Restraints That Won't Hold: What Godoy v. Linzner Means for California Fiduciaries and Beneficiaries

Private Wealth Services attorney Madeleine Vasily authored an article published in the Daily Journal examining the California Court of Appeal's decision in Godoy v. Linzner and its implications for trustees, beneficiaries and probate litigators. The article explores how California Civil Code Section 711, which generally voids unreasonable restraints on the transfer of property, is increasingly relevant in the trusts and estates context. Madeleine discusses the Godoy decision, in which the court invalidated a trust amendment that severely restricted beneficiaries' ability to sell inherited property, holding that testamentary restrictions that unreasonably impair marketability may be struck while preserving the underlying gift. She outlines factors courts may consider when evaluating whether a restraint on alienation is unreasonable, including the duration of the restriction, its impact on marketability, the availability of less restrictive alternatives and the extent to which it limits trustee discretion. The article also provides practical guidance for fiduciaries and litigators confronting restrictive trust provisions, emphasizing the importance of seeking court instructions when appropriate and understanding that overly restrictive limitations on the sale or transfer of inherited property may not withstand judicial scrutiny under California law.

READ: Restraints That Won’t Hold: What Godoy v. Linzner Means for California Fiduciaries and Beneficiaries (Subscription required)