Invalidating an irrevocable trust

In the settlement agreement, Josephine represented that she was the sole acting trustee of the Family Trust, and in her capacity as such and on behalf of all successor trustees, agreed “not [to] sell, encumber, lease, rent, transfer, or otherwise take any action affecting any real property of the Family Trust without prior notice to Gina ․ and Janice ․, as provided herein.”Josephine died on October 29, 2009.

On November 12, 2009, Janice provided Gina with two “Notification[s] by Trustee” as required under section 16061.7—one for the Family Trust and one for the Survivor's Trust.

The first cause of action alleged Josephine “lacked the requisite mental capacity” at the time she executed the Fourth Amendment.

The second cause of action alleged the Fourth and Fifth Amendments were the product of defendants' undue influence over Josephine.

Under sections 1720 a beneficiary lacks standing to challenge a trust so long as the “trust is revocable and the person holding the power to revoke the trust is competent.” (§ 15800, italics added.) Here, Gina petitioned the trial court in 2005 to confirm her appointment as an acting co-trustee based on Josephine's alleged incompetency and defendants' alleged undue influence over her.

The allegation of Josephine's incompetency takes this matter outside the terms of section 15800.

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She did not file any separate statement in opposition to the motion, dispute any of the undisputed material facts, or present any of her own additional disputed facts. App.4th 1144, 1157.) The prejudice may be factual in nature or compromise the presentation of a defense. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624.)In support of their assertion that Gina's action is barred by the affirmative defense of laches, defendants relied on the following undisputed facts: Gina was aware of the alleged wrongdoing she complains of in the underlying petition by the time she filed her original petition in 2005; Gina became aware of the Fourth and Fifth Amendments to the Survivor's Trust during the course of litigating the original petition; Josephine died in October 2009; and Gina filed the underlying action on March 9, 2010. Accordingly, there is no dispute that Gina knew or should have known of the facts giving rise to the causes of action no later than August 2006, yet delayed in filing the underlying petition until March 2010, after Josephine's death. Board of Supervisors (1989) 49 Cal.3d 432, 438 [“contentions based on a lack of standing involve jurisdictional challenges and may be raised at any time in the proceeding”].) Moreover, defendants addressed Gina's standing in their respondent's brief. Finally, Gina's failure to bring the action until after Josephine had passed away was necessarily prejudicial where, as here, each and every cause of action set forth in the underlying petition centered on Josephine—her mental capacity, defendant's influence over her, and her understanding of the Fourth and Fifth Amendments and her estate. The balance of the trust estate was allocated to the Family Trust.Upon Josephine's death, all remaining assets of the Survivor's Trust were to be distributed to the beneficiaries of the Family Trust as follows: one-half to Janice; and one-half to Gina.The seventh “cause of action” sought imposition of a constructive trust. The eighth cause of action alleged Josephine was mistaken as to the nature and extent of her assets at the time she executed the Fourth and Fifth Amendments. In 2001, Josephine executed a fourth amendment to the Survivor's Trust (Fourth Amendment), eliminating Gina as a beneficiary and naming Janice as the sole successor trustee.

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