Episode 19: Who’s Next? Successor Trustees

[Music] Okay so we're going live and we'll give everybody a couple minutes to get logged on and join us for another live segment hey done today Stuart I'm doing well how much was off doing well I'm doing alright I'm getting over yet another cold it's growing cold in two months trying to stay away from you I know I don't blame you I'd stay away from me too more so than normal I think you look very summery today though thank you yeah thank you all right so let's get started welcome to the stand fight win live stream real lawyers real answers the subject of today's broadcast is successor trustees so we're going to be talking about different aspects of what happens with trusts when a new trustee comes into office and the old trustee either is deceased or resigns or is removed or something along those lines so we have a bunch of questions that we're going to get to but let's start with a case and we'll start with our breaking news and this is an appellate case it comes to us out of the fourth Appellate District and it's Morgan versus Superior Court and let me give you the cite for this this is 23 Cal app v 1026 so that's 23 Cal app v one zero two six and this was decided last year and it's a case that has to do with what happens when a successor trustee takes over a trust the old trustee goes away and the successor trustee now wants the attorneys file so there was an attorney who is representing the prior trustee in in their office and their duties as trustee the new trustee takes over says let me have those trustee files and of course the attorney naturally is gonna say Oh attorney-client privilege I can't hand it over to you but there's something unique when it comes to trust which is when an attorney is representing a trustee that attorney is representing essentially the office of trustee and whoever occupies that office of trustee is going to be the one who has the right to the attorney-client privilege which means that when a new trustee comes into office they have the right to get the file and the communications and everything as that the old trustee had with the attorneys is that a correct statement of anything story that's correct okay so I'm great you just keep them all right I'm going to keep powering through them so when Morgan that was the the topic so you had a new trustee come that came in Beverly was let's took this up just a little bit more for people who don't do this every day so obviously there was a trust and there was a trustee that's right and that trustee had hired a lawyer to help them with the quote unquote trust administration they the the activities that have to take place as a trustee to to properly administer a trust by his terms that's right and this attorney let's call them attorney one attorney one had sent invoices and and has received payments from the trustee over a period of let's just call it several years and so there's a lot of invoices and I'm assuming that lawyer one was very descriptive in the description of what he would do in each one his invoices you know most lawyers put the date down and put down what they've done and how much it's gonna cause the tale description of services they did yes right and so there's there's this issue where there's this lawyer one has a history of invoices that have shown everything that he's done for this trustee during the during that part of the trust administration then for whatever reason this trustee is no longer in office any new successor trustee comes in they have their own lawyer lawyer number two mm-hm and that lawyer no two needs to continue the trust administration and is saying hey lawyer number one send over everything because we're not snoops although maybe a little bit we just want that so we can go through everything and make sure that be what's happened see what's been said see what still needs to be done right as a lawyer number one here miss reads several cases out there and decides that he's going to put his feet on the ground or heels in the ground and not turn over invoices and things like that and and you might pick up a story from there right and so this is where and this had to do with two siblings Tom and Nancy and Nancy was suing Tom Thomas trustee Tom gets removed by the court and one of the reasons he gets removed by the court is because he's using trust monies to fund his own personal defense in the lawsuit which is a big no-no and what was that was that she being a claim against it for breach of fiduciary duty she did there was a trust contest or his breach fiduciary duties there was removal and he was using money to pay for his own personal defense not just trust defense so the problem is is when you have a trustee who's also a beneficiary you have one person wearing two hats their trustee but they're also beneficiary so some of the things that they're doing is appropriate for a trustee to do some of the things is not that's only appropriate for a beneficiary to do so for example if I'm arguing as a beneficiary that I should get 50% of the trust rather than 40% of the trust that's a beneficial argument then the benefits mean personally and if you were making a personal argument as a trustee do you use trust funds to pay the lawyer or to use your own funds to people supposed to use my own funds because it doesn't benefit the trust as a whole so anytime you're using trust money as a trustee it's supposed to be being used to go go towards things that benefits the trust as a whole meaning everybody equally in all those trustee duties that they have so I haven't read the case like you have but I'm starting to anticipate that maybe the descriptions of these invoices from a lawyer may show that all the money didn't go for the trust administration expenditure that's what I'm thinking