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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Nov-24-2010 12:39 pm
Case Number: PTR-10-293933
Filing Date: Nov-24-2010 12:36
Juke Box: 001 Image: 03042836
GENERIC PROBATE PLEADING
IN THE MATTER OF THE ALOHA AILES 2000 TRUST DATED JUNE 8, 2000 TF
001P03042836
Instructions:
Please piace this sheet on top of the document to be scanned;a
VIRGINIA PALMER #98186
FITZGERALD ABBOTT & BEARDSLEY LLP
1221 Broadway, 21° Floor F I L E D
Oakland, California 94612 San Franciaco County Superior Court
Telephone: (510) 451-3300
Facsimile: (510) 451-1527 NOV 24 2010
Email: vpalmer@fablaw.com
Attomeys for Fidelity Personal Trust Company, FSB, GLE ee T ve COURT
Petitioner BY: nha
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
In re Case No.: PTR-10-293933
The Aloha L. Ailes 2000 Trust dated June 8, AMENDED PETITION FOR
2000 INTERPRETATION AND
INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE
TERMINATION OF TRUST, AND TO
ASCERTAIN BENEFICIARIES
(Probate Code § 17200(b)(1)(4), and (13)(6)
Hearing Date:
Time: 9:00 a.m.
Dept.: Probate
Room: 204
Petitioner, Fidelity Personal Trust Company, FSB (“Fidelity”), brings this Petition for
Interpretation and Instructions Regarding Trust Provisions, to Approve Termination of Trust.
and to Ascertain Beneficiaries (the “Petition”).
I. INTRODUCTION
Petitioner alleges:
1. Petitioner is the successor Trustee (“Trustee”) of the Aloha L. Ailes 2000 Trust
dated June 8, 2000 (the “Trust”), of which Aloha L. Ailes (the “Decedent” or “Aloha”) was the
Settlor and Trustee. A complete copy of the Trust is attached hereto and incorporated herein as
1.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) 4386473.210
1
~
So
Exhibit A. A copy of the Trustee’s acceptance of Trust is attached hereto and incorporated
herein as Exhibit B.
2. Fidelity Personal Trust Company, FSB, does business at 8 Montgomery Street,
San Francisco, California, and the venue for the administration of the Trust is San Francisco
County.
3. Aloha L. Ailes died on October 26, 2009.
4, Pursuant to Probate Code § 17200(a), the Trustee may petition the Court
regarding the internal affairs of the Trust. This Petition concerns the internal affairs of the
Trust. Specifically, the Trustee seeks instructions regarding (a) the construction and
interpretation of Trust provisions, (b) the termination of the trust, and (c) ascertaining a
beneficiary of the Trust.
5. As set forth in detail below, the Trust contains conflicting dispositive provisions.
Consequently, the Trustee requests the Court's interpretation and instructions regarding the
distribution of the Trust’s assets. Without the Court's assistance, the administration of the Trust
and the distribution of the Trust’s assets cannot occur.
I. CONSTRUCTION OF TRUST
1, Relevant Terms Of The Trust
The dispositive provisions of the Trust regarding the distribution of the Trust
estate are set forth in Paragraphs 4.1, 4.2, and Article 5 of the Trust. These provisions contain
conflicting dispositive language. Set forth below in their entirety are Paragraphs 4.1, 4.2, and
Article 5 of the Trust.
“4.1 Disposition Upon My Death. Upon my death, the Trustee shall allocate
the trust estate, including the property held in the trust estate at the date of my
death and the property transferred to the trust estate by reason of my death, as
follows:
“(a) Gifts of Tangible Personal Property. The Trustee shal] make
distributions of my tangible personal property as provided in ARTICLE 5,
“(b) Balance of the Trust Estate. The balance of the trust estate shall be
allocated as follows:
2.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
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“4.2 Disposition of Otherwise Undisposed of Property. If the disposition
of all or any portion of the trust estate is not otherwise directed under the
provisions of this Trust Agreement, or if all the beneficiaries otherwise
described in this Trust Agreement die before the complete distribution of the
trust estate, the Trustee shall distribute the remaining trust estate as follows: one
hundred percent (100%) to Visiting Nurses Program Hospice By The Bay
(“Visiting Nurses”) located at 1540 Market Street, San Francisco, CA 94102,
for its general purposes. This gift shall not be made unless, at the time of my
death, Visiting Nurses is qualified as a charitable organization to which gifts are
deductible for estate tax purposes under I.R.C. § 2055. If Visiting Nurses is not
so qualified, this gift shall be distributed to and among such qualified charitable
organizations, as the Trustee selects, whose charitable activities are substantially
similar to the charitable activities engaged in by Visiting Nurses.
