyers in California often recommend tools that circumvent probate administration, most commonly by transferring assets to a living trust prior to the settlor’s death.  Even when a person has used a trust or other estate planning tools to avoid a probate administration at the person’s death, there are situations that may require the probate court’s involvement.

In this article, we explore why a common trust provision—a power of appointment exercisable by will—may require involvement of the probate court, and we suggest an alternative to a typical probate proceeding while still providing a mechanism to confirm the validity of the exercise of a power of appointment under the powerholder’s will.

THE CHALLENGE: POWER OF APPOINTMENT EXERCISED UNDER POWERHOLDER’S WILL POTENTIALLY REQUIRING PROBATE OF WILL

In practice, we commonly encounter a trust provision that confers to a person (the “powerholder”) a testamentary power of appointment exercisable by will.[1]  A “typical” scenario is where parents create a trust for the benefit of a child for life, and give the child a testamentary power of appointment, exercisable by will, to direct the distribution of assets to whomever the child desires at the child’s death.  If the powerholder in fact exercises the power of appointment by will, must the powerholder’s will be submitted for probate for the exercise to be deemed valid?

Sometimes the language granting the power of appointment seems dispositive, requiring that the power be exercised by “a will or codicil duly admitted to probate.”  From an estate planning perspective, it seems counterintuitive to use language in a trust document that mandates a probate proceeding, given that trusts are touted as the vehicle of choice to avoid probate.  More often, the language granting the power of appointment requires simply that it be exercised by will.  In such cases, the requirements to validly exercise the power of appointment do not appear to require the powerholder’s will be submitted for probate. [2]

On the other hand, a trustee has a duty to ensure the proper administration of the trust, including accurately distributing trust assets.  (See In re Gilmaker’s Estate (1964) 226 Cal.App.2d 658, 663 [“One in whom trust is placed is duty bound to exercise reasonable diligence for the purpose of ascertaining the nature and extent of his obligations and to be faithful in the performance thereof.”].)  Thus, a prudent and risk-averse trustee may wish to ensure the validity of any instrument that affects distribution of trust assets.  Since the probate court generally has exclusive jurisdiction to determine the validity of a will, it follows that, to carry out its duties, the trustee should require the powerholder’s will be admitted to probate to ensure the validity of the will and the proper exercise of the power of appointment therein.  (See Reed v. Hayward (1943) 23 Cal.2d 336 [holding that, generally, probate court has exclusive jurisdiction over probate and proof of wills, will contests, and production and establishment of lost or destroyed wills].)

This idea of a court-supervised verification of the instrument that is exercising the power of appointment is also set forth in the Uniform Probate Court, which has been adopted, at least in part, by eighteen states.  Section 3-102 states, in relevant part, “to be effective to prove the transfer of any property or to nominate an executor, a will must be declared to be valid by an order of informal probate by the Registrar, or an adjudication of probate by the court.” (Uniform Probate Code, sec. 3-102; emphasis added.)

In those situations where the exercise of a power of appointment is the only reason to probate a will, practitioners weigh the costs (time and expense) of a probate administration against the potential risks to the trustee if the will is not admitted.[3]  But if the powerholder does not have assets which require probate, is it possible to admit the will to probate for the sole purpose of confirming the powerholder’s exercise of the power of appointment without initiating a full probate administration?  The answer in California is “yes.”

THE SOLUTION: LIMITED PROBATE PROCEEDING

Initiating a probate proceeding for the limited purpose of admitting a will to probate provides court oversight and satisfies the procedural requirements to verify the validity of a decedent’s will.  It also avoids the time and expense of a full probate administration where there are no assets subject to probate.  In states that have adopted the Uniform Probate Code, the pathway to a limited probate proceeding should be clear.  The Uniform Probate Code explicitly provides that a “formal testacy proceeding is litigation to determine whether a decedent left a valid will…. [and] may, but need not, involve a request for appointment of a personal representative.”  (Uniform Probate Code, sec. 3-401.)

Although California has not adopted the Uniform Probate Code, California Probate Code section 8000(a) allows for a probate proceeding for the sole purpose of admitting a will to probate.  In practice, however, this process is uncommon.  Indeed, some California courts have been unfamiliar with the possibility of opening probate without a full probate administration including the appointment of a personal representative.  The authors and their colleagues have encountered seasoned judges and probate examiners in multiple California courts who were at first skeptical that a probate petition can be initiated under applicable law for the sole purpose of admitting a will to probate.  Yet there is ample legal authority for a limited probate proceeding, and by presenting this authority to courts in California, the authors have successfully admitted wills to probate without full administration and without the appointment of a personal representative.

California Probate Code section 8000(a) provides in pertinent part:

1. At any time after a decedent’s death, any interested person may commence proceedings for administration of the estate of the decedent by a petition to the court for an order determining the date and place of the decedent’s death and for either or both of the following:
   1. Appointment of a personal representative.
   2. Probate of a decedent’s will.

