Probate: Beneficiary Presumed To Be Missing Or Deceased Surfaces In Time To Unsuccessfully Object To Settlement Of Trust And Approval Of $295,000 In Attorney Fees To Trustee

Trustee’s Efforts Were Reasonable And Appropriate For The Benefit Of The Trust And Resulted In Restoration Of Beneficiary’s Trust Benefits.

            Father of two sons was trustee to the trust established in his late wife’s name in Polonsky v. Polonsky, Case Nos. B290480 and B293958 (2d Dist., Div. 3 November 22, 2019) (unpublished).  The trust held a 50% undivided interest in the Beverly Hills family home for the benefit of the two sons.  The father owned the other 50% of the property. 

            Father remarried sometime later and eventually executed a grant deed to convey the son’s 50% interest in the property held in the trust to himself.  To replace his sons’ interest in the property, Father formed a new trust with the intention of funding it with $747,500, which equated to 50% of the appraised value of the property at the time of transfer.  However, father only funded the new trust with $100,000 before passing away.

            With one son being deceased, the other son missing or deceased, and no trustee to administer the original trust upon Father’s passing, the former wife of the missing son stepped in and became appointed trustee.  Once appointed, she sought restoration of the 50% property interest to the trust pursuant to Probate Code section 850. 

            After two years of litigation, she reached a settlement with Father’s new wife which restored to the trust, for her former husband’s benefit, the value of his interest in the Beverly Hills property at the time Father executed the grant deed.

            The missing son surfaced and objected to the settlement agreement and trustee’s attorney fees.  However, at the hearing for approval of the settlement agreement, he admitted that he wanted the settlement agreement to be approved.  As to the attorney fees, beneficiary did not claim they were excessive.  Rather, he claimed Trustee had obtained no benefit for the trust.  The trial court approved both the settlement agreement and the attorney fees.  Beneficiary appealed.

            The 2/3 DCA found no abuse of discretion.  Beneficiary admitted he wanted the settlement agreement approved, and his argument that fees should not be awarded because Trustee had not obtained a benefit for the trust was without merit.  It was Trustee’s actions that caused beneficiary’s trust benefits to be restored.