SECTIONS 19400-19403 - California Statutes

PROBATE CODE

SECTION 19400-19403

19400. Subject to Section 366.2 of the Code of Civil Procedure, if
there is no proceeding to administer the estate of the deceased
settlor, and if the trustee does not file a proposed notice to
creditors pursuant to Section 19003 and does not publish notice to
creditors pursuant to Chapter 3 (commencing with Section 19040), then
a beneficiary of the trust to whom payment, delivery, or transfer of
the deceased settlor's property is made pursuant to the terms of the
trust is personally liable, to the extent provided in Section 19402,
for the unsecured claims of the creditors of the deceased settlor's
estate.

19401. Subject to Section 19402, if the trustee filed a proposed
notice to creditors pursuant to Section 19003 and published notice to
creditors pursuant to Section 19040, and if the identity of the
creditor was known to, or reasonably ascertainable by, the trustee
within four months of the first publication of notice pursuant to
Section 19040, then a person to whom property is distributed is
personally liable for the claim of the creditor, without a claim
first having been filed, if all of the following conditions are
satisfied:
(a) The claim of the creditor was not merely conjectural.
(b) Notice to the creditor was not given to the creditor under
Chapter 4 (commencing with Section 19050) and neither the creditor
nor the attorney representing the creditor in the matter had actual
knowledge of the administration of the trust estate sooner than one
year after the date of first publication of notice pursuant to
Section 19040.
(c) The statute of limitations applicable to the claim under
Section 366.2 of the Code of Civil Procedure has not expired at the
time of commencement of an action under this section.

19402. (a) In any action under this chapter, subject to Section
366.2 of the Code of Civil Procedure, the distributee may assert any
defenses, cross-complaints, or setoffs that would have been available
to the deceased settlor if the settlor had not died.
(b) Personal liability under this chapter is applicable only to
the extent the claim of the creditor cannot be satisfied out of the
trust estate of the deceased settlor and is limited to a pro rata
portion of the claim of the creditor, based on the proportion that
the value of the property distributed to the person out of the trust
estate bears to the total value of all property distributed to all
persons out of the trust estate. Personal liability under this
chapter for all claims of all creditors shall not exceed the value of
the property distributed to the person out of the trust estate. As
used in this chapter, the value of the property is the fair market
value of the property on the date of its distribution, less the
amount of any liens and encumbrances on the property at that time.

19403. Nothing in this chapter affects the rights of a purchaser or
encumbrancer of property in good faith and for value from a person
who is personally liable under this section.