Los Angeles County Bar Trust and Estates Section Presentation – Fiduciary Accounts: Requirements, Issues and Common Mistakes.

Firm partner, Yasha Bronshteyn, litigating Conservatorship, Trust Matters, and Accounting Matters attended the Los Angeles County Bar Association Presentation on September 13, 2018, at the Los Angeles Superior Court.  The presentation concerned different types of fiduciary accounts, including trust accounts, conservatorship accounts, and conservatorship accounts.  Turnout from our esteemed probate colleagues was excellent.  Also in attendance were Supervising Probate Judge David J. Cowan (Department 3) and probate Judge Paul T. Suzuki (Department 79).

If you or someone you know is dealing with a dispute over the administration or execution of trust or estate in California, you should contact an experienced trusts and estates litigation attorney to ensure your interests are represented.  Attorney Bronshteyn also serves on the probate volunteer panel of the Los Angeles Superior Court, and has represented beneficiaries, executors, administrators, trustees, conservators, and conservatees, in court proceedings.  Contact us by calling (310) 914-3222 in Los Angeles,  (818) 787-1011 in Westlake Village, (714) 465-6566 in Orange County, or by using our online contact form.

Recently the appellate court decided a very impactful case in the area of trust litigation.  The case is known as Barefoot v. Jennings, 2018 WL 4292450.  Appellant, Joan Mauri Barefoot, is one of six children of Joan Lee Maynord. Maynord and her former husband, who died in 1993, established the Maynord 1986 Family Trust and Maynord served as the sole trustor following her husband’s death. Starting in August 2013 and continuing through 2016, Maynord executed eight amendments to and restatements of the Family Trust, referred to as the 17th through the 24th Amendments, with the 24th Amendment being the final amendment prior to Maynord’s death. It is in these amendments and restatements in which Appellant’s share of the Family Trust, described in the 16th Amendment, was eliminated and Appellant was both expressly disinherited and removed as successor trustee.

Appellant’s petition challenged the validity of the 17th through the 24th Amendments on three grounds: (1) alleged that Maynord was “not of sound and disposing mind” and thus lacked “mental capacity to amend the Trust”; (2) alleged undue influence on behalf of Respondents, the other children of Maynord, including Shana Wren, the current trustee; and (3) alleged fraud on behalf of Respondents.

With respect to her standing to file the petition, Appellant alleged she was “a person interested in both the devolution of [Maynord’s] estate and the proper administration of the Trust because [appellant] is [Maynord’s] daughter and both the trustee and beneficiary of the Trust before the purported amendments.” She also claimed that she would benefit from a judicial determination that the purported amendments are invalid.

Respondents filed an answer and a motion to dismiss pursuant to Probate Code Section 17200 and 17202, arguing that Appellant lacked standing because she was neither a beneficiary nor a trustee of the Trust as constituted under the 24th Amendment. Appellant opposed the motion, arguing that she was a beneficiary under the 16th Amendment and alleging that the later amendments were invalid. The Trial Court ultimately sided with respondents and dismissed the Appellant’s petition. Appellant filed an amended petition with more facts which was again denied. Appellant then filed an appeal.

Section 17200, subdivision (a) provides, “Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.” Under section 24 subdivision (c), a beneficiary of a trust is “a person to whom a donative transfer of property is made” and “who has any present or future interest, vested or contingent.”

The Appellate Court concluded that Appellants argument that standing exists because she was a beneficiary and trustee of prior versions of the Family Trust is insufficient to support a petition under Section 17200. The Appellate Court interpreted the statute, stating “The plain language of Section 17200 makes clear that only a beneficiary or trustee of a trust can file a petition under Section 17200.” There being no ambiguous language in Section 17200, the Appellate Court felt comfortable interpreting the language as such, in order to “select the construction that comports most closely with Legislature’s apparent intent.” Appellant was not a beneficiary under the current version of the Family Trust, being the 24th Amendment of the Family Trust, since she was expressly disinherited and not named as a trustee. Thus, she lacked standing to proceed with a petition under Section 17200 attacking the Family Trust. The Appellate Court did note that while Appellant may have standing under various other statutes, Section 17200 was not one of them.

The Appellate Court went on to confirm that the conclusion in Drake v. Pinkham (2013) 217 Cal.App.4th 400, that a living but incompetent settlor was not a bar to a beneficiary’s lawsuit did not demonstrate that a former beneficiary challenging the latest version of a trust was entitled to proceed because of their status in the last allegedly valid former trust document.

Time will tell to what extent court follow the Barefoot decision as it appears to be counter intuitive and against public policy for a disinherited beneficiary not to be able to challenge the estate planning documents or trust documents which may have been procured by fraud or undue influence.  

We are here to help you and your loved ones.  To discuss your needs and discover your options, consult the Los Angeles incapacity, conservatorship,  and trust litigation attorneys at Ginzburg & Bronshteyn, LLP.  We serve clients in Los Angeles, Orange County, Ventura County, and throughout Southern and Northern California including Agoura Hills, Beverly Hills, Calabasas, Camarillo, Encino, Hidden Hills, Irvine, Lake Sherwood, Marin County, Mission Viejo, Newport Beach, Oxnard, Palo Alto, Pasadena, San Francisco, San Juan Capistrano, Santa Barbara, Santa Monica, Simi Valley, Tarzana, Thousand Oaks, Torrance, Tustin, Ventura, West Los Angeles, and Woodland Hills. Our attorneys are renowned for producing high quality work and working diligently to achieve our client’s goals. We have developed a reputation for effective representation in complex and sophisticated matters as we guide you through the complex legal process. We are experienced in obtaining and defending against conservatorships. Contact us by calling (310) 914-3222 in Los Angeles, (818) 787-1011 in Westlake Village, (714) 280-0601 in Orange County, (415) 465-6555 in Northern California, or by using our online contact form.

Once again Conservatorships, while intended to exist for the benefit of the protected person, can sometimes become complicated and contentious. If you find yourself in a conservatorship that has become legally combative, consult the conservatorship attorneys at Ginzburg & Bronshteyn. Our experienced Los Angeles conservatorship attorneys are here to help clients in Santa Monica, Ventura County, Orange County, Northern California and throughout Southern California defend their rights under the law. To contact our skilled attorneys, please contact Ginzburg & Bronshteyn, LLP online or call us at (310) 914-3222, (714) 280-0601, or (818) 787-1011.