“ARTICLE 5
GIFTS OF TANGIBLE PERSONAL PROPERTY”
“Upon my death, subject to the payment of, or satisfactory provision being made
for, all my debts and taxes (including all Estate taxes), the following
distributions shall be made by the Trustee from the trust estate.
“Twenty five percent (25%) of my entire estate shall be distributed outright to
Michael Howe. If Michael Howe predeceases me, then this disposition shall be
made in equal shares to Katie Stanley and David Sutton. In the event that either
Katie Stanley or David Sutton predeceases me, then the entire disbursement
shall be made to the survivor. In the event that Michael Howe, Katie Stanley
and David Sutton predecease me, then this disbursement shall become part of
the residue of my estate and be distributed as set forth below.
“Ten percent (10%) of my entire estate shall be distributed outright to Sandy
Babcock-Goates. If she predeceases me, this portion of my estate shall be
distributed to Les Goates.
“The remainder of my estate shall be distributed as follows: commencing with
the date of my death, distributions shall be made at least quarterly such that my
entire estate will be distributed over the succeeding ten (10) year period to the
following individuals equally: Barbara Hunt, Helga Prangl, Deborah Jorgensen,
George Smith, Sharon Williams and Judy Bush. In the event that Barbara Hunt
predeceases me, her share shall be distributed to Sandy Cabrea. In the event that
both Barbara Hunt and Sandy Cabrea predecease me, said share(s) shall be
distributed equally among Helga Prangl, Deborah Jorgensen, George Smith,
Sharon Williams and Judy Bush, as set forth herein. In the event that George
Smith predeceases me, his share shal] be distributed to Haley Maric Smith. If
George Smith and Haley Marie Smith predecease me, said share shall be
distributed to the children of Haley Marie Smith. In the event that any of the
above individuals predecease me and/or Haley Marie Smith has no children that
survive my death, the remainder of my estate shall be distributed equally to
those individuals named above who survive me.
“All my interest in my tangible personal property, not effectively disposed of
above, together with any insurance on such property, shall be distributed by the
Trustee outright as set forth above. In the event that none of the individuals set
3.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
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forth above survive my death, the Trustee shall distribute my estate outright to
the Hospice of San Francisco.”
2. Conflicting Trust Provisions
a. Paragraph 4.1(a) of the Trust requires the Trustee to make gifts of the
Settlor’s “tangible personal property” as set forth in Article 5. However, while the caption to
Article 5 refers to tangible personal property, the main dispositive provisions of Article 5 do
not. Instead, the primary dispositive provisions of Article 5 repeatedly refer to the distribution
of Settlor’s “entire estate.” Specifically, Article 5 can be summarized to provide a direction to
the Trustee to distribute as follows: twenty-five percent (25%) of Settlor’s “entire estate” to
“Michael Howe (or if he predeceases the Settlor, then said twenty-five percent (25%) should be
distributed to Katie Stanley and David Sutton in equal shares)'; ten percent (10%) of Settlor’s
“entire estate” to Sandy Babcock-Goates; and “the remainder of [Settlor’s] estate” is to be
distributed quarterly, over a 10-year period, to Barbara Hunt, Helga Prangl, Deborah
Jorgensen,’ George Smith, Sharon Williams, and Judy Bush*. Article 5 concludes by providing
that “all my interest in my tangible personal property, not effectively disposed of above,
together with any insurance on such property, shall be distributed by the Trustee outright as set
forth above."
b. Not only is it unclear whether the Settlor intended to distribute only her
“tangible personal property” or her “entire estate” under Article 5, but there is also a conflict
regarding what the Settlor meant when using the phrase “tangible personal property.” Attached
hereto as Exhibit C is a letter from Jeffrey M. Weiss (“Weiss”), Aloha’s estate planning
attorney, which states that Aloha intended Paragraph 4.1(a)’s reference to “tangible personal
property” to include “any and all assets owned by Aloha other than real estate.” See Exhibit C.
' Michael Howe predeceased the Settlor. Therefore, his twenty-five percent share shail be distributed to Katie
Stanley and David Sutton in equal shares.
