## Facts

- William A. Giraldin created a revocable inter vivos trust in 2002 and named his son Timothy trustee.
- William was the sole beneficiary during his lifetime; after William’s death, William’s wife Mary had lifetime benefits, with the remainder to William’s nine children in equal shares after both William and Mary died.
- The trust reserved to William broad written powers, including to amend or revoke, remove the trustee, and direct or approve trustee actions and investments.
- During William’s lifetime, a large portion of trust assets was invested in a company owned by Timothy and William’s other son Patrick; the stock later became worthless.
- While William was alive, Timothy made substantial disbursements and loans from trust funds to himself and Patrick.
- After William’s death, several children who were remainder beneficiaries filed a probate/trust proceeding alleging Timothy’s mismanagement and self-dealing while the trust was revocable.
- The probate court found fiduciary breaches and ordered Timothy to restore nearly $5 million to the trust.
- The Court of Appeal reversed, ruling the beneficiaries lacked standing because the trustee owed duties only to William while the trust was revocable.

## Issues

1. Whether, after the settlor of a revocable trust dies and the trust becomes irrevocable, beneficiaries have standing to sue the trustee for breaches of fiduciary duty committed during the settlor’s lifetime when the trust was still revocable.

## Decision

- The California Supreme Court reversed the Court of Appeal.
- The Court held that, after the settlor’s death, beneficiaries have standing to sue the trustee for breaches of fiduciary duty owed to the settlor during the settlor’s lifetime.
- The matter was remanded for further proceedings consistent with the opinion, allowing adjudication of the beneficiaries’ claims based on the alleged pre-death misconduct.

## Legal Principles

- While a trust is revocable and the settlor is alive, a trustee who is not the settlor owes fiduciary duties to the settlor rather than to contingent beneficiaries, and generally accounts to the settlor alone.
- After the settlor’s death, beneficiaries may enforce the trustee’s pre-death fiduciary obligations owed to the settlor when the alleged breach reduced trust value contrary to the settlor’s intended disposition.
- Post-death beneficiary suits in this setting are derivative of the settlor’s rights; they do not rest on a direct, contemporaneous fiduciary duty owed to beneficiaries during the settlor’s lifetime.

## Conclusion

The court allowed beneficiaries of a revocable trust to pursue, after the settlor’s death, claims for the trustee’s alleged pre-death breaches of duties owed to the settlor, because otherwise trust assets could be depleted in a manner that defeats the settlor’s plan without an effective remedy.


In re Estate of Giraldin, 55 Cal. 4th 1058, 290 P.3d 199 (Cal. 2012)