What Happened
After the passing of his grandmother — the woman who raised him and named him as the primary beneficiary of her trust — our client expected a straightforward trust administration. The trust clearly provided that our client was to receive 70% of the assets, with the remaining 30% to be allocated to the acting trustee, his father. Instead, he was met with silence, obstruction and overall misconduct.
Following his grandmother’s death, the trustee refused to timely distribute our client’s share of trust assets to him, withheld code-compliant post-death trust accountings and refused to answer basic questions about the trust’s finances and administration. As months passed, it became clear that the trustee was engaging in impermissible self-dealing.
After repeated attempts to obtain information and cooperation from the trustee failed and prior to Keystone’s involvement, our client retained legal counsel. Despite filing two separate petitions, including one for removal of the trustee, the trustee refused to provide the information our client was entitled to review and appeared to blatantly disregard not just the terms of the trust but also the requirements of the California Probate Code.
Eventually, our client retained our firm to take over. Within the first few weeks on the case, and after reviewing the substantial evidence involved, Keystone determined that a strong, but straightforward presentation of the findings would be essential to resolving this case.
Accordingly, Keystone and the client opted to alert the court of the following allegations against the trustee — now supported by documented evidence — through comprehensive supplements to each previously filed petition.
These allegations included that the trustee had:
- Withdrawn a substantial sum from a trust bank account on the day of our client’s grandmother’s passing without explanation.
- Used significant trust funds to pay premiums on a life insurance policy that named the trustee (our client’s father) as the sole beneficiary, resulting in a large personal payout after the grandmother’s death.
- Paid himself substantial trustee fees and issued additional “gifts” to himself from trust accounts.
- Refused to distribute trust funds that were undisputedly owed to our client (the primary trust beneficiary) unless our client signed a legal release shielding the trustee from liability — a condition that is not permitted under California law.
How Keystone Was Able to Help
Keystone promptly protected its client’s beneficiary rights and the trust’s assets. Our fiduciary misconduct attorneys filed supplements to multiple petitions, which focused the court’s attention on the trustee’s alleged transgressions, which were supported by documented evidence. Additionally, our firm presented email communications between the trustee and our client, bank and brokerage statements reflecting unexplained withdrawals and transfers, life insurance records showing trust-funded premium payments and personal payouts, and correspondence from the family’s estate planning attorney confirming the intended treatment of trust assets — all to demonstrate a pattern of the trustee’s self-dealing, lack of transparency and violations of multiple fiduciary duties.
With this evidence, Keystone crafted a case and legal strategy that placed the trustee more definitively at risk of removal, surcharge and personal financial consequences.
As a result of Keystone’s advocacy and strong approach to negotiations, the case resolved in our client’s favor — but not without further hurdles.
A mediation was conducted between the parties, which lasted late into the night but ultimately was unsuccessful. Later, the firm obtained additional limited discovery of questionable holdings by the trustee.
In retaliation, the trustee filed a petition to disinherit our client. Again, Keystone and our client stood firm on the facts and documents obtained through discovery and did not back down from the requests made to the trustee.
The trustee’s latest filing was viewed and acted upon as a last grasp by the trustee to obtain leverage, but even that attempt failed, because it only showed the trustee’s continued failure to act impartially.
Eventually, the parties reached a comprehensive settlement that resolved all pending disputes and secured our client’s rightful inheritance plus an additional sum based on the seriousness of the claims against the trustee. The resolution allowed our client to receive a larger inheritance than he had expected when he first retained Keystone — which brought a long-running and emotionally difficult conflict to a close without the need for trial.