> Deborah Jorgensen predeceased the Settlor. Therefore, Deborah Jorgensen’s share lapses.
3 Judy Bush predeceased the Settlor. Therefore, Judy Bush’s share lapses.
4.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST.
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) 4386473.2f
{
o)
However, Aloha’s intention, as recalled by Weiss, conflicts with the definition of “tangible
personal property” set forth in Paragraph 14.24(b) of the Trust, which provides as follows:
“The term ‘tangible personal property’ includes clothing, jewelry, and other
personal effects; household furniture, furnishings, equipment, and appliances
(including rugs, linen, and other household decorations); china, silverware,
glassware, crystal, and other household items of use and decoration; books,
pictures, works of art (including paintings, sculptures, and works on paper),
antiques, stamp and coin collections, wine, and other collectibles; automobiles,
boats, other vehicles, and accessories to vehicles; and other items of domestic,
houschold, or personal use. ‘Tangible personal property’ shal! not include
ordinary currency, cash, or bullion or property primarily held for investment
purposes, such as investment funds, or any property held for use in a trade or
business.”
c. The Trustee had the tangible personal property, as defined in Paragraph
14.24(b) appraised by licensed appraisers at Clars Auction Gallery. The total value of the
jewelry in the Trust was appraised at $3945.00. The appraisers determined that the furniture
and furnishings were not of sufficient value to appraise. Therefore, the overall value of the
tangible personal property of the Trust is less than $4,000. The remaining estate is worth
approximately $750,000.
d. Given the direction in Paragraph 4.1(a) regarding distribution of Settlor’s
“tangible personal property” under Article 5, the conflicting multiple references in Article 5 to
Settlor’s “entire estate,” the conflict regarding the definition of “tangible personal property” in
Paragraph 14.24(b) of the Trust, and in light of the interpretation of the Trust’s language
supplied by Weiss, the Trustee requests that the Court interpret and instruct the Trustee
regarding the following:
@ Should the phrase “tangible personal property” be defined as set
forth in Paragraph 14,24(b) of the Trust or as defined by Weiss to include “any and all assets
owned by Aloha other than real estate.”
Gi) _Is the gift to Katie Stanley and David Sutton in equal shares (as a
result of Michael Howe predeceasing the Settlor) a gift of twenty-five percent (25%) of the
Settlor’s “tangible personal property” or twenty-five percent (25%) of Settlor’s “entire estate”?
5.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
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(iii) Is the gift to Sandy Babcock-Goates a gift of ten percent (10%) of
the Settlor’s “tangible personal property” or ten percent (10%) of the Settlor’s “entire estate”?
(iv) _ Is the gift of the “remainder” under Article 5, to Barbara Hunt,
Helga Prangl, George Smith and Sharon Williams a gift of the remaining sixty-five percent
(65%) of Settlor’s “tangible personal property” or a gift of the remaining balance of Settlor’s
“entire estate”?
(v) If the gift described in item d. above is a gift of only the Settlor’s
remaining “tangible personal property”, then does all the rest, residue and remainder of
Settlor’s estate pass to Visiting Nurses Program Hospice By The Bay under Paragraph 4.2 of
the Trust?
e. Michael Howe, who is named to receive "twenty five percent (25%) of
my entire estate", was the decedent's husband. As he died before Aloha, the Trust states that
his share is to be divided equally between Katie Stanley and David Sutton, who were Michael
Howe's children and, therefore, her stepchildren. Sandy Babcock-Goates and the other
beneficiaries were all long-time friends of Aloha's.
f. There are two possible interpretations of the Trust. In these
interpretations, the term "tangible personal property" refers to property as defined in
Paragraph 14,24(b).
Interpretation I
25% of the Tangible personal property in equal shares to Katy Stanley and
seo. [This distribution would have an approximate value of
10% of the Tangible personal property to Sandy Babcock-Goates. [This
distribution would have an approximate value of $400.]
65% of the Remainder tangible personal property to be held in trust for ten years
with quarterly distributions to five beneficiaries. [This distribution
would have an approximate value of $2,600.]
If a beneficiary of the remainder of tangible personal property dies
before the ten-year period elapses, his or her share is distributed to
Hospice of San Francisco
6.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
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The remainder of the estate is distributed to “Visiting Nurses
Program Hospice By The Bay.” Approximately $750,000
Interpretation II
25% of the Entire estate in equal shares to Katy Stanley and David Sutton.
