Schindler Eyrich and John F. Eyrich for Objector and Appellant. v. << (2010)

Janis E. Marquet (Marquet), as successor trustee of the Ross George Testamentary Trust (the Trust), appeals from a trial court order directing the Trust to pay certain fees and costs incurred in connection with the underlying conservatorship proceedings.   Because the conservatee's estate does not include his beneficiary interest in the Trust, the trial court erred by ordering Marquet to pay fees and costs out of the Trust.   Accordingly, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

As best as we can determine from the meager record provided, Frederick George (George) is a conservatee and the Los Angeles County Public Guardian (the guardian) is the conservator over him and his estate.   George is the beneficiary of the Trust, which is being managed by Marquet.   The Trust contains a broad discretionary support clause:  “So much of the net income and principal of the ․ Trust shall be paid to or for the benefit of [George] at the sole discretion and judgment of the Trustee as is necessary and proper for his health, education, and welfare, including a reasonable number of the luxuries of life.”

On June 25, 2009, the guardian filed a fifth account current and report of conservator and petition for fees.   In the petition, he argued:  “Because of the small amount of cash on hand in the conservatorship estate, [the guardian] requests that the conservatory and attorney fees be allowed by the Court and ordered paid from the Trust.   Additionally, [the guardian] requests that all previously approved but deferred fees and costs to himself, County Counsel and Public Defender be ordered paid by [Marquet] from the Trust.”

Marquet objected to the petition.

After entertaining oral argument, the trial court approved the current account and awarded fees and costs as follows:  $525 for the conservator (the guardian);  $1,500 for the Los Angeles County Counsel (counsel for the guardian);  and $650 for the Los Angeles Public Defender's office (counsel for George).   All fees and costs were ordered paid from the Trust.

Marquet timely appealed.

DISCUSSION

I. Standard of Review

The determination of the legal basis for an award of attorney fees involves a pure issue of law subject to de novo review.  (Santisas v. Goodin (1998) 17 Cal.4th 599, 614.)   Likewise, the interpretation and application of a statute is a question of law that we review de novo.  (Estate of Lewis (2010) 184 Cal.App.4th 507, 512.)

II. The Trial Court Erred

The issue presented in this appeal is whether George's estate includes his beneficiary interest in the Trust.   According to Marquet, the trial court only had jurisdiction to direct payment from the conservatorship estate, which does not include George's beneficiary interest in the Trust.

To answer this question, we turn to the Probate Code.¹ Several sections of the Probate Code mandate the terms of compensation for costs associated with a conservatee.   For example, section 2430 provides, in relevant part:  “(a) Subject to subdivisions (b) and (c), the guardian or conservator shall pay the following from any principal and income of the estate:  [¶] ․ [¶] (4) The reasonable expenses incurred in the collection, care, and administration of the estate.”   Similarly, section 2942 provides, in relevant part:  “The public guardian shall be paid from the estate of the ward or conservatee for all of the following:  [¶] (a) Reasonable expenses incurred in the execution of the guardianship or conservatorship. [¶] (b) Compensation for services of the public guardian and the attorney of the public guardian.” (§ 2942, subds.(a) & (b).)  Likewise, section 2942, subdivision (a) allows a guardian or conservator of the estate to petition the court for an order allowing compensation, and subdivision (c) provides that that compensation “shall ․ be charged to the estate.” (§ 2640, subds.(a) & (c).)

Taken together, these statutes mandate that compensation be made only from the conservatee's “estate.”   The issue then becomes whether George's “estate” includes his beneficiary interest in the Trust.

“Estate” is defined in section 2400 as “all of the conservatee's or ward's personal property, wherever located, and real property located in this state.” (§ 2400, subd. (b).)  The phrase “personal property” is not defined and, as our California Supreme Court has noted, is inherently ambiguous.  (Estate of Dodge (1971) 6 Cal.3d 311, 318-319.)   With that in mind, courts have recognized that while “beneficiaries of an express trust have no interest or estate in the property constituting the corpus of the trust, [they do have] a personal property right to enforce [the] performance of the trust.”  (Anderson v. Superior Court (1983) 142 Cal.App.3d 112, 116.)   It follows that creditors of a beneficiary under a trust have “no more rights and can secure no greater benefits from a trust than the beneficiary himself.”  (DiMaria v. Bank of California (1965) 237 Cal.App.2d 254, 257.)

As applied here, this legal authority ² compels us to conclude that the trial court lacked the power to compel payment of certain fees and costs from the Trust.   George's beneficiary interest in the Trust is not “personal property” and thus is not part of his estate.³  He only has the right to enforce performance of the Trust, which, in this case, would be to compel Marquet to make support payments from trust property on his behalf.

In its letter informing the court that it is declining to file a respondent's brief, the guardian asserts in one sentence that the trial court's order was authorized pursuant to Estate of Lackmann (1958) 156 Cal.App.2d 674 (Lackmann ).   We are not convinced.   In that case, the Court of Appeal considered whether a trial court could “order payment from a testamentary spendthrift trust estate for [the] care of the beneficiary at a state mental institution over the objection of a trustee given ‘complete and absolute discretion․’ ”  (Id. at p. 675.)   In holding that it could, the Court of Appeal relied upon former Welfare and Institutions Code sections 6655 ⁴ and 6650 ⁵ and reasoned that nothing in the statutory scheme “should be deemed a legislative determination that beneficiaries of trust estates are to receive free treatment at a state hospital.”  (Lackmann, supra, at p. 677.)   The court went on to note that “ ‘[the] estate of such mentally ill person’ in [former Welfare and Institution Code] section 6650 includes the beneficiary interest of such person in a trust for his benefit.”  (Lackmann, supra, at p. 678.)

Lackmann does not apply to the instant case.   It interprets statutes different than the ones at issue here, and those statutes have long since been repealed. (former Welf. & Inst.Code, §§ 6650 [repealed 1969], 6655 [repealed 1969];  Lackmann, supra, 156 Cal.App.2d at p. 677.)   Moreover, the question presented in Lackmann concerned the payment of the beneficiary's care and maintenance at a state hospital (Lackmann, supra, at pp. 675, 677), not fees and costs to the guardian, the guardian's attorney, and George's attorney.   Were the issue in this case whether Marquet could be compelled to pay support expenses out of the Trust for George's benefit, our conclusion would likely be different.

As George's “estate” includes only his personal and real property, the trial court could not order Marquet to pay certain expenses from the Trust.

DISPOSITION

The order of the trial court is reversed.   Marquet is entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

ASHMANN-GERST

We concur:

FOOTNOTES

FN1. All further statutory references are to the Probate Code unless otherwise indicated..  FN1. All further statutory references are to the Probate Code unless otherwise indicated.

FN2. As the guardian elected not to file a respondent's brief and failed to rely upon any legal authority in support of his petition below, we have been provided with no legal authority to support the proposition that “personal property” includes a beneficiary interest in a Trust.   Our own research uncovered the principle that “ ‘[t]he extent of the interest of the beneficiary of a trust depends upon the manifestation of intention of the trustor, and ordinarily if real property is held in trust, and by the terms of the trust a duty is imposed upon the trustee to sell it and hold the proceeds in trust or distribute the proceeds, the interest of the beneficiary is personal property.’ ”  (Estate of Tutules (1962) 204 Cal.App.2d 481, 492.)   Because the sale of real property is not at issue here, that proposition has no bearing on the instant case..  FN2. As the guardian elected not to file a respondent's brief and failed to rely upon any legal authority in support of his petition below, we have been provided with no legal authority to support the proposition that “personal property” includes a beneficiary interest in a Trust.   Our own research uncovered the principle that “ ‘[t]he extent of the interest of the beneficiary of a trust depends upon the manifestation of intention of the trustor, and ordinarily if real property is held in trust, and by the terms of the trust a duty is imposed upon the trustee to sell it and hold the proceeds in trust or distribute the proceeds, the interest of the beneficiary is personal property.’ ”  (Estate of Tutules (1962) 204 Cal.App.2d 481, 492.)   Because the sale of real property is not at issue here, that proposition has no bearing on the instant case.

FN3. It does not appear that the Trust specifically provided that George's interest as a Trust beneficiary is personal property.  (See, e.g., Wright v. Security-First Nat. Bank (1939) 35 Cal.App.2d 264, 274-275.).  FN3. It does not appear that the Trust specifically provided that George's interest as a Trust beneficiary is personal property.  (See, e.g., Wright v. Security-First Nat. Bank (1939) 35 Cal.App.2d 264, 274-275.)

FN4. Former Welfare and Institutions Code section 6655 provided, in relevant part:  “If any person committed to a State mental hospital has sufficient estate for the purpose, the guardian of his estate shall pay for his care, support, maintenance, and necessary expenses at the mental hospital to the extent of the estate.”  (Stats.1967, ch. 1667, p. 4107 [repealed].).  FN4. Former Welfare and Institutions Code section 6655 provided, in relevant part:  “If any person committed to a State mental hospital has sufficient estate for the purpose, the guardian of his estate shall pay for his care, support, maintenance, and necessary expenses at the mental hospital to the extent of the estate.”  (Stats.1967, ch. 1667, p. 4107 [repealed].)

FN5. Former Welfare and Institutions Code section 6650 provided, in relevant part, that “the estates of [a mentally ill person or inebriate] and the guardian and administrator of the estate of such mentally ill person or inebriate, shall cause him to be properly and suitably cared for and maintained ․ and the estate of such mentally ill person or inebriate, shall be liable for his care, support, and maintenance in a state institution of which he is a patient.”  (Stats.1967, ch. 1667, p. 4107 [repealed].).  FN5. Former Welfare and Institutions Code section 6650 provided, in relevant part, that “the estates of [a mentally ill person or inebriate] and the guardian and administrator of the estate of such mentally ill person or inebriate, shall cause him to be properly and suitably cared for and maintained ․ and the estate of such mentally ill person or inebriate, shall be liable for his care, support, and maintenance in a state institution of which he is a patient.”  (Stats.1967, ch. 1667, p. 4107 [repealed].)

_, J.

_, P.J. BOREN _, J. CHAVEZ