In California trust disputes, it’s often the case that the interests of parents and their minor children are involved—and sometimes those interests can conflict. When this occurs, it’s important to understand the mechanisms by which the court can act on behalf of a minor child to protect them against settlement agreements that may not be to their advantage.
A probate court can appoint a guardian ad litem (GAL)—a neutral party with no personal stake in the distribution or restructuring of the trust—to advocate for the interests of a minor. However, a recent appellate court case in California confirms that while a court may appoint such a guardian, it doesn’t need to in order to consider whether a settlement is appropriately in the interest of a minor child.
Chui v. Chui: Litigation over Trust Assets
The case in question, Chui v. Chui (2022) 75 Cal.App.5th 873, involved the estate of King Chui and May Chui, a married couple who had put significant assets, including residential apartment complexes, related business entities, and other real property, into a revocable trust. The couple had three children: Robert, Margaret, and Esther. May passed away in 2004, and her share of the assets was allocated to irrevocable subtrusts. Her husband’s share was put into a revocable subtrust, which he subsequently amended multiple times to favor his son Robert and Robert’s wife, Christine.
In 2011, King resigned as trustee due to his decline in cognitive abilities, at which point Robert and his sister Margaret became successor co-trustees. In 2012, Esther, the other sister, filed a petition in Los Angeles Superior Court, alleging that her siblings had improperly delegated their co-trustee duties to Christine. Esther requested that a GAL be appointed for Christine’s children, then ages 10 (Jacqueline) and 8 (Michael). Over objections from the children’s mother, the court appointed Jackson Chen, an attorney, to serve as GAL.
Robert died in 2013, followed by his father in 2014. Litigation continued over the next several years, with Esther alleging that Robert and Christine had committed elder financial abuse against King and improperly taken trust assets amounting to $10 million. As trial was set to begin in 2018, however, the parties informed the court they had reached a settlement agreement.
Contesting the Settlement
Within months of the settlement, Christine sought to have it set aside, despite the fact that her counsel had recited the terms to the court at the time of settlement and she had affirmed she understood and agreed to them. She claimed her consent was legally invalid because she had been under the influence of codeine, sleep-deprived, and ill. The court denied her motion and enforced the agreement.
Shortly thereafter, GAL Chen, who had not been party to the initial agreement, provided a report to the court in which he detailed changes he felt should be made to the agreement to protect the interests of the minor children. He ultimately agreed to adjusted terms that the judge approved.
The Appellate Decision
In 2022, the Court of Appeal confirmed the validity of the agreements. In the appeal, Christine’s daughter, Jacqueline, had claimed GAL Chen could not enter into an agreement on her behalf because he had only been appointed guardian in one of several pending cases related to the trust. The court rejected that argument because the appointment of a GAL is discretionary, not mandatory; when one is not appointed, the probate judge serves as the “guardian of the minor.” Thus, she had not been left without representation, as the judge maintained an oversight role protecting her rights.
Christine alleged that, having been appointed guardian of her children’s estates, she had the right to repudiate the agreement the GAL had entered into on behalf of her children. The probate judge found that this objection was inconsistent with the interests of the children, and the appellate court agreed. Because overturning the agreements would favor her over her children as to trust assets, she had a clear conflict of interest.
Additionally, the court rejected the argument that the minor children could disaffirm the agreement, holding that the GAL had the statutory right to reach an agreement on their behalf to protect them from their own improvidence or the manipulation of others.
The ultimate takeaway from this case is that a California judge may appoint a guardian ad litem to protect the interests of minor children in a settlement agreement, but does not have to. As a practical matter, however, judges are inclined to do so, given the volume of business before the courts and the necessity for careful consideration in complex disputes. A GAL is more likely than a judge to have the time necessary to determine whether a settlement agreement serves the best interests of children unable to advocate for themselves.
When conflict arises over the administration of a trust, litigation can be complicated and costly. Expert legal representation is critical to protecting your rights and resolving the case effectively. At NM Law, we specialize in estate law, and we can defend your interests in court when necessary. To find out more about our services, contact us here.