Salter v. Lerner

Glenn Lerner (defendant) and Elsa Lerner created a trust with themselves as trustees. Under the trust’s terms, when Elsa died in 2006, the trust was to be divided into three subtrusts, with certain trust assets to be placed in each. Glenn, who was then the sole trustee, was entitled to the income from all the subtrusts and had broad discretion to invade the principal of each subtrust, meaning that he could use the assets themselves. Upon Glenn’s death, the trust’s terms stated that most of the remaining assets would pass to Elsa’s daughters, Carin Salter and Jennifer Segal (plaintiffs). When Glenn started making extravagant purchases and taking extended luxury vacations, Salter and Segal became concerned that he was abusing his authority as trustee. They sought information confirming creation of the three subtrusts, showing the allocation of assets between the subtrusts, and showing which funds Glenn was using to support his new lifestyle. Glenn refused to provide the information, citing a trust provision waiving any reports and accountings required by California law to the extent possible. Salter and Segal wanted to petition for a court order requiring Glenn to provide information reasonably necessary to allow Salter and Segal to protect their interests in the trust. However, they were concerned that filing such a petition would violate the trust’s no-contest clause, which stated that no distributions would be made to anyone who contested the trust’s provisions. Salter and Segal therefore filed a preliminary action asking the probate court to determine whether the proposed petition would violate the no-contest clause. The probate court held that it would not, and Lerner appealed.