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Trusts and Estates

Morgan v. Superior Court

Cite as G055377
Filed May 29, 2018, Fourth District, Div. Three

By Matthew R. Owens
Withers Bergman LLP
www.withersworldwide.com

Beverly amended and restated her trust in 2013, naming herself as initial trustee and her son Thomas as her successor. In 2014, Beverly died and Thomas succeeded her as trustee. Beverly’s daughter, Nancy, filed petitions seeking, among other things, to invalidate the trust and to remove Thomas as trustee. After Thomas filed an inadequate accounting, the probate court suspended him and ordered him to turn over all trust records to the interim co-trustees. Although the court order was broad enough to include attorney-client communications between Thomas and his counsel, Thomas refused to produce those communications because a provision in the trust permitted the trustee to withhold privileged communications from a successor trustee. Thomas petitioned for a writ of mandate to reverse the trial court’s order.

The appellate court denied the petition. Under Moeller v. Superior Court, when a trustee seeks legal advice on behalf of a trust, the privilege vests in the office of trustee and the right to assert the privilege passes to the successor trustee. A trust may not allow a former trustee to withhold from a successor trustee communications exchanged between the former trustee and the former trustee’s counsel, and any trust provision seeking to do so violates public policy and is unenforceable. A trust may limit a trustee’s liability to some extent, but not in cases of intentional misconduct, gross negligence, or acts taken in bad faith or with reckless indifference to the interests of the trust’s beneficiaries. Since a trust cannot absolve a trustee of all liability, it also cannot prevent disclosure of the records that may be used to establish liability. In order to protect attorney-client communications, a trustee must retain separate counsel to distinguish personal advice from advice obtained in a fiduciary capacity. Thomas did not retain separate counsel for that purpose and therefore had to produce all trust records to his successor.

http://www.courts.ca.gov/opinions/documents/G055377.PDF

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