yes and that's why they're fighting so hard to keep the invoices from coming out and what happened was after at first the court didn't remove Thomas trustee and said no he can stay as trustee as long as he doesn't use any trust funds for his own personal defense his own personal attorneys fees and as long as he doesn't in any way borrow any money from the trust while he's doing this and he doesn't take on any loans on behalf of the trust while he's doing this and the court also required him to file an accounting to show what has happened with the money so the court is seeing that there's this inherent conflict of interest that you do see when a parent nominates one of their children to be trustee and also a beneficiary right and some of the course will bend over backwards some judges just sooo merrily remove the person yeah but other judges I know mom and dad wanted that but what I am gonna order you is if you're gonna do anything from a personal standpoint that's on you if you're doing anything for the trust well you can do that and hey by the way you in accounting so we can see what you've been doing with the money yeah that's funny cuz I think the court was trying to accommodate the fact that they're gonna let the trustees stay as long as he plays by the rules which the trustee should have gotten a hint of oh okay so I just need to play by the rules one of the things the court required is filed as accounting when when the trustee got around to follow the accounting the court said that it was so inadequate that its filing appears to be for the sole purpose of paying lip service to the court's order ooh okay well as soon as you read that you know that you just crossed the line with the court right he went from the court trying to give you the benefit of the doubt to the court now saying okay I've had enough and so at once the court said that the court on its own motion removed the trustee here at a new trustee comes in new trustees which are professional trustees they want all the invoices billing statements fee agreements all that sort of thing that you mentioned before and the court said yes you should get that go ahead and hand that over you know the attorney number one as you put it should be handing that over and the court was very precise about this they wanted to attorney one to hand the information over to the new trustees only because the new trustees are the ones that have the attorney-client privilege and then what the new trustees did with it was their business but the court didn't want attorney one handing it off to the beneficiaries because they don't have attorney-client privilege or even to the attorney for the new trustees just give it to the new trustees that's who should have it and so the minute order is actually quite clear it said all invoices Billings fee agreements copies of checks wire transfers used to pay for any services should go over to the new trustees only so just give it to their to their service so now that didn't happen right so there was a minute order obviously didn't get happen so now they come back in on the next party and that's where you get this dialog case and it's kind of a funny dialogue so I'm gonna play the part of the attorney 1 which is the old trustees counsel and you play the part of the court and there's there's a lesson to be learned here so let's just go through this real quickly so I'm showing up and you know the person the new trustees are saying it's extremely important that we get this information we have to get it and we have to give this information and so you're the court so I look at attorney one who's mr. pack is that right ok so I'm the court I just want to point out for the video that I'm the court judge yeah will you please make your appearance mr. pick appearing on behalf of so the question where the court says is how soon can you provide the records to which the attorney replies which records your honor and you can already tell the courts getting a little tense here the ones I ordered Monday okay so I'm sorry he wouldn't be laughing I mean the ones you ordered Monday question mark you mean my invoices Your Honor the court yes mr. peck peck yeah that's correct so we'll have a formal order today correct question mark we're going to have a formal order as to everything the court has ordered for Monday and today okay and right here I just want to point out the court took a heavy breath it's not in the record but the court took a heavy breath that happened yes okay and the court says the minute orders right here counsel will be happy to give you a copy for your attorneys fees counsel all invoices Billings fee agreements copies of checks and wire transfers used to pay any of the attorneys fees and costs herein oh and also your honor as part of that when the court said on Monday it only goes to mr. Glowacki which is the trustee new trustees attorneys here because obviously mr. Garrett and the new trails on and because the court breathes heavily again and says it's in the order well but is that in the order the court I mean this is this this is one of those patient judges I have seen on a record here I mean yes it's in the order so then he tries again there's a question it only goes to the attorney for the trustee but obviously that attorney wants to see those because that's what he just said I have ordered it I mean this is the patience of Job the patience of Job I don't know who to what judge that says we need to find out who this judges I have ordered it only goes to mr. Glowacki at this time I will order that for Monday and then there's the other counsel pipes in and so then it goes back to the court so when can you have those available as she's directing this question to mr. Peck the attorney number one mr. Peck goes when I get the order your honor actually