## Facts

- Lowell T. Patton and Mary Lou Patton created three irrevocable charitable remainder unitrusts in 2002 for their children, funded with approximately $2.4 million in professional minor league baseball stock.
- Each trust paid lifetime income to a child, with the remainder at the child’s death passing to designated charities.
- Attorney Matthew B. Mack drafted the trusts, served as administrative trustee, and was affiliated with Estate Strategies for Charities, Inc.; Mark C. Sherwood served as management trustee.
- The trust instruments expressly reserved to Patton (as settlor) powers including: (1) changing remainder beneficiaries, (2) removing and replacing trustees, and (3) reviewing trustee accountings and approving or objecting within 90 days of mailing.
- If Patton objected in writing within 90 days, the trusts gave him up to one year from the mailing date to pursue remedies including a breach-of-trust claim, a petition for a court-supervised accounting, or other relief.
- After disputes over trustee conduct and fees, Patton petitioned to remove Mack and Sherwood; the trustees sought approval of their accountings, payment of fees and expenses from trust assets, and releases from liability.
- Patton filed written objections alleging excessive fees, mismanagement, and breaches of fiduciary duty.

## Issues

1. Whether a settlor who expressly reserved the power to object to trustee accountings and pursue remedies has standing under California Probate Code § 17200 to petition concerning a trust’s internal affairs.
2. Whether the probate court erred by limiting standing to “beneficiaries” and striking the settlor’s accounting objections despite the trust’s express enforcement provisions.

## Decision

- The Court of Appeal reversed the probate court’s standing ruling and the related orders.
- The court held that a settlor of a charitable remainder unitrust may petition regarding internal trust affairs, including objecting to accountings, when the trust instrument expressly reserves that power.
- The court reinstated Patton’s objections for consideration and remanded for further proceedings on the accountings, fees, expenses, releases, and alleged breaches of trust.

## Legal Principles

- Probate court jurisdiction over trust administration is intended to permit resolution of the full controversy concerning internal trust affairs once properly invoked.
- Although Probate Code § 17200 refers to petitions by a “trustee or beneficiary,” a settlor may have enforceable rights to participate in court supervision when the trust instrument expressly grants the settlor powers to review, object to accountings, and pursue remedies.
- Trust terms should be harmonized with the Probate Code; express settlor enforcement provisions are not negated merely because the settlor is not a statutory “beneficiary.”
- Striking objections and approving accountings without considering claims by a person expressly authorized by the trust to object can constitute legal error, particularly where the trust makes the settlor an oversight actor.

## Conclusion

Because the unitrusts expressly granted Patton the right to review and object to trustee accountings and to seek judicial remedies, he had standing to challenge the trustees’ accountings and related requests; the probate court’s contrary ruling was reversed and the matter remanded for consideration of his objections and claims.


Patton v. Sherwood, 152 Cal. App. 4th 339 (Cal. Ct. App. 2007)