Essay 2Answer according to California law.In 2004, Mary Mend…
Essay 2Answer according to California law.In 2004, Mary Mendocino set up a revocable inter vivos trust. She named herself as the initial trustee and nominated her neighbor, Larry Lake, as successor trustee upon Mary’s death or incapacity. She did not name any other successor trustees. The trust instrument directs the trustee to distribute from time to time as much of the income from the trust as the trustee, in his sole and absolute discretion, deems appropriate to each of Mary’s three children: Karen Kings, Lisa Lassen, and Mariah Mariposa. The trust specifies that at the death of the last of the three named children, the trust was to terminate, and the remaining assets were to be distributed to her then living descendants, by representation. The trust provided that the trustee was exempt from having to provide an accounting to any beneficiaries. Mary died in 2012. She was survived by her children, Karen, Lisa, and Mariah. At the time of Mary’s death, Karen had one child, Susan and Lisa had 2 children, Audrey and Christian. Mariah did not have any children. Larry took over as successor trustee upon Mary’s death. At the time, the trust had $500,000 in a checking account and $2,500,000 in certificates of deposit, all of which were held at Big Bank. Karen had very serious medical problems and could not work. Because Lisa and Mariah had sufficient assets of their own and because Larry didn’t think they needed the money, Larry distributed nearly all of the trust’s income to Karen. The rest was paid in equal shares to Lisa and Mariah. In 2013, Larry loaned his daughter Maxine $500,000 so Maxine could buy a beachfront condo. Maxine had credit problems and could only qualify for very high interest rates through traditional lenders. The loan was secured by the condo and was interest free. The average mortgage rate at that time was 4.5%. In 2014, Larry’s son David went through a divorce. Believing that David needed the best representation possible, Larry agreed to loan David money from the trust to pay for David’s $800/hour divorce attorney. Larry cashed in some of the trust’s certificates of deposit to pay these legal fees, which ended up totaling $175,000. Larry told David that it was a loan that Larry expected would be repaid. David has not made any payments on the loan, and Larry has not asked David for payments. Maxine’s loan payments became less regular in the beginning of 2015, and stopped completely in mid-2016. Larry sent Maxine a few e-mails in 2016 asking about her payments, but had no response. In 2017, Larry reluctantly foreclosed on the condo. He sold it for $700,000 in mid-2017. Every year starting in 2012, Larry paid himself $10,000 a year in trustee fees. The trust instrument allowed for “reasonable” fees. Larry’s oversight of the trust included looking over the statements sent by the property management company and reviewing the monthly brokerage statements. He also hired a CPA to do the trust’s taxes. Lisa and Mariah have filed a petition in court to have Larry removed as trustee, to terminate the trust, and force the trust’s outright distribution to Karen, Lisa, and Mariah. 1) What claims, if any, do Lisa and Mariah have against Larry? Discuss. 2) Are Lisa and Mariah likely to be successful in terminating the trust? Discuss why or why not.