what the question was it oh yeah yeah I get the order your honor okay so now he's you'd be a little smart with the court yeah we're giving you the minute order today counsel that's fine so when can you have it available I would say that I could go ahead and organize things in terms of like maybe a week from July 4th something of that sort the week of the week of the 10th this is Shakespeare that's so good the court says I mean the court is bending over backwards for this guy and the court says all right Monday the 10th how about the 12th okay two weeks from today everything will be turned over when you say everything you're talking about the invoices not the production of the end of these documents the court I'm talking about everything in the minute order that I made on Monday okay that's all the invoices from his office yes mr. Peck yes we have ordered and you've agreed that all your documents will be provided by July 12th that's correct your honor so I mean you took almost three pages to get to the final answer which is when are you going to hand these things over that I already ordered I mean what this you you go on and on many times about how hard it is for attorneys to just answer the question so this was judged Kim or Hubbard I believe my guy I'm assuming because that's the who the appeal was from she's out of Orange County yeah and you're right she was very very patient I mean the issue was pretty simple handed over and there was even a minute order that said what was supposed to be handed over and yet you have an attorney who's trying to evade the question it's so obvious and you have an attorney that ultimately say well you're honorable wait till we get that order even though the judge has already ordered it here it is now and I mean this judge really was patient but what does that say about the case I mean the thing the thing that I got as soon as I read that and I wasn't there but just reading the transcript I can imagine now when it probably the way we played it out but the first thing I think of is wow this old trustee is in a lot of trouble because you wouldn't be this evasive if there wasn't a problem so there must be a problem and this is the problem I think but trying to be evasive with the court is that like if you've been in order to do something just do it I mean at some point you just can I have to do it now they ended up not turning over the documents because they filed this appeal right and then when I went up to the appellate court the appellate court said it's very basic tenets of trust law that when a new trustee takes over they're entitled to the legal file they inherit the attorney-client privilege and there's actually a provision in this trust which I hadn't seen before Stewart where apparently the trust said the successor truck or the initial trustee is not required to hand over attorney-client privilege document to a new trustee that's what the trust term said and the appellate court said that's against public policy we're not going to enforce that because it would prevent a new trustee from being able to see if there was any damage or harm done by the old trustee if we allowed that to happen and of course they cited to the seminal case of moller which is mo e ller Moeller versus Superior Court from 1997 cite for that is 16 Kao fourth one one to four and that's the seminal case that we all think of as Moeller as the case has said the privileged attorney-client privileged stays with the office of trustee and the new trustee is allowed to pick up that privilege and get to the document so ultimately the court said you have to handover the documents and the court went so far as to say look if you think that you're using an attorney and some of the advice you're getting is trust advice but some of the advice you're getting is personal advice as a beneficiary then it's your duty as a trustee to take affirmative steps to distinguish the personal advice from the fiduciary advice and there's one way to really satisfy that Duty better than anything else right and that is to have separate lawyers and we do that all the time right and so have a lawyer representing you as trustee have a different lawyer a different law firm representing you as a beneficiary and then it becomes very easy to distinguish which advice was personal in which advice was trustee advice and the court says it's the trustees duty to make that determination to make that affirmative step to distinguish those two and as a trustee you have a lot of duties but that's one of them so I thought it was an interesting case just because it does reinforce the attorney-client privilege issue with successor trustees but it also gave us a lot of insight to here's a judge who's trying to help this I give the trustee a benefit of the doubt and the trustee just seems to be shooting himself right in the foot left and right right this is a this is a symposium on how not to appear in front of the judge if you're one player I don't know this lawyer I feel bad for them actually because they're probably you know they're feeling like they were on the hot seat but right I mean it's better just to be frank with the judge and be clear and hope for the best especially if you know you're gonna take an appeal me might as well I mean even if you don't know you're gonna take an appeal me just I mean it is what it is the judge has already ordered it and so you're not doing yourself any favors by being evasive one thing I've learned in reading appellate opinions is you don't want to be the lawyer that's in a transcript that ends up in an appellate opinion because I've seen this time and time again ever again and it's almost like the appellate court you know they just so amused by these interactions they have to put it in here because they figured that maybe