[Approximately $187,000 and 25 % of the tangible personal
property|
10% of the Entire estate to Sandy Babcock-Goates [Approximately $75,000 and
10% of the tangible personal property.]
65% of the Remainder of the entire estate distributed among the remaindermen.
[Approximately $487,500 plus 65% of the tangible personal property
distributed quarterly over 10 years.]
The remaining balance of any sub-trust created above for the four
remaining beneficiaries, who die before full distribution in 10 years
Bousbe distributed to “Visiting Nurses Program Hospice By The
3. Possible Solution:
On May 27, 2010, the Trustee, through its counsel, wrote to all the beneficiaries
addressing these issues. A copy of that letter without attachments is attached as Exhibit E and
incorporated by reference. All eight of the remaining beneficiaries approved the proposed
solution, which is described below.
4. The proposed resolution is:
a All the tangible personal property not requested by a beneficiary be sold
and added to the estate;
b. The entire estate be distributed as follows:
25% to Katie Stanley and David Sutton in equal shares
10% to Sandy Babcock-Goates
65% to Barbara Hunt, Helga Prangl, George Smith, Sharon Williams and
Hospice By The Bay in equal shares
5. Only one beneficiary wants any of the tangible personal property, which shall be
provided to this beneficiary.
4 See Paragraph [1] Identity of Beneficiary below.
5 See Paragraph IIT Identity of Beneficiary below.
7.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) #386473.2TI. IDENTITY OF BENEFICIARY
1. Paragraph 4.2 of the Trust provides that in the event disposition of all or any
portion of the Trust estate is not directed elsewhere in the Trust, then the Trustee shall
distribute the remaining Trust estate to “Visiting Nurses Program Hospice By The Bay
("Hospice By The Bay") located at 1540 Market Street, San Francisco, CA 94102, for its
general purposes.” The only hospice organization that Petitioner could find located at 1540
Market Street, San Francisco, CA, is “Hospice By The Bay”, which has subsequently relocated
to 1902 Van Ness Avenue, 2p loor, San Francisco, CA 94109.
2. Petitioner has been informed that there is no program formally referred to as the
“Visiting Nurses Program" at Hospice By The Bay. Instead, all of the nurses at Hospice By
The Bay are visiting nurses, as it has no inpatient hospice facility of its own. See Declaration
of Sharon Lew, Chief Executive Officer, Hospice By The Bay, which is attached as Exhibit D
and incorporated by reference. By conducting internet searches, staff of Petitioner's counsel
located "Sutter Visiting Nurses and Hospice of San Francisco," which exists as part of Sutter
Health. Upon inquiry, counsel was informed that Sutter Visiting Nurses and Hospice of San
Francisco has never been located at 1540 Market Street, San Francisco, and that its prior
address was #1 South Van Ness, San Francisco, California.
3. Pursuant to Probate Code Section 17200(b)(4), Petitioner requests that the Court
ascertain the intended beneficiary under Paragraph 4.2 of the Trust. Petitioner is informed and
believes that Hospice By The Bay, which was previously located at 1540 Market Street, San
Francisco, CA, was the intended beneficiary under Paragraph 4.2 of the Trust.
IV. TERMINATION OF TRUST
1. Article 5 provides for the distribution of Sixty-five percent (65%) of the
“remainder” of the estate on a quarterly basis, over a ten (10) year period, to Barbara Hunt,
Helga Prangl, Deborah Jorgensen, George Smith, Sharon Williams and Judy Bush. The
Petitioner is informed and believes that both Judy Bush and Deborah Jorgensen predeceased
the Scttlor and that under the terms of the Trust, their shares will be divided among the four
8.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) #386473.2remaining beneficiaries. The Trust estate is currently valued at approximately $750,000.
Sixty-five percent would be approximately $487,500 before expenses of administration.
Depending on the interpretation of the Trust, each sub-trust share could be approximately
$97,500 to $120,000. Petitioner is informed and believes that the cost to administer trusts of
this size, over a 10-year period, would significantly reduce the benefits to the beneficiaries of
the Trust, and needlessly diminish the trust estate.
2. Paragraph 11.5 of the Trust provides in relevant part that,
“atter my death, the Trustee may for any reason terminate any trust created
under this Trust Agreement and distribute any remaining trust estate, including
principal and undistributed income, to any one or more of the current
beneficiaries or the presumptive remainder beneficiaries of the trust in those
proportions as the Trustee determines, in a manner that conforms as nearly as
possible to my intention. In exercising his or her discretion to terminate a trust,
the Trustee may, but shall have no obtigation to, consider the interests of any
person other than the current income beneficiary, including any remainder
beneficiaries.
