What Powers Does a Trustee Have in Trust Created by Will?

This issue was the subject of the recent California appellate court decision in Estate of Barry Tarlow.

The issue on appeal was If a will creates a trust and names a trustee, does that trustee have standing to seek a court order determining their right to take charge of the trust assets?

The appellate court held that they do. 

Probate Code section 11700 provides that any person claiming to be a beneficiary or otherwise entitled to distribution of a share of the estate, may file a petition for a court determination of the persons entitled to distribution of the decedent’s estate.

As explained below, when a will creates a trust, the named trustee is the person entitled to receive the assets intended to fund the trust, and is therefore a person claiming to be entitled to distribution of a share of the estate. 

Thus, the trustee may file a petition and the court must then determine the validity of the trustee’s claim. 

Attorney Barry Tarlow executed a will in November 2005, to which he made minor modifications in 2006. He made a series of specific gifts, then left the balance of his estate (Estate) to be evenly divided between his sister, respondent Barbara Tarlow Rapposelli (Barbara), and their brother, respondent Gerald Tarlow (Gerald), “in equal shares.” 

According to the terms of the will, Gerald was to receive his share “outright and free of trust,” but Barbara’s share was to be deposited in the “Barbara Tarlow Trust” (Trust). 

The will named a trustee for the Trust, appellant David Henry Simon (Simon), who was to distribute Trust funds to Barbara as he felt necessary for her support, maintenance, health and education.

On Barbara’s death, all Trust assets would be distributed to Gerald outright; if Gerald had already died, the assets would be distributed to a donor advised fund at Fidelity Charitable Gift Fund (Fidelity Fund). 

Barry Tarlow died on April 30, 2021. The will nominated Simon as executor, but Simon declined that role at the request of Barbara and Gerald. 

This allowed Barbara and Gerald to become the executors themselves, while Simon retained his more limited role as trustee of the Trust. 

The will was admitted to probate in July 2021. Barbara’s share of the residual interest in the Estate, the portion intended to fund the Trust, was valued at more than $20 million. 

In December 2021, Barbara contracted to buy the Fidelity Fund’s remainder interest in the Trust for $100,000. The sale contract notes that because Gerald is five years younger than Barbara, the price reflects a discount based on the likelihood that Barbara would predecease Gerald and Fidelity Fund’s interest would then be extinguished. 

It also records Barbara’s intent to petition for modification of the Trust, and her intent to disclaim her interest in the Trust if that petition should prove unsuccessful. 

In January 2022, Barbara and Gerald filed an ex parte petition to be appointed as trustees of the Trust, replacing Simon, and to modify the terms of the Trust to allow Barbara to decide how the trust assets would be distributed after her death if Gerald predeceased her. 

Simon objected, and the trial court denied the petition without prejudice because the requirements for an ex parte application had not been met. 

In July 2022, Barbara and Gerald filed a petition for final distribution of the Estate and payment of attorney’s fees under section 11600.

The petition stated that Barbara had disclaimed her share of the residue of the Estate, and Gerald disclaimed his interest in the tangible personal property of the Estate, a portion of which had already been sold. 

Under the terms of the will, this meant Barbara would get Gerald’s share of the tangible personal property in the Estate, and Gerald would get Barbara’s share of everything else. 

In September 2022, Simon objected to Barbara and Gerald’s petition, arguing Barbara had not properly disclaimed her interest and authorizing the distribution would improperly deprive the Trust of funds for both Barbara and the Fidelity Fund.

In October 2022, Simon filed his own petition under section 11700, asking the court to distribute Barbara’s interest to him as trustee of the Trust, and to rescind Barbara’s purchase of the Fidelity Fund’s interest in the Trust as an illegal contract. 

Barbara and Gerald demurred to Simon’s petition on the grounds that Simon lacked standing to seek relief against Barbara. The trial court sustained Barbara and Gerald’s demurrer, with leave to amend, ruling Simon had no standing to file a petition.

Simon filed an amended petition, again asking the court to determine that Barbara had neither properly disclaimed her share of the residue of the Estate, nor properly purchased Fidelity Fund’s remainder interest in that share. Barbara and Gerald again demurred. 

The trial court sustained the demurrer, without leave to amend, finding that Simon had not changed his petition except to add further legal argument which it found unpersuasive. 



Simon timely appealed. 

Simon argued that a trial court is required to hold an evidentiary hearing on a petition filed under section 11700, so long as the petitioner pleads a relationship to the decedent and the basis for his claim. 

