Although No True Successor Trustee Was Appointed, Legal Services To The Person Administering The Trust Were Proper Because The Services Benefited The Trust And Because Person’s Services Were Ratified Through A Settlement Agreement.
In Orsinger v. Kemp & Associates, Inc., Case No. B303111 (2d Dist., Div. 6 Jan. 20, 2021) (unpublished), son of a couple who set up a family trust was the acting successor trustee and the sole trust beneficiary. Son hired Orsinger to help repair a house (the main asset) and remove squatters, also asking Orsinger to be the executor of his estate and the successor trustee of the family trust. However, son unexpectedly died with no will, no spouse, and no children. Orsinger hired a law firm to assist with trust administration, with the trust taking a lot of time to liquidate before the house was sold. Kemp & Associates, a company specializing in heir location services, notified Orsinger that son’s six intestate heirs assigned a percentage of their inheritance to K&A. K&A objected to a final accounting, contending Orsinger was never appointed successor trustee—an authority issue that initially troubled the probate judge. Eventually, K&A and Orsinger entered into a settlement agreement ratifying his actions as well as indicating he would be paid and non-attorney professional fees would be paid. Orsinger requested approval of $74,970 in fees incurred by the law firm assisting in trust administration, a request honored by the probate judge.
K&A appealed, raising several arguments against the fee award. All of them were dispatched on appeal. First, the fact that Orsinger was never appointed successor trustee was a “form-over-substance argument” which failed because the settlement agreement ratified his actions and the lower court had authority to make a quantum meruit award for the reasonable value of the legal services provided (Prob. Code, §§ 16247, 16243). The probate judge had jurisdiction to award fees given that the settlement agreement stated the parties consented to continuing jurisdiction of the superior court. K&A argued that the trust assets became part of son’s estate upon his death such that title to the assets immediately vested in the son’s intestate heirs. The 2/6 DCA rejected this argument, finding it hyper-technical and waived through the settlement agreement. The probate court had the power to apply equitable principles to determine the entire controversy before it, including the ability to approve payments to counsel aiding administration of the family trust.
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