Course 6 — Lesson 1 The Facts for California Failed Trust Distributions

[Music] Welcome to the beneficiary's corner in this course we will discuss a Trustees failure to make distribution of trust assets to beneficiaries as required under the terms of the trust let's start with the basic understanding of the trust law we will apply to this problem under Probate Code section 16,000 a trustee has a duty to administer the trust according to the trust instrument this Duty requires the trustee to distribute trust assets to the beneficiaries as mandated by the trust document their power to distribute must be exercised in accordance with fiduciary principles and not in bad faith or in disregard of the purposes of the trust that means a trustee is supposed to act like a reasonable person would in similar circumstances in other words be fair let's consider a hypothetical situation to demonstrate the problems that arise and the options you have when confronted with a California trustee who fails to distribute trust assets after the hypothetical we will discuss trusts distributions in more detail Brian was the youngest son of a family that had two children Brian's father Frank built four apartment buildings in Los Angeles the head between ten to fifteen apartment units per building the apartment buildings were built in the 1960s and were owned by Frank until his death in March 2014 prior to his death Frank created a revocable living trust that named his oldest son Tom as his successor trustee the trust stated that after all the debts and expenses of the estate were paid the remaining assets were to be distributed outright to tom and brian equally the trust did not provide any instructions on how to deal with the four apartment buildings after Frank's death Tom quickly took control of the four apartment buildings but used the same property manager that Frank had used for years Brian assumed that his brother would simply sell the apartment buildings and split the cash between the two beneficiaries based on their appraisals obtained by Tom the total value of all four apartment buildings equalled 14 million dollars the two mortgages against two of the apartment buildings equal to four million total leaving a net estate of 10 million after taxes and expenses were paid brian assumed he would receive close to 4 million dollars Tom had other ideas however on how to handle the estate Tom thought that Brian was foolish with his money and would simply spend everything he received from the trust as a result Tom decided not to distribute any assets to Brian Tom also did not want to sell the apartment buildings instead he wanted to continue managing them as his father had and received the income Tom did not disclose his plan to Brian Tom also refused to provide Brian with any financial information other than the appraisals instead Tom sent one thousand dollars per month to Brian and told him that was all he was going to receive from the trust Tom also told Brian that if he hired a lawyer or attempted to challenge anything then Brian would be disinherited and received nothing further from the trust Brian was frustrated but also afraid to lose his share of the trust Brian never received an accounting or any financial reports and did not know how to obtain them it appears that Tom intentionally decided to withhold Brian's share of the trust and prevent him from ever receiving his four million dollars what can Brian do to force a distribution of his inheritance here are his options option number one file for removal of trustee file a petition with the California Probate Court asking the court to remove Tom as the trustee option number two filed to obtain a trust accounting demand and accounting and writing and then file a petition with the California Probate Court asking the court to order Tom as trustee to account option number three filed a force at distribution of trust assets file a petition for instructions asking the court to force the trustee Tom to distribute trust assets option number four file for breach of trust against Tom file a petition for redress for breach of trust that would seek monetary damages against the trustee Tom option number five ask Tom to distribute more money without filing in court send an email to Tom asking him to make a proper trust distribution. [Music] [Applause] [Music]