Upon review of the case, a trial court determined that not only did the dissenting sibling have the right to request her share, but that termination of the trust was necessary.
The court went so far as to require the immediate liquidation of the trust. As well as payment of all legal fees through the proceeds of the trust. On appeal, the Sixth Appellate Court reversed the order to liquidate the trust. The appeals court affirmed the decision that the sibling did have the right to receive her share of the trust. Indeed, the appeals court determined that the lower court was correct in requiring the termination of the trust. Reason being that the founding documents unambiguously stated that asset redistribution happen on the 30th birthday of each beneficiary. However, the lower court was incorrect in ordering the payment of attorney’s fees and ordered liquidation. Ruling that the trustees should retain discretion in how exactly to terminate the trust.
This case is another example of how complex trust litigation can be in California.
As noted by Sonoma County estate planning attorney Charles D. Stark,“When setting up a trust, the language always matters. Should a dispute arise over a trust, California courts will carefully examine the language in the controlling documents. The language must be unambiguous and specific. To ensure we carry out the true wishes of the founder.” He further emphasized how important to it is to have holistic conversations with your estate planning attorney; to anticipate and plan for family issues such as business succession, sibling rivalries, and control issues.
Contact our firm at (707)527-9900 to discuss your case.