Cal. Prob. Code § 8000(a) (emphasis added).  The text of the statute explicitly allows for the probate of a decedent’s will either with or without the appointment of a personal representative (and vice versa).  (See Kobzoff v. Los Angeles County Harbor/UCLA Medical Center (1998) 19 Cal.4th 851, 860-61 [Courts “must look to the statute’s words and give them their usual and ordinary meaning”; “[i]f the plain language of a statute is unambiguous, no court need, or should, go beyond that pure expression of legislative intent.”].)  The use of the disjunctive “or” in California Probate Code section 8000(a) reflects the legislature’s intent to allow a petition for probate of a will as a stand-alone petition.  Under the statute, appointment of a personal representative is not required.  (See, e.g., Kray Cabling Co. v. County of Contra Costa (1995) 39 Cal.App.4th 1588, 1593 [distinguishing statute’s use of conjunctive “and” from disjunctive “or”; “[i]n the former the public entity must act after both events occur, and in the latter either event allows an action.”].)  In fact, requiring appointment of a personal representative every time a petition for probate is filed would render the “either or both” language in section 8000(a) superfluous, and superfluity is to be avoided when interpreting statutes.  (See Dix v. Superior Court (1991) 53 Cal.3d 442, 459 [“Where reasonably possible, we avoid statutory constructions that render particular provisions superfluous or unnecessary.”].)

California Probate Code section 8007(a) further supports a limited probate proceeding.  That section provides: “[e]xcept as provided in subdivision (b), an order admitting a will to probate or appointing a personal representative, when it becomes final, is a conclusive determination of the jurisdiction of the court and cannot be collaterally attacked.”  Cal. Prob. Code § 8007(a) (emphasis added).  Applying the rules of statutory construction discussed above, this section further supports that an order admitting a will to probate need not appoint a personal representative.

Leading California treatises support this practice as well.  The Continuing Education of the Bar treatise on California Decedent Estate Practice provides that an interested person may “petition the court for appointment of a personal representative or to probate the decedent’s will.”  (Cal. Decedent Estate Practice § 7.8 (2d ed. Cal. CEB 2020) (emphasis added).)  California Civil Practice on Probate and Trust Proceedings likewise provides that the probate petition “must request either appointment of a personal representative, probate of the decedent’s will, or both.”  (Cal. Civ. Prac. Probate and Trust Proceedings § 9.4 (emphasis added).)

Finally, California case law supports this procedure.  In In re Bloom’s Estate, 213 Cal. 575 (1931), the executor of the decedent’s will filed a petition to admit a will to probate, apparently without seeking letters of administration for a personal representative.  (Id. at 577.)  When reviewing the petition, the California Supreme Court opined, “[a] proceeding for the probate of a will is one instituted for the purpose of establishing the status of a written instrument” and that “the order admitting the same to probate is conclusive in subsequent proceedings as to the ultimate fact of the will.”  (Id. at 578 [citing State of California v. McGlynn (1862) 20 Cal. 233; Estate of Parsons (1925) 196 Cal. 294].)  Although nearly a century old, In re Bloom remains valid legal precedent and controlling authority in California courts.

Notwithstanding this body of law, some probate courts have been reluctant to admit a will for probate without appointing a personal representative.  In particular, courts have expressed concern that they will be unable to fulfill their supervisory responsibilities such as protecting the beneficiaries, heirs, or creditors of the estate.  But these concerns can be addressed.  In a “limited probate petition” scenario, the interests of beneficiaries or heirs of the decedent’s estate will receive notice of the petition, and the publication requirements to submit the will to probate must still be satisfied.  With respect to creditors, the courts’ supervisory role to protect creditors and the creditor’s claim bar date is not triggered unless and until a personal representative is appointed.  (See Cal. Prob. Code § 9050(a), which requires “the personal representative [to] give notice of administration of the estate to the known or reasonably ascertainable creditors of the decedent.”).  Further, a creditor would not be precluded from filing a petition to administer the decedent’s estate if necessary to preserve a claim.  Similarly, if non-trust assets that require a probate proceeding are later discovered, an interested party may file a petition to be appointed to administer the decedent’s estate.

Moreover, those types of concerns do not overcome the express language in the California Probate Code which clearly authorizes a probate proceeding for the limited purpose of admitting a will to probate.

CONCLUSION

While exercising a power of appointment through a will may require that the powerholder’s will be admitted into probate, estate planning professionals can limit the proceeding to achieve the desired outcome of validating the will efficiently and effectively, without a full probate administration.

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[1] A “testamentary” power of appointment is exercisable upon the death of the powerholder, as opposed to an “inter vivos” power of appointment which is exercisable while the powerholder is living. For a discussion on the merits of exercising a testamentary power of appointment by will, see Catch v. Phillips (1999) 73 Cal.App.4th 648, 659, as modified (July 27, 1999).

[2] To avoid requiring the powerholder’s will be admitted to probate, many practitioners provide that the power of appointment be exercised by a written instrument other than a will or codicil, specifically referring to the power, signed by the powerholder, and acknowledged before a notary public. (See, e.g., Cal. Prob. Code §§ 600 et seq.) However, there are valid reasons for having a power of appointment exercisable by will, including procedural safeguards such as the legal formalities of executing a will (e.g., two witnesses, attestation clause, etc.) and the court oversight of a probate administration.

[3] Those risks may include distributing assets to the wrong beneficiary if the instrument exercising the power of appointment is later determined to not be the powerholder’s final will.