Legal principles can be complicated, but not always. For example, here’s one that’s pretty straightforward: if you are going to ask a court to protect your rights, you’d better have some rights to protect.

That was the lesson learned by the plaintiff in a case recently decided by the California Court of Appeals (Barefoot v. Jennings).

Joan Mauri Barefoot ("Joan") was one of six children in the Maynord family. Joan's parents, Joan Lee Maynord ("Mrs. Maynord") and Robert Maynord,  residents of Tuolumne County, established a trust in 1986. After Mr. Maynord’s death in 1993, Mrs. Maynord served as the sole trustor.

Mrs. Maynord was very active in managing the trust, because by 2013 she had amended or restated the trust 16 times. Over the next three years she executed eight more amendments and restatements, with the 24th completed prior to her death at 84 in 2016. (Amending her trust was just one of her passions. Mrs. Maynord also ran a treatment center for addicts, took canoe trips into the wilderness, and at 72 started riding a Harley.)

In the 16th amendment to her trust, Mrs. Maynord expressly disinherited her daughter Joan by removing her as a beneficiary of the trust and as a successor trustee.

Following her mother’s death, Joan filed a lawsuit in Tuolumne County Probate Court, challenging the 17th through 24th amendments. If successful, her lawsuit would have left in place the 16th amendment, under which she was both a beneficiary and successor trustee.

Joan argued that the amendments she challenged were not valid because her mother was “not of sound and disposing mind” when she made the changes, and thus lacked the “requisite mental capacity to amend the Trust.” She also claimed her mother was subject to undue influence and fraud by some of her siblings.

The courts typically require that a party to a lawsuit have “standing” – a personal legal interest in the matter being litigated that gives them the right to participate in the case. Joan argued that she had standing to sue because she was Mrs. Maynord’s daughter and had an interest in the proper administration of her estate, and because she was a beneficiary and successor trustee until the 16th amendment was executed.

The probate court disagreed. It looked at “the plain language of the statute” that determines who can challenge a trust, and determined that the law clearly limits that right to “a trustee or beneficiary of a trust.”

While Joan had been a trustee in 2013, prior to the last eight amendments made by her mother, she no longer held that status when she filed her lawsuit, and thus lacked standing to attack that trust.

Neither the probate court nor the court of appeals accepted her argument that her challenging the last 8 amendments (though she is no longer a beneficiary of the trust) gave her the standing to bring the action.

The court noted that she could have pursued other legal avenues to challenge the trust, but failed to do so. For example, the court said that she could have raised the issue of incompetency while her mother was still alive.

The court also pointed out that the fact that a person has been named a beneficiary of a revocable trust gives that person merely a “potential” interest in the trust’s assets, which can “evaporate in a moment at the whim” of the settlor, the individual who establishes and manages the trust – as demonstrated by the prolific amendments made by Mrs. Maynord during her lifetime.

Any challenge to a trust, therefore, must address the most recent version of the trust, because all earlier versions were invalidated by the decisions of the settlor.

The appellate judges upheld the probate court’s ruling that Joan's attempt to roll back the estate to the version outlined in the 16th had no basis in law. They also ordered her to pay the costs incurred by the respondents in her appeal.

How far other appellate courts will adopt the Barefoot decision remains to be seen, as many probate litigators believe that a disinherited beneficiary should be able to challenge the estate planning document procured by fraud or undue influence. 

Lynda I. Chung