(a) It shall be unlawful for a person to recommend to a prospective trustor any person to serve as trustee with knowledge or having reason to believe that the proposed trustee is insolvent or is about to become insolvent.

For purposes of this section, “insolvent” means a person who has ceased to pay that person’s debts as they become due or whose liabilities exceed that person’s assets.

Terms Used In California Business and Professions Code 17530.1

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • person: includes any individual, partnership, firm, association, or corporation. See California Business and Professions Code 17506
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Trustee: A person or institution holding and administering property in trust.
  • Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.

(b) The provisions of this section shall not apply to any trustee named in any deed of trust or mortgage which secures a note or evidence of indebtedness on real property when such trustee acts solely in that capacity.

(Added by Stats. 1979, Ch. 763.)

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