Cite as A166997
Filed October 13, 2023
First District, Div. Five
By Golnaz Yazdchi
Sheppard Mullin Richter & Hampton LLP
Headnote: Litigation – Standing
Summary: In addition to a trustee or beneficiary, an interested person may have standing to respond or object in a trust proceeding.
Trustors established a trust for the benefit of their five children. The trust held a 70% interest in a company, of which the children, personally, owned the remaining 30% in equal shares. Two of the five beneficiaries filed a petition to instruct the trustee to take certain actions, including directing the company to borrow substantial sums to pay estate taxes owed by the trust. The company filed a response to the petition. Petitioners objected to the company’s involvement, claiming the company did not have standing to participate because it was neither a beneficiary nor trustee of the trust. The court agreed, and found the company lacked standing.
The appellate court reversed. Although only a trustee or beneficiary can petition the court for instructions in a trust proceeding, an interested person can respond or object to a petition so long as the interested person has a property right in, or claim against the trust estate, that may be affected by the proceeding.