How California Is Fine-Tuning Trust And Estate Administration

The CPC requires that notice be provided to trust beneficiaries for a multitude of proceedings and actions, including, for instance, when a trustee seeks modification of an irrevocable trust. However, as the legislative materials for AB-565 note, and as California practitioners are well aware, such notice “can often be complicated, particularly if those interest holders are not legally able to accept notice, such as minors, or unknown individuals.” Under California law, virtual representation was both limited and complex.

AB-565 thus seeks to “clarify and streamline” notice in trust proceedings by authorizing certain individuals to stand in the shoes of certain other individuals who would otherwise be entitled to notice of the proceedings. The revised Section 15804 considerably expands the principle of virtual representation, providing that certain categories of individuals can “represent and bind another person” who would also be entitled to notice. The new statute includes both a list of individuals that may represent others (parent-child; conservator-conservatee; guardian-ward, as examples) and, importantly, generally provides that unless otherwise represented, a minor, incapacitated person, unborn person or person whose identity or location is unknown may be “represented and bound by another person having a substantially identical interest with respect to the particular question or dispute.”

AB-565 is likely to have a marginal impact on smoothing the notice process in simple trust proceedings. Trusts at times have dozens of beneficiaries, including multiple family members who are identically situated with regard to a particular action or proceeding. Trustees and their counsel will be happy to avoid the hassle of notice to a minor beneficiary, for example, when notice to their parents has already been provided. As a consequence, AB-565 will likely reduce friction for uncontroversial questions of administration. Participants in a trust proceeding will also be less likely to seek the appointment of a guardian ad litem for minors, incapacitated persons, unborn persons and unascertained persons, which can be time and resource consuming.

Of particular interest is a subdivision in the new Section 15804 that allows for virtual representation of potential appointees under a holder of a power of appointment by a holder of such powers. This change may make holders of such power more likely to exercise them (and planners more likely to prepare them), if the whole universe of permissible appointees need not receive notice when administrative matters arise.

With that said, careful attorneys are likely to avoid reliance on the new virtual representation rules and still provide full notice, thereby avoiding potential arguments regarding lack of notice, especially in divisive matters or contested litigation. For instance, an undisclosed conflict of interest between a beneficiary and their representative could result in costly future litigation involving the trust. Thus, it would be surprising if litigators were to adopt the revised notice rules wholesale and without hesitation, given this potential cost compared to the benefits of avoiding notice to certain beneficiaries. 

California lawmakers undoubtedly hope that AB-565 will help California become a more attractive state in which to establish a trust. California frequently competes with other jurisdictions (Nevada, Wyoming, South Dakota and Delaware, to name a few) that have less burdensome rules for trust administration (and, at times, less burdensome taxation). Virtual representation is an effort to reduce the friction of administration and make California more appealing to settlors, though practitioners may not rush to take advantage of the rules until courts provide additional clarification. 

AB-1521

Among a suite of more substantive changes to the law, AB-1521 added a new item to the list of duties of a personal representative administering an estate. For estates for which letters are issued on or after Jan. 1, 2026, under the revised Probate Code Section 9202, a personal representative must within 90 days of the issuance of letters notify the California Director of Child Support Services (the agency responsible for enforcing child support orders) if the personal representative knows or has reason to believe the decedent had an existing child support obligation at the time of their death. The bill also provides that a local child support agency then has four months to assert a claim after receiving notice of the decedent's death.

These rules, added as subdivision (e) of Probate Code Section 9202, are consistent with the 90-day deadlines for the personal representative's duty, in some circumstances, to notify the Director of the California Victim Compensation Board and Director of Health Care Services of a decedent's death, and the four-month deadlines for those agencies to pursue actions thereunder.

For estates to which this new rule applies, it's unlikely to be prohibitively burdensome. Indeed, legislative materials refer to the changes made by the bill as providing for “minor clean-up amendments to existing law” and “modest updates” to California's policies. On the other hand, AB-1521 will ideally and likely bring additional certainty and closure to estates of decedents with unpaid child support obligations, as it provides an affirmative deadline by which the local agency can bring a claim. With the clearly established four-month deadline, personal representatives and their attorneys may take comfort in knowing that additional claims may not postpone or frustrate the closing of an estate.