Southern California First National Bank v. Jones

Opinion

STEPHENS, J. Edna A. Jones, a named beneficiary of a trust created by the will of her brother, Charles Courtney Jones, appeals from a court order directing that certain sums of money be paid out of the corpus of the trust for the benefit of decedent’s wife, Mrs. Patricia M. Jones. The respondent herein, Southern California First National Bank, is the conservator of the estate of Mrs. Jones.

[276] Facts

The will of Charles Courtney Jones provided for the outright distribution of certain assets to his wife, and for the distribution of the remainder in trust for the benefit of the widow, and others, including appellant. The beneficial interests in the trust were given to the wife for life, then in varying shares to the deceased’s sister (appellant), niece, brother-in-law, and sister-in-law. Importantly, the trustee was given power to invade the corpus of the trust, as follows: “If the trustee deems the net income payable hereunder not sufficient to provide for the proper support, maintenance, comfort, happiness, education, and recreation of any beneficiary, (1) whether or not such beneficiary is at the time receiving or entitled to receive income hereunder, and (2) without taking into consideration other income or financial resources of such beneficiary, it may as often as it deems necessary, pay to or apply for the use and benefit of such beneficiary, such additional part, up to and including the whole thereof, of the principal of the trust estate, or if the trust estate has been divided into shares or departments, of the principal of the respective share or department, all as the Trustee deems adequate in its absolute discretion.” (Paragraph C(6) of the Decree of Distribution.)

Following the death of Mr. Jones, his widow, suffering from grief and poor health, was made the subject of conservatorship proceedings. When the Jones’ estate of over $400,000 was first distributed,1 Title Insurance and Trust Company (“TI”), named under the will as cotrustee with Mrs. Jones, was appointed as sole trustee. A few months later, TI, who had served as conservator of Mrs. Jones’ estate, was relieved of its conservatorship duties, and Southern California First National Bank was named as successor. At the same time, conservatorship proceedings were transferred to San Diego County where the conservatee resided. Upon its resignation as conservator, TI handed its successor, Southern California First National Bank, an accounting of conservatorship expenses. In examining this accounting it was discovered that none of the expenses incurred for the widow’s estate were reimbursed from the corpus of the trust pursuant to the provisions authorizing the trustee to invade the trust corpus. Consequently, the bank petitioned the court to order TI, in its capacity as trustee, to so reimburse the conservatorship estate of Mrs. Jones.