Receipt And Release Of Trustee’s Liability

Sometimes the trustees in a particular legal formality may ask the beneficiaries of the contract or agreement to provide them with an acknowledgment of the final distribution of the release of the liability of the trustee. However, according to the California Probate Code Section 16004.5, the acceptance or receipt should be transferred voluntarily by the beneficiary to the trustee. This article and subsection came into effect after then similar case of Bellows vs. Bellows.

legal formality

Bellows vs. Bellows

The way this whole code came into effect was with thorough and considerate observations from the Bellows vs. Bellows case. It was a dispute between the two sons of Beverly Bellows – Fred and Donald. According to Beverly’s will, Fred would’ve become the sole trustee with the rest of the assets would’ve been divided equally to Fred and to a “special needs trust” which was in the name of Donald. Following the death of their father, Donald asked Fred for his share of the trust. He sought accounting and distribution. Fred, on order of the court, paid Donald his share within 10-days. However, Donald’s attorney sent the check back attesting that Fred had illegally paid his attorney’s fees from the trust before equally dividing it. Despite explaining it to Donald’s attorney why it was proper, Fred later ended up paying the actual amount. Donald proceeded to cash the cheque sent to him, but return a signed copy of the receipt. Instead of taking the court’s direction and sending Fred a signed copy of the receipt and release of trustee, he further induced the court and asked Fred to provide a full accounting alongside a cheque to be provide to him and his attorney which was the actual half of the assets left after the death of their father. Fred tried to contest this but failed. The court’s directions were as follows – “Fred was bound to make distributions of the payment without any strings attached. He was not entitled to condition the payments according to the release of other claims or release of his liability”.

This goes on to say that, trustees should never account for the distribution according to the sign of the release.