Even a court order approving an accounting may not protect a California fiduciary if the accounting is inaccurate. That’s the upshot of Hudson v. Foster (2021) 68 Cal.App.5th 640, a recent California Court of Appeal decision involving a conservatorship.
The conservatee in this case consented to the conservator’s account and four years passed before
Many California trusts confer a lifetime right to income on a person (often the surviving spouse) with the remainder passing to designated survivors upon the income beneficiary’s death. When the income beneficiary dies, is it too late for the executor of the beneficiary’s estate to request an accounting for the purpose of evaluating whether the
Can a California trustee require a beneficiary to sign a release in order to get a distribution from a trust? A question like this appeared recently on the AVVO “Free Q&A” page and makes for a perfect blog topic.
Trustees understandably want to wrap up trust administration without having to worry about being sued by beneficiaries. When a beneficiary appears to be litigious, the trustee may want to dangle a preliminary or final asset distribution as a carrot to get the beneficiary to sign a release. Yet, since the trustee is a fiduciary, California law does not give a trustee unfettered discretion to insist on releases. An effort to prevent trust litigation could end up sparking such litigation.
This blog post views a trustee’s fee from the beneficiary’s perspective. Under California law, a trustee generally can set his or her own fee and collect it without prior disclosure to the beneficiaries. What can a beneficiary, who sees a hand reaching too greedily in the trust cookie jar, do in response?
We discussed best practices for a trustee when claiming a fee in a prior post and now consider how a beneficiary can monitor, evaluate and object to a trustee’s fee.
American courts (including our California state courts), in contrast to courts in England, do not typically award attorneys’ fees to a lawsuit’s “victor.” There are, of course, exceptions to this so-called “American Rule.” Among them is the “common fund” exception, which provides that one who incurs fees winning a lawsuit that creates a fund for others may require those passive beneficiaries to bear a fair share of the litigation costs. As the word “fund” suggests, the benefit must be a tangible, easily calculable sum of money. Courts have applied this exception to will and trust disputes where one beneficiary’s litigation causes other beneficiaries to receive a larger inheritance than they otherwise would have received.
But what happens when a trust beneficiary prevails in a lawsuit that doesn’t result in a tangible, monetary benefit but rather one such as removing an incompetent trustee or causing a trustee to prepare an accounting? May beneficiaries who receive such benefits, but who take no part in the litigation, be required to pay for a portion of the litigating beneficiary’s legal expenses? Last month the California Court of Appeal, in Smith v. Szeyller (2019) 31 Cal.App.5th 450, answered the question with a tantalizing “very possibly.”
Sometimes stepmothers are just misunderstood.
Babbitt v. Superior Court (2016) 246 Cal.App.4th 1135, recently decided by the California Court of Appeal, involves one of the fact patterns that we often see in California trust litigation: children from a decedent’s prior marriage have conflict with their biological parent’s surviving spouse. In other words, after dad passes away, stepmom and the kids do not play nicely.
At the Sacramento Estate Planning Council’s 2016 Technical Forum on Tuesday an elderly gentleman sitting next to me said “old accountants never die, they just lose their balance” and “old attorneys just lose their appeal(s).” Sometimes both happen when an unbalanced accounting results in a lost appeal. The California Court of Appeal issued a rare decision on January 6, 2016 concerning trust accountings, finding in Gray v. Jewish Federation of Palm Springs and Desert Area that Probate Code section 16373 allows a trustee to rob Peter to pay Paul (as long as Peter gets his money back eventually).