if they write it people won't believe it happens so they got to put the record in and to show you what happened because it's not very often actually see the transcript in the appellate opinion right they actually pulled this out of the transcript and cited it in their brief that's right the appellate court did right as an aside before we get to our questions there was one other case and not to get into the details of it but it was another case where the transcript was cited and I think it's called Stuart versus colonial life ASC and that's the one where we take that positions a lot and one of the things we run into with young middle aged and older attorneys that are defending that positions is if they don't like the question that we're asking their client what will they do I'm struck ting you not to answer and not answer that question yeah and there's no there's no privilege they're pointing to it's not like we're asking them what conversations did you have with your lawyer once you hired a lawyer because that we aren't entitled to and we're just asking the question in the Politis manner possible and they're not answering so we're not being overly harassing in the deposition and in that case it was great also because the appellate court took the transcript and it's it's a fun one to read we'll do one of those one of these times on depositions but just for younger and middle-aged and older lawyers in California you cannot direct your client to not answer my questions unless I'm invading the right to privacy or my question is just so overly harassing that you have to suspend the deposition there's only two reasons you can tell people not to and your clients not to answer my questions that's just a little bit that's my two cents you can go look at Stewart versus Cloney on my video if you like but it would make depositions go so much better yeah if they would just know the rules and then we don't have to go to the court file motion to compel and then right you know if you object answer your objection insert your objection but yeah don't order them not to answer unless it is a harassing question or less it's a privilege right sorry that was a little side we'll do a will do a show on that at some point here I know I put you up on your soapbox yes all right Manisha so many issues with us today kala is on vacation she's lost somewhere in another place another location she does Kayla does a great job so I had a question because you both did a fabulous run through the scenario with two attorneys and and a patient judge so what would that look like with two attorneys and a not so patient judge [Laughter] well you know I I think judges like this I actually like I've actually appeared in from this judges a couple times and I don't remember the demeanor of this judge but in reading this I think she did a good job she she gave the lawyer the benefit of the doubt even when he was being rude and acting like he didn't understand her I've seen judges just trust down lawyers for this type of behavior and they have a right to and and judges if you think about it they are constantly hearing quarrels from what I call children in a sandbox arguing over the toy truck that's at a sandbox and they hear this argument day in and day out for all of the hearings are in front of them they get tired of it they get tired of lawyers not knowing what they're asking for or acting like they don't understand what the courts asking them to do and so sometimes you can understand why judges are a little curved with lawyers yeah man I've had judges be Kirk with me I don't like it but I thought this judge did a great job they just probably could have been a little bit more straightforward if she'd wanted to but she was nice to him also the trustee would have been removed much faster I mean in and this was a patient judge most judges would be like you're out of here right that's true so my follow-up question is what's the reason for for the resistance between the attorneys Oh from the lawyers well because you don't answer the question I mean it the answer to this question in this particular case when this court said are you gonna hand over the documents yes the answer needed to be yes and what you're seeing is a lawyer who doesn't want to hand over the documents but they've already been ordered to do it and so they're trying to play this game of which documents are them and I'm not sure where's the order which is not gonna win you're not gonna win on that argument because you know obviously just making the court mad and you're not going to get there but but the reason why lawyers have such a hard time in court is because they won't just answer the question because they don't like the answer and a lot of that comes to preparation if you're prepared for the hearing and you understand that yes this is my answer but here's the rationale behind it you know then you're much better able to be direct with the judge and that's what judge is won at the end of the day let's get on with this yeah I agree and and then one thing that I would say pretty young lawyer or even older laureate that wants to enhance their skills a little bit go to the Supreme Court website download some oral arguments from the Supreme Court not that you're going to be an appellate lawyer when you're in a trial trial court are you in over emotion or something but listen to how the lawyers there those are the best they're supposed to be the best lawyers at least you got nine really smart people asked you definitely very high lawyers yes there's nine justices asking you very smart and very pointed questions every single word matters and those questions and listen to how the lawyers respond and those are hard questions to answer so that's a good place to go to just to see how other lawyers good lawyers will answer judges when you always say that lawyers need to know you know tell the judge what you want and what authority you have for asking for it that's right and if you're not prepared to and to say those two things then you're not ready to go to court well I got that height that's not something I thought up that's judge Mac Fisher out of Riverside many years ago when I was at Young in front of him and he told me look you know you you gotta ask me what you want and then you have to tell me do I have authority to do it right and I remember he had a 120 people on his calendar one day and I sat there with that in mind and I watched every lawyer get up and almost everyone the judge would say what do you want or what can I help you with and they would say well the gray and then give this big long story and in that big long story there was nothing about what they wanted nor was there any legal authority or precedent or what they were asking for and you know you look at judge judge Mac Fisher up there you're just thinking how does he not just pull his hair out because right he just wants to know what do you want and can I do this for you or when they ask what's your authority and they say something like the probate code that's not particularly helpful well the one opposing lawyer who will remain nameless out of Orange County that we've gone against twice now and she are used when she argues in court she basically says anything she wants and that says and that's in the probate code without cites the probate code or anything so at least give me a chapter any close what's up next Manisha the very first one is my mom has dementia and my ill stepfather is trustee of their revocable trust and he's unable to manage the trust due to his illness how do I begin managing the trust if my stepfather still wants to maintain control even though his illness renders him unable this is the this is the same case that happened with the who's the guy that owned the basketball team oh we got the Clippers yeah the Clippers right the name escapes me it's right on the tip of my tongue but it was the same thing I mean his he and his wife for Coach trustees of a trust is it ball no oh gosh his name's escape how can his name is be statement boy yeah yeah yeah and anyway they both are co-trustees of a trust he supposedly lacks capacity she wants to sell the basketball team too we're done Microsoft well we're doing great we obviously are lacking capacity we're doing it clinic on keyboard I'm Steve Ballmer yeah for two billion right sells it so she wants to sell the Steve Ballmer he doesn't so who has authority under the trust to make that decision and to allow the sale to go forward and so what happened was she had the husband go sterling Donald sterling Telstra she had Donald sterling go to a doctor and got a declaration from the doctor that he lacked capacity right well under the trust terms it said if you have a statement from at least one treating physician then that person will be deemed to have lacked capacity under the trust and then a chorus thought Donald won to fight it and so they went to court and the interesting thing is the judge said I'm not here to determine whether or not mr. sterling lacks legal capacity as a matter of law the way you would in a conservatorship because that's not what's before me right the only issue before me is this trust provision because the trust has a mechanism for when somebody can no longer act and that mechanism is if you have a note from a physician that says that they are not capable of acting where they are deemed to not act and they are essentially removed from office right and the court said well you have a letter from a treating physician you therefore have been removed from office and so now the wife is the sole trustee and she was able to finish up the sale and so that's really what you have even in this situation is you have somebody who is too ill to operate as trustee but they don't want to admit it well you'd have to look at the trust terms do the trust terms allow for some standard as to when somebody loses capacity most of them do they'll either be usually it's one letter or sometimes it's two letters from a treating physician if you can get that then that person now is no longer acting as trustee by the trust terms themselves they effectively are removed from office and the new trustee can take over then the question becomes well how do I give them to see a doctor when they won't go that's a whole different issue but that essentially is the answer that question is you have to follow the trust terms and a little bit more practical view of it would be be very careful because if you're a beneficiary into the trust and you took off that that's revocable and he's got the power to revoke his half or maybe even his and mom's half because I can happen in a minority of cases you may be kicked out of a trust now you can argue down the road he did that at a time we lacked capacity or unduly influenced by somebody but just be careful we call this if you're gonna shoot at the king or the queen make sure you hit and if you don't you're gonna take them off and you're out they may take you out of their trust right so if they're elderly and there's the sunset years and they're not gonna be on this earth that much longer not that I want to look at this in such a sad way maybe it's better just to let sleeping dogs lie and then clean up the mess when they passed away well going back to the Dolans stirling case the standard that is required for you to no longer act as trustee is not necessarily the same standard that would mean that you can't change the trust terms so just because the Trust says you're removed as a trustee once you have this letter from a doctor right that may not be enough to say hopefully you don't have capacity to amend the trust right this always comes back in my mind to taking the driver's license away from grandma or grandpa or from your mom or your dad they are never gonna volunteer Elysees you know what you you've brought me good counsel here are my keys I will never drive again I certainly want I mean this is something yeah this is something that they've been doing for as long as they can remember and so when you come to them and tell them they're not able to do something any longer and it may be there that they can you have to be very delicate about that because these people have feelings and they still have capacity I mean enough capacity to say I'm not leaving you anything in my trust from my will so you want to be careful on how you approach that that's right yeah that's tricky follow-up question is that any different if it's a will well the main difference with the will is the Wills don't technically come into existence until after somebody dies so there's nothing for you to do if so if dad's alive and ill and can't manage his own affairs the will doesn't do anything a will is really just lying dormant until somebody dies and then it goes into effect as opposed to a revocable trust which is sometimes called a living trust meaning it's created during life and assets within a revocable living trust can be managed when somebody lacks capacity a new trustee can step in and they can take over the power of the trustee and manage the trust assets that doesn't happen with a will so in a will you'd have to go straight on to a conservatorship if somebody lacks capacity and they need help me during the watch during the luncheon and then if they die then you can submit their will to the court and ask them for up - yeah bring it to life and then you inherit yeah it's funny because the will is not actually a will until a court orders it as a will after somebody dies and a lot of people don't understand that but that's how it works right the next question is my sister was removed as a trustee due to misappropriation of funds now she's a successor trustee for the bypass trust what should I do tried to get it removed I'm assuming it sounds like it's from the same trust there's a survivor stress on bypass job right and then I would simply just I would petition the court for instructions and say or petition to remove her based upon the previous removal if those facts are still in place yeah and it could be that there's misappropriation in the bypass trust as well so that would be a basis for removal or if she's already been removed for misappropriation that would suggest that this is somebody who's not capable of properly managing a trust anyway so there'll be another grounds removal you have a pretty good shot to get a judge to suspend her right and then you know leave the determination for removal for down the road although the case will probably settle before that determination ever gets made but judges tend to be pretty quick to move when there's financial abuse taking place of any kind if you have proof of it like you can't just go in and say this person's misappropriating assets but if you actually have some bank statements that show a misappropriation something to back it up right yeah judges tend not to be shy about that right I agree is it possible for the successor trustee to transfer assets into their name so when we're talking about successor trustee here we can talk about really a successor trustees just another trustee it's there a new trustee so let's just talk about trustees generally trustees can do anything that they want to the trust they essentially are the legal owners of the assets of the trust they're not the beneficial owners there's some beneficiaries out there that are named maybe they're part of that group of beneficiaries but let's assume that they don't own everything in the trust as a beneficiary they can go out do anything they want to those assets they can mortgage them they can sell them they can take loans against them that in many cases you'll have these general provisions and trust of all allow the trustee these very broad sweeping powers what that keeps a trustee in line to make sure that they're doing all of these things in hopeful good faith and that is the duties that are on a trustee of the probate code and the duties that are also outlined in the trust document itself and by the way there's some of those duties that are against public policy we won't go down that route the probate code is gonna be the Holy Grail they're gonna have to follow every duty that's outlined in the probate code and then anything else that's in the trust that's gonna be a bonus you'll look at the terms there to see what else they need to follow but an answer to this question it's scary this is why they're called trustees they're in a position of trust they are going to be managing assets and they have legal title of those assets meaning they can do a lot of good things with those assets they can also do a lot of bad things yeah I know I like how you say it's a trust that's in the name it's kind of in the name the interesting and from a practical perspective yes a trustee is constrained by the trust document and Trust law but as a practical matter the only people who are going to keep them on the straight path are the beneficiaries somebody coming up and demanding that they do the right thing a lot of times people say well who keeps these trustees in line you know what who can I call to keep these trustees in line no you don't it's you the beneficiary that keeps them in line nobody else there's no governmental agency there's no district attorney there's no county agency that's going to help you keep these trustees in line you have to keep them in line and so when they're doing wrong you have to take action and that's why you also should be informed like get information from your trustee pay attention see what's going on so Keith and I think this this this example might make help might help clarify this so if you have fifty thousand dollars in your bank account that's your money it's fifty thousand happen there's not all these rules about how you're supposed to manage your money because it's mine because it's yours and you tend to take care of what's your especially when it comes to money I do not only that but my money I'm both the legal owner and the beneficial owner all in one of my money so I have all the rights whereas with trust take that whole bundle of Rights as they call it and split them in half and give half the rights to the trustee and the other half to the beneficiary and now let's see if I could bring that full circle and let's say that same $50,000 I'm now trustee of it over you it's not really my money I'll never see it I will manage that differently than my own money yeah and that's why these harsh rules are in place to make sure the trustees stay on the straight and narrow path as you write it out beneficiaries have to force them sometimes to do that obviously right but the idea behind that is the court system knows the justice system knows that people will never care about someone else's money the same way they care about their own the duties of what you have to to manage that money a much higher that's right more conservative they're gonna be for your own money that's right and then also one thing I found even good people and this is a sad part of human nature I'm becoming jaded even good people when they see a lot of money sitting there it's almost like to cook that the monkey in the cookie jar getting their hand caught yeah it happens you good people that maybe it starts with you know buying a gallon of milk because that's the only checking account they have with them that day when they go to get milk maybe they take $100 cash and they're in Vegas out of the ATM card next thing you know they're writing themselves two checks for 10 20 30 40 50 several hundred thousand dollars and they were good people there's I mean they're they're you know they're good members the community they're not evil they just got out of hand I'm not a hangout a lot of control yeah I will say this though about new trustees is sometimes people get confused a trust is not able to own assets in its own name it only owns assets through the trustee so if you have a real property like if I have my real property my home and I gave it to you as my trustee that then would say Stewart Albertson comma trustee I think it's a fantastic idea it's a terrible idea that's but since it's just hypothetical I'm willing to go along with it a lot of it that's a normal Trust right yeah right but you have to ask my wife first about her house too so good luck the but a lot of times people get confused cuz they're like my the trustees putting assets in his own name no no there it's fine if they're putting it in their name as trustee that that they have to do but if they're putting it in their own individual name if you took the 50 thousand and you put it into account that was just your name individually that's a problem Stuart Albertson is my sole and separate prime yeah that's that you don't want to see but Stuart I would sing come a trustee of whatever the Trust is that's normal that you do want to see in that that's typical so a lot of times people get confused who like that the trustees putting assets in their own name well it depends on how they're titling it it's a problem though there's a comma trustee after a chances are it's okay yeah yeah and then obviously that the manager properly but that's a whole different ball game right the next question is should successor trustees be notified of changes to the trust generally speaking no so by and large it depends on the type of trust you're talking about but by and large a revocable living trust can be amended or changed in any way by the person who created it and the successor trustee doesn't need to be notified there's no requirement of that a lot of times we'll have people call us who are children and they'll say I was a successor trustee and I was a child of my parent and I'm a beneficiary of the trust and yet they modified the trust and they never notified me well they didn't have to it's a private document they can you know your parents can do all sorts of legal documents without ever notifying you at all if they don't want to they can notify you but they don't have that obligated to and so by and large you're not required to receive notice you I agree hundred percent and I think the question is asking them obviously they want to settle or if they're still living do they have to note of it and that's the other thing as as you pointed out many times we have been fisheries come and say I was the beneficiary of this trust and when they changed it they didn't tell me here's the same analysis a successor trustee that's just named there as a successor who one day may take the position as trustee does not have to be notified of anything while the person is alive yeah once they passed away I suppose if you file something in court as a current trustee and there's two or three successor trustees perhaps they're supposed to get notice of that right but that's an after death yeah and the reason why you don't have to notify a successor trustee is they might change they might be taken out and they don't the successor trustee really doesn't have to know anything about the trusts until it's their turn to act and then they need to see the trust and then they need to decide am I gonna agree to act as trustee because you can decline just because your name doesn't mean you have to have that's right so you have to agree to act in fact so so that will come later when the successor trustee is it's their turn final question I'm sure applies to both successor trustees and regular trustees how long should it take for the trustee to distribute assets so we get that question little question we get that question a lot and in a good lawyer fashion it depends and since we get paid by the word it always do there's three words it depends because some trusts have a lot of money sometime a little some have assets that need to be liquidated others already have liquid cash on the date of death those are gonna be much easier to administer some are tied up in lawsuits are tied up in lawsuits sometimes it's a trust contest sometimes there's a lawsuit against the decedent after they passed away which then that brings a whole host of procedural landmine feeling that the state tax issues other knows much any more of this so as a general rule though Keith's to give our clients answers we generally say a plain vanilla trust administration is probably gonna be able from a year to a year and a half mmm anything more complex than that you can easily see two or three years right yeah and it really does depend on the complexity of the issue I will tell you this that if you're given a specific gift if you're not paid within a year it starts to earn interest under the probate code that's required and so some of the smaller gifts should be done even before the earmark in my opinion but so much just depends on the circumstances you can have one circumstance where they haven't distributed in three months and it's unreasonable and another one where they haven't distributed in two years but that's perfectly reasonable given what's going on in the trust I'll tell you this though a lot of times people will call in it'll be like five years of not distributing something that was sold three years ago and it's yeah that as soon as I hear that that's usually a red flag of something's not right here there's no reason to go that long and of course then you'll ask the questions like why are you in litigation no was there any estate tax no you know were there any of these other problems no no no you're like why are you waiting five years to distribute money it makes no sense and yet that happens and it happens all too often so trustees don't want to give up money because they're afraid they're gonna do something wrong I think and once they give it up they can't fix it and so they want to hold onto it as long they can but trustees can make preliminary distributions start getting some of the money out now and then just should be a little bit more later then a little bit more later and that's the other thing is it's not an all-or-nothing proposition it's not like you have to wait 18 months and then give one percent of it well that leads me to one final question and that is can you sue a trustee for not distributing the assets in a timely manner and in addition to suing them for the distribution are there any punitive damages that can be sought there's no punitive damages that can be sought that I'm aware of are you aware of no the only thing I would go to there and you can finish me answering your question would be if they somehow the trustee took these assets for themselves you mom possibly could get double damages under an 850 petition but no there's no punitive damages for this unfortunately yeah that's a lot of times what happens is you'll you'll go let's say you go to long it's been five years a million dollars should have been distributed it wasn't and people say well we want to sue the trustee because we haven't had this money for five years well you can certainly go to court and the court is going to say okay distribute the million you know that will be the remedy the cure is get the money out and maybe the court will award damages if the money wasn't invested properly or something like that but the courts not going to award independent damages against the trustee for for doing the wrong thing and keeping the money too long there's no pain and suffering there's generally no punitive damages the the Cure in the legal world we call a remedy the cure is to just make the distribution and you know the court is going to kind of look at it as well five years is a long time but on the other hand you know why didn't you come in two years ago right that's on you beneficiary well the thing we've seen with this market too since 2008 the market is steadily grown over the last ten decade and maybe even a little over a decade right and so these trustees that waited didn't make distributions the values of the trust actually increased significantly in a lot of kids and so it's hard to come in and argue that they should be somehow surcharged because the assets grew but even that is an investment issue it's it's you know you didn't invest this properly that would be the surcharge that's right I think a lot of times people think well they breached their duties and they need to be punished or they need to pay some extra amount of money for any damages it doesn't work that way right and trust long is that all we have Anisha all right well very good I want to thank you for joining another episode of Sam fight win live stream we're lawyers real answers you can find a recorded version of this video on YouTube and Facebook and you can also check out our audio only version of this on pod bean and go to our website and you can find all of those resources along with all of our other videos that we put out on these topics Stuart thank you so much yeah and we want to tell Kayla we missed her and we look forward to her getting back in Benicia he did a fantastic job you did two jobs today thank you yeah thank you very much Manisha and thank you for joining me Stuart and thank you for joining us and we