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Family business is a motorcycle repair shop, CPA told them they could write off certain expenses. Father bought a car, and wrote it off for the use in the business. Step-mother took over the business as the personal representative and decided to upgrade the company car to a BMW and basically ran the business into the ground.
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Laurabelle sets up a trust with her daughter Mary Jane and Mary Jane’s two sons Charles and Robert as lifetime income beneficiaries, with a future interest in Shriners’ Hospital [residuary beneficiary, vested remainder]. Mary Jane is the trustee, and Robert is the successor trustee. Mary Jane put all of the trust property into an investment account at Dean Whitter, where her son Charles was an investment advisor, and he handle the account – including embezzling more than $370k.
- J.T. and Georgiana, husband and wife, set up testamentary trusts, with Pacific National bank as trustee, and their children, Freeman and Evelyn, are the beneficiaries. The trust property consists solely of a piece of real estate in Seattle, with a 99-year lease to SeaFirst Bank, the lease does not have a rent escalation clause and gives the right of first refusal to SeaFirst bank if the property is to be sold. SeaFirst assigned its lease to Credit Union and Credit Union offered to buy the property, and Pacific National agreed.
- Pauline is mother and the decedent; her daughters are Gloria, Louisa and Beatrice. Gloria’s husband is an attorney, he drafted Pauline’s will, and he is also executor of Paulines estate. The will provides that Gloria and Louisa will get one-third outright, and Beatrice’s one-third share is to be put into trust with interest payable to her through her life with the principal to her three sons on her death. Gloria and Louisa are co-executors of the trust for Beatrice.
- (a) Notwithstanding Section 16461, a trustee of a revocable trust is not liable to a beneficiary for any act performed or omitted pursuant to written directions from the person holding the power to revoke, including a person to whom the power to direct the trustee is delegated.
- (b) Subdivision (a) applies to a trust that is revocable in part with respect to the interest of the beneficiary in that part of the trust property.
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(a) Except as provided in subdivision (b), (c), or (d), the trustee can be relieved of liability for breach of trust by provisions in the trust instrument.
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(b) A provision in the trust instrument is not effective to relieve the trustee of liability (1) for breach of trust committed intentionally, with gross negligence, in bad faith, or with reckless indifference to the interest of the beneficiary, or (2) for any profit that the trustee derives from a breach of trust.
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[plus other provisions]
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The provisions in this article for liability of a trustee for breach of trust do not prevent resort to any other remedy available under the statutory or common law.
- (a) If the trustee is liable for interest pursuant to Section 16440, the trustee is liable for the greater of the following amounts:
- (1) The amount of interest that accrues at the legal rate on judgments in effect during the period when the interest accrued.
- (2) The amount of interest actually received.
- (b) If the trustee has acted reasonably and in good faith under the circumstances as kn
- (a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances:
- (1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest.
- (2) Any profit made by the trustee through the breach of trust, with interest.
- (3) Any profit that would have accrued to the trust estate if the loss of profit is the result of the breac
- (a) If a trustee commits a breach of trust, or threatens to commit a breach of trust, a beneficiary or cotrustee of the trust may commence a proceeding for any of the following purposes that is appropriate:
- (1) To compel the trustee to perform the trustee's duties.
- (2) To enjoin the trustee from committing a breach of trust.
- (3) To compel the trustee to redress a breach of trust by payment of money or otherwise.
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