He also argued that as trustee of the Trust, he has standing under two separate portions of the Probate Code: section 11700 itself, as well as section 48. 

Finally, he argued that the trial court improperly assumed the validity of Barbara’s disclaimer. 

The appellate court held that the undisputed facts confer standing on Simon under section 11700. 

Probate proceedings are statutory; the language of the applicable statute defines the court’s powers and responsibilities. 

Section 11700 provides: At any time after letters are first issued to a general personal representative and before an order for final distribution is made, the personal representative, or any person claiming to be a beneficiary or otherwise entitled to distribution of a share of the estate, may file a petition for a court determination of the persons entitled to distribution of the decedent’s estate. The petition shall include a statement of the basis for the petitioner’s claim.

The “primary purpose” of this section is to establish which persons are proper heirs of an estate and therefore entitled to a distribution. 

A proceeding under this section is “permissive”; if no such petition is filed, the court may determine who is entitled to distribution in a final distribution order. 

A proceeding under section 11700 is a specialized proceeding in rem. 

It clarifies the status of the estate, determining who has valid claims to distribution of estate assets and the priority of those claims. 

It does not declare any party’s personal rights or obligations concerning any other party; it only declares their respective relationships to the estate. 

Section 11700, as case law explains, provides a means for the court to adjudicate the rights of an heir, devisee, or legatee to a share of the estate. 

An “heir” is a person “entitled to take property of the decedent by intestate succession” under the Probate Code. 

In contrast, a “devisee” is a person designated in a will” as the recipient of a “devise,” or gift of property. 

Where a will creates a trust, the trustee is a devisee under the will because they are the person designated to receive the trust property from the estate and administer it according to the terms of the bequest. 

Section 34, subdivision (b) provides that in the case of a devise to a trustee on trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.” 

The trustee’s legal title to the trust property vests as of the date of death. 

Here, because Simon is the named trustee of the Trust, he is a devisee under the will, entitled to receive and administer the trust property from the Estate, and therefore is a person claiming to be entitled to distribution of a share of the estate under section 11700. 

Thus, Simon is one of those persons who may file a petition, under the statute. He has standing to proceed under section 11700. 

Barbara and Gerald argue that Barbara has a statutory right to disclaim the Trust, her disclaimer should be presumed valid, and Simon cannot force her to accept a gift she does not want. 

However, the presumption that disclaimers are valid is not conclusive. 

Barbara and Gerald also argue Simon only has standing if he represents the pecuniary interests of a beneficiary of the Estate. For this proposition, they rely on section 48 and case law. However, section 48 is a definitional provision that gives the meaning of the term “interested person.” 

This term does not appear in section 11700, and therefore section 48 does not apply. Likewise, none of the cases respondents cite involve section 11700.  

Simon’s standing to file a petition under section 11700 is defined by the terms of that section, not other sections. 

Finally, Barbara and Gerald argue that Simon has failed to properly plead the invalidity of Barbara’s disclaimer, and that there is no factual dispute requiring an evidentiary hearing. 

We need not discuss that argument because Simon need not plead facts concerning the disclaimer to establish his standing under section 11700. 

That section provides standing to any person claiming to be entitled to distribution of a share of the estate.

It is undisputed that Simon was named trustee of the Trust and therefore is a person with a claim to be entitled to distribution of a share of the Estate. The validity of Simon’s claim is to be determined by the proceedings on his petition. 

Barbara and Gerald cite no authority which requires Simon to preemptively plead facts invalidating Barbara’s disclaimer. 

Probate proceedings are statutory in nature, and standing is determined by the applicable statute. 

Here, the proceeding before the trial court was a petition under section 11700. That section authorizes any person who has a claim to distribution from an estate to file a petition. Simon has such a claim. Therefore, he has standing to bring the petition. 

Whether Barbara’s disclaimer invalidates Simon’s claim goes to the merits of the petition. It does not affect Simon’s standing. 

LESSONS:

1.         The trustee’s legal title to the trust property vests as of the date of death. 

2.         Probate proceedings are statutory in nature, and standing is determined by the applicable statute. 

3.         The proceeding before the trial court was a petition under Probate Code, section 11700. That section authorizes any person who has a claim to distribution from an estate to file a petition. 

4.         An “heir” is a person “entitled to take property of the decedent by intestate succession” under the Probate Code. 

5.         In contrast, a “devisee” is a person designated in a will” as the recipient of a “devise,” or gift of property.