“If the Trustee determines that the size of a trust does not warrant the cost of
continuing that trust or that continued administration of any trust would be
impractical for any reason, the Trustee, without further responsibility or liability.
may transfer that trust property outright to the person or persons then authorized
or entitled to the income from it.”
3. Accordingly, Petitioner, after resolution of the issues in this Petition, seeks to
terminate the trust created under Article 5 of the Trust, under the power granted to it under
Paragraph 11.5 of the Trust and distribute the “remainder” of the Trust estate outright and free
of trust to Barbara Hunt, Helga Prangl, George Smith and Sharon Williams. Pursuant to
Probate Code Section 17200(b)(13), Petitioner seeks this Court’s approval of such trust
termination.
Vv. CONCLUSION
Probate Code Section 17200(a) authorizes a trustee to petition the court for instructions
concerning the internal affairs of the Trust. Pursuant to Probate Code Section 17200(b)(1), the
Trustee requests that the Court interpret the dispositive provisions of the Trust and instruct the
Trustee regarding the distribution of Trust assets. The Trustee also requests that the Court
9.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) #386473.2wn
approve the Trustee’s termination of the trust created under Article 5 and ascertain the intended
beneficiary under Paragraph 4.2 of the Trust.
Vi. NOTICE
The names and last known addresses of all persons entitled to notice of this Petition, as
far as known to Petitioner, are:
Michael Howe -- deceased
Judy Bush — deceased
Deborah Jorgensen — deceased
ee wn
Katie Stanley
43 Sistova Road
Balham, London SW 129QR
5. David Sutton
29 Grove Kings Hill
Kent
ME 19 4A5
United Kingdom
6. Sandy Babcock-Goates
1157 Valencia Street, #9
San Francisco, CA 94110
7. Barbara Hunt
2101 Anderson Lane, #216
Austin, TX 78757
8. Helga Prang]
555 Pershing Drive
Walnut Creek, CA 94597
9. George Smith
764 Second Avenue
Chula Vista, CA 91910
10. Sharon Williams
34 - 79 44" Street #4D
Long Island City, NY 11103
11. Hospice By The Bay
1902 Van Ness Avenue, 2" Floor
San Francisco, California 94109
12. Attorney General’s Office
State of California
P.O. Box 903447
Sacramento, CA 94203-4470
10.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) #386473.2WHEREFORE, Petitioner requests that the Court:
1. Interpret Paragraphs 4.1, 4.2, and Article 5 of the Trust;
2, Instruct and direct the Trustee to distribute the Trust pursuant to the Court’s
interpretation of Paragraphs 4.1, 4.2, and Article 5 of the Trust;
3. Ascertain the intended beneficiary under Paragraph 4.2 of the Trust;
4. Approve the Trustee’s termination of the trust created under Article 5 and direct
the Trustee to distribute any assets constituting the “remainder” of the Trust estate to Barbara
Hunt, Helga Prang], George Smith, Sharon Williams, and Hospice By The Bay in equal shares,
outright and free of trust; and
5. Any other and further orders that the Court considers proper.
Dated: November 24, 2010 FITZGERALP ABBOTT & BEARDSLEY LLP
By .
Virginia Palmer
Attorneys for Petitioner
Ul.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) 4386473.2VERIFICATION
I, Virginia Palmer, attorney for Petitioner, Fidelity Personal Trust Company FSB,
declare as follows:
I am the attorney representing Fidelity Personal Trust Company FSB, which is the
Petitioner in the within matter. | am signing this Verification on Fidelity Personal Trust
Company FSB's behalf due to the person in charge of this Trust is out of the county. I have
read the foregoing AMENDED PETITION FOR INTERPRETATION AND
INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE
TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES and know the
contents thereof and that the same is true of my own knowledge, except as to those matters
which are therein stated on information and belief and that as to those matters I believe it to be
true.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on November 24, 2010, at Oakland, California.
Lan
Virginia
Imer
12.
AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST
PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES
11/24/10 (26539) #386473.2TRUST AGREEMENT
FOR THE
ALORA L. AILES 2000 TRUST
Prepared by
Jeffrey M. Weiss, Esq.
Weiss & Weissman, Inc.ARTICