Siegel v. Fife
234 Cal. App. 4th 988
| Cal. Ct. App. | 2015Background
- Betty Jean Brown executed a 2005 revocable trust (later made irrevocable) that during her lifetime authorized the trustee broad discretion to apply principal for her care and, upon death, devised 1321 Edgecliffe Dr. (Edgecliffe house) to Elisabeth Fife for caring for Brown’s cats and left $50,000 for cat care/upkeep.
- In 2011 Brown purportedly executed a conflicting 2011 trust; the probate court later declared the 2011 trust void and reaffirmed the 2005 trust while placing the trusts under supervision and appointing conservator Jeffrey Siegel.
- Conservator Siegel moved Brown to assisted living; by late 2013 the conservatorship estate lacked funds to pay ongoing care (about $4,000/month), and significant repairs to the Edgecliffe house were estimated at over $225,000 while its appraisal was modest.
- Trustee listed Edgecliffe and other trust properties for sale; a $560,000 bid (later an accepted overbid of $650,000) prompted the trustee to petition the probate court to confirm the sale to fund Brown’s care during her lifetime.
- Objector Fife opposed, arguing Probate Code §21402 abatement rules required sale of residuary assets before specific gifts like the Edgecliffe house and that the trust being irrevocable barred the sale; trustee and conservator argued the trust grants broad authority to use principal for settlor’s care.
- The probate court approved the sale; Fife appealed. The Court of Appeal affirmed, holding the trustee had authority under the 2005 trust and Probate Code principles permitting abatement to effectuate the settlor’s plan.
Issues
| Issue | Plaintiff's (Siegel/Trustee) Argument | Defendant's (Fife) Argument | Held |
|---|---|---|---|
| Whether trustee may sell a specifically devised trust asset (Edgecliffe house) during settlor’s lifetime to fund settlor’s care | Trustee: 2005 trust grants "sole and absolute discretion" to apply principal for settlor’s care; sale necessary because conservatorship funds are depleted | Fife: Probate Code §21402 abatement requires residuary assets be exhausted before specific gifts are reduced; specific gift should not be sold now | Held: Trustee may sell the Edgecliffe house; trust language and §21400 permit abatement to effectuate settlor’s plan; settlor’s lifetime care takes priority |
| Whether abatement statutes (Prob. Code §21402) prohibit sale of a specific devise during settlor’s lifetime | Trustee: Abatement statutes do not prevent sale to provide for settlor; trustee duty to provide for settlor controls | Fife: §21402 puts specific gifts after residuary; residuary should be liquidated first | Held: Abatement statutes allow reduction when necessary to effectuate the trust; probate court may fix post-abatement distributions; sale not barred |
| Whether the trust being irrevocable prevents the probate-court-supervised sale | Trustee: Trust is an express trust subject to Probate Code and trustee powers include sale | Fife: Irrevocable trust status bars sale of specifically devised property | Held: Irrevocability does not exclude the trust from Probate Code or trustee’s sale powers; sale permissible under trust terms |
| Standard of review for probate court’s sale approval | Trustee: Probate court has discretion to approve sales under §17206 and trust powers | Fife: Probate court abused discretion by allowing sale of specific devise | Held: De novo review of statutory interpretation; abuse-of-discretion review for sale approval — no abuse found given precarious finances |
Key Cases Cited
- Moeller v. Superior Court, 16 Cal.4th 1124 (trustee power to acquire or dispose of property)
- Parsons v. Bristol Development Co., 62 Cal.2d 861 (extrinsic evidence admissible only to interpret instrument; court-only function absent credibility disputes)
- Burch v. George, 7 Cal.4th 246 (interpretation of will/trust generally question of law)
- Valentine v. Read, 50 Cal.App.4th 787 (abatement principles and when beneficiaries’ shares may be reduced to effectuate testamentary plan)
- Burkett v. Capovilla, 112 Cal.App.4th 1444 (abatement and reduction of devises where estate insufficient)
- Estate of Barthelmess, 198 Cal.App.3d 728 (appellate review standard for probate court sale approval)