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>California Trust Law Developments

>The following is an important November 2009 California trust law court decision:

King v. Johnston (California Courts of Appeal, Fourth Appellate District, No. D054136, 2009 DJDAR 15871).

In a developing area of trust law, the court reaffirmed and clarified that a trust beneficiary has the personal right to sue a third party individual who actively participates in or knowingly benefits from a trustee’s breach of trust. The trial court held that the beneficiary did not have standing. The appellate court reversed, holding that the beneficiary had independent standing to sue the trustee, the trustee and the third party, or the third party alone.

There are only a few California cases that address these issues. The facts of each case must be carefully analyzed. In King v. Johnston, for example, the trial court found that the third party influenced the trustee’s decision making and received trust property. However, pursuant to case law, arguably it should be sufficient to show only that the third party in some manner actively participated or assisted in the trustee’s breach. Beneficiary standing also may vary depending on the facts and circumstances of the case and the terms of trust. Nevertheless, beneficiary standing to bring suit is an increasingly important tool available to help pursue people who unduly influence or merely misadvise trustees.

Dave Tate, Esq.

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