In a third lawsuit in as many months, Katherine Feinstein, who has limited power of attorney over her mother, Senator Dianne Feinstein, accuses the trustees of a marital trust established by Feinstein’s late husband Richard Blum of elder abuse.
Previous lawsuits alleged that the trustees of Richard Blum’s trust aren’t making the necessary distributions to reimburse Feinstein for her medical expenses, as well as refusing to execute the necessary steps to allow Feinstein to sell a Stinson Beach home that she owned with Richard.
Per a statement to SFGATE, Steven P. Braccini, an attorney for two of the trustees, Michael Klein and Marc Scholvinck, fired back at Katherine, claiming “The trustees have acted ethically and appropriately at all times; the same cannot be said for Katherine Feinstein.”
The sharp worded reply by Braccini comes in response to the allegations that Klein and Scholvinck are intentionally stalling payments to the senator because they “intend to benefit Richard Blum’s [biological] daughters, who stand to inherit millions of dollars that should go to Senator Feinstein if the Trustees never make the required distributions to her” as well as Katherine’s request that the court suspend the trustees pending a decision on whether to remove them altogether.
It's still unclear just how much Sen. Feinstein is actually involved in the barrage of lawsuits against the various trusts, as many wonder about her mental state following her bout of health issues.
The basis for the most recent claim of financial elder abuse hinges on the fact that the trustees have allegedly failed to fund the $5 million marital trust and make a required $1.5 million annual payment to reimburse her for her medical expenses as Blum intended and to provide an accounting of estate funds, despite Blum having died over a year and a half ago.
Per the most recent lawsuit, the trustees claimed back in March "that Blum’s estate lacked liquidity, and had a large estate tax liability." However, the filing also alleges that Blum's interest in a hotel in Berkeley, California, in May, was reportedly sold for $163 million, but the trustees never explained why they didn't use any of those proceeds to fund Feinstein's marital trust.
California’s Welfare and Institutions Code Section 15610.30 is the governing authority for claims of financial elder abuse. Benazeer “Benny” Roshan, partner and chair of the Trust and Probate Litigation Group at Greenberg Glusker in Los Angeles, explains that individuals 65 years of age and older are considered vulnerable for purposes of this law, which defines financial elder abuse as an act of not only “obtain[ing]” but also “retain[ing]” assets belonging to an elderly person for a “wrongful use or with intent to defraud or both.” Per Roshan, the “wrongful use” element of the statute can be satisfied if the party accused of wrongful retention of property “knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.”
“The key question here appears to be whether the delay in funding the marital trust was reasonable, given many factors including Senator Feinstein’s advanced age and financial circumstances,” opines Roshan.
“If facts come to light that the trustees had the means to fund her marital trust and failed to do so, it would appear that their failure could result in liability and damages for financial elder abuse,” she added.