Estate of Gross

California Court of Appeal May 23, 1963 No. Civ. No. 20887Published

Before: Salsman

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Holding. The court held that while the trust instrument did not grant the trustees absolute discretion to retain trust property, the trustees did not abuse their ordinary discretion in choosing to retain the property, as their decision was reasonable and aligned with the trustor's intent.

Issues

Whether the trust instrument granted the trustees absolute discretion to retain trust property.
Whether the trustees abused their discretion by retaining property that produced low income relative to its current market value.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the trustor has not vested absolute discretion in his trustees to retain the ranch property in the trust, but that the order appealed from must nevertheless be affirmed because no abuse of discretion is shown”

“The exercise of such discretionary power by the trustees is subject to control by the court if not reasonably exercised.”

“the trustees have not abused their discretion in retaining the Santa Theresa Rancho but, on the contrary, have exercised commendable judgment”

216 Cal.App.2d 563 (1963) Estate of EDWARD B. GROSS, Deceased. NANCY GROSS HAYWARD, Petitioner and Appellant,

BANK OF AMERICA, as Trustee, etc., et al., Objectors and Respondents.

Civ. No. 20887. California Court of Appeals. First Dist., Div. Three.

May 23, 1963. Beilenson, Meyer, Rosenfeld & Susman and Peter R. Cohen for Petitioner and Appellant. [565]

Thompson & Thompson, Rankin, Oneal, Luckhardt & Center and C. E. Luckhardt for Objectors and Respondents.

SALSMAN, J.

The appellant is an income beneficiary of a trust established by the will of Edward B. Gross, and appeals from an order denying her petition to require the trustees to sell certain trust property claimed by appellant to be unproductive of income.

By his will, Edward B. Gross devised the residue of his estate to trustees who are respondents here. After providing for the payment of $200 per month to his sister, the remainder of the income of the trust is given 4- 10ths to the trustor's widow, Christine P. Gross, 3-10ths to a daughter, Theodora Gross Anderson, and 3-10ths to the trustor's other daughter Nancy Gross Hayward, the appellant. The corpus of the trust is substantial, and consists of personal property and numerous parcels of real estate. One of the assets of the trust estate, and the one which gives rise to the present dispute, is a ranch known as the Santa Theresa Rancho, consisting of approximately 758 acres and located a few miles south of the City of San Jose, on U.S. Highway 101. This parcel of property was appraised in July 1954 in the estate proceeding and its value was fixed at $365,907. Various parcels of this property are rented to tenants for uses appropriate to the character of the land, and at the time of distribution of the ranch to the trustees it produced a reasonable income based upon its then appraised value. Since distribution the property has enjoyed a large increase in value, and at the time of hearing on appellant's petition the total value of the ranch was stated to be in excess of $2,500,000. Although the income from the ranch has increased, the increase in income has not kept pace with the increase in value, and current income amounts to about 1 1/2 per cent of the present estimated value of the property.

Estate of Gross

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SALSMAN, J.

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