Course 10 — Lesson 3: The Talk for Trustee Treating Beneficiaries Unfairly

[Music] Now let's listen to Stuart and Keith discuss the options and their recommended approach to this difficult problem all right Stuart Albertson here without tuning Davidson hi I'm Keith Davidson and we've Keith we've had this hypothetical that we went over you read it beautifully thank you thank you and then we had these various options I was dying to know as I was going through the options what are your thoughts did I pick the right options do you disagree with how I viewed the case well I don't necessarily disagree with the way you viewed the case but I tell you that we run across this a lot right so you have a trustee who steps into office and for whatever reason they decide number one they think they can do whatever they want as if they were the parents which that's not how it works and number two they have a lot of animosity towards Lupe because she lived in the house for a long time rent-free and for whatever reason that really has gotten under Miguel's skin there's not a whole lot Miguel can do about that you can't really go back and force Lupe to pay rent for ten years it's not going to happen but you do have a trustee who's being very partial when trustees have a duty to be impartial the one thing that I will probably would not do right away is the accounting I think the accounting is not really necessary just yet I think the more interesting thing is trying to either get Miguel to move and make a decision that's that's a proper decision or get him out just get them removed and so it seems like either the petition for instructions or the petition for removal are probably your two best bets and you could file that at the same time the only problem is is with removal it's gonna take a while right and we've got Carlos and Damian who are chomping at the bit to get their money right and so they're gonna come in and side with whoever wants to do this more quickly well if we file the petition for removal then you've got Miguel telling his brothers Carlos and Damian blue-based slowing us down she's causing problems and then possibly they take his side in all this so that's why I stayed away from the removal now you do know obviously that courts around California they're all different so if I were telling you that this case was at San Mateo County currently as the current judge who sits there versus let's say San Diego County would that change your opinion on whether you file for removal it might I mean you know San Mateo County tends to be very tough on fiduciaries and so I think both the petition for instructions and removal might get better traction there San Diego I think is tough on fiduciaries too but for example I don't think they're as tough as San Mateo Los Angeles for example us that we filed it in Los Angeles it's a big courtroom big County a lot going on you may or may not get removal you know it depends they have a number of different judges there as opposed to the other County San Mateo has one probate judge San Diego has two la has many and so you're not quite sure what you're going to get so the where you file does have an impact on this no doubt I guess you're right I mean removal is a little bit of a it's a tricky proposition because it can take time but what about would you bring just the petition for instructions or do you like the idea of bringing the petition to sell real property and kind of forcing Miguel's hand I like bringing it in the alternative so if I was advising the client I'd say let's bring a petition for instructions and ask the court to do what you're asking it to do and that is to distribute the family home to you as an in kind distribution it's fair because it meets your amount of what you're gonna be getting mm-hmm or in the alternative your honor sell everything and let's get a distribution and now I think you've got Carlos and Damon on your side so now everybody's looking at me Gil and they're seeing that he's the one slowing this down and why is he slowing this down because he the trustee wants to favor himself or the beneficiaries courts not gonna like that it doesn't matter if that's in San Diego Los Angeles or San Mateo and by the way I think when you said that the San Diego Court may not be as hard on the fiduciary as maybe San Mateo is I think the way that I characterize that is they'll be hard on them it's just it's going to take longer for them to be hard because they're gonna want to have an evidentiary hearing cuz they're a big court they've got a lot of cases yeah where the San Mateo judge takes a real keen interest the current judge there who we like very much takes a real keen interest in these cases and he seems to remove trustees quite quite liberally and that's why I was saying just from a strategic standpoint if we're finally in San Mateo since we know that particular court and that judge does certain things whereas San Diego's they're gonna listen if you can prove to a San Diego judge that Miguel here has breached his duties and has caused damage to the trust they're gonna nail them just like any other court system well absolutely and I think all the judges that we appear in front of our great judges but you have to remember that probate courts a court of equity and what that means is is that every judge has the authority and the right to make a decision based on how they see the law and the facts of the case and every every person is different and it doesn't matter who it is they're always gonna see it a little bit different that's right and so there's gonna be a difference in terms of result not ultimately I think I think you're right it's not necessarily gonna be a different end result but it's just a difference in the process and how long it takes and for all these things but I really kind of like the idea of putting it to Miguel and saying you know what we've changed our mind we don't want the house just sell everything and that may not be what Lupe wants Lupe might actually want the family home but if you were to reverse it you kind of paint Miguel into a corner and say forget it sell everything cuz you know that he doesn't want to sell everything you then make him have you kind of force him to have to say no wait I don't want to do that let's let's work out something else right right I mean it's that leverage point that's so important I think in these cases because otherwise how do you get through to Miguel I mean what about just sending him a letter and say Miguel you're doing this all wrong now letters don't work yeah we don't send letters you got to pick something that's gonna get action for the trustee and here because strategically you've got Carlos and Damian that are there the fly in the ointment they're causing problems to flying appointment yeah yeah it's flying home I dependent okay they're the ones causing problems if Carlos and Damian were not in this case yeah hey well now it's a different ballgame why is that because now if Lupe's got time now we may be bringing a petition for instructions that includes a petition for an accounting petition for removal a petition for damages and a petition to sell the real estate okay so you're seeing Carlos and Damian as being something that has to managed separate from Miguel and we have to be a little bit careful about it cuz we don't want them going against us correct correct if they if they go against us it's gonna look bad for us here we want them to join us and we want McGill to feel isolated we want Miguel to realize that he either has to give us the home which is a fair distribution he shouldn't be the trustee he if he runs it for himself resigned to turn it over to another trustee right and let that trustee determine who gets wide well that's kind of the interesting thing about this case isn't it is that he shouldn't be trustee and he shouldn't be acting and partially and yet so you would think okay so you go for trustee removal and yet we're saying that's the last thing you want to do in this case and it's it's all strategic isn't it I mean in another case that might be the first thing you want to do that's right that's right what would be better and this is something that we've done more recently in the last few years in our litigation is we've looked at the different beneficiaries and figured out where their interests lie and we've tried to create our petitions to be in line with their interest even though we don't represent them and that's what we're trying to get out here because if we get Carlos and Damian on our side and it doesn't matter how many Carlos and Damian's there are out there we get those other beneficiaries on our side I found that good things happen so you may actually be able to get Miguel either removed or neutralized because you get the assets out and you probably can get Lupe the house even though you're not necessarily going for getting Lupe the house right out the gate you're doing some other things to try and position the case into that result one other thing that we're trying and and it's frustrating to me that lawyers can't settle cases anymore right if we want to settle case we got a hire a mediator for ten thousand dollars and go spend the day and go through all the rigmarole I would like very much if we could get back to the days before you and I even started practicing law where we hear some of the older attorneys they miss those old days where they used to have lunch with other lawyers and they would resolve cases right right but wouldn't it be nice if we could get with Miguel's lawyer and sit down and maybe even in Carlos and Damian if they're not represented and to invite them to the meeting and just see if there's any common ground we can find between the five six or seven of us maybe you find some common ground more than likely you're not but at least take a stab at it you're always gonna learn something from one of those meetings and then that can help tailor the strategy for your case moving forward well that's a really good point one of the things I would say is that on a case like this if you file your lawsuit and you start going after Miguel hopefully what you want to see is Miguel goes out and hires a competent trust attorney yes because if he does that attorneys gonna tell him Miguel you've got problems here we gotta get something worked out and sometimes you can work these out outside of mediation it's not very often but even if you can't at least a good trust attorney advising Miguel is gonna tell Miguel you've got problems here and we need to do something about it unfortunately there's a lot of times when Miguel will go out and hire somebody who doesn't know trust law at all and that just pours fuel on the fire good DOS and Miguel gets into more trouble and at the end of the day we're still gonna get what we want for loop because we're in a very strong position and Miguel might have to pay money out of his pocket because he did everything wrong he knows that's right that's right ultimately here I think we both agreed based on this certain fact scenario the sooner we can get a result from the judge the better absolutely [Music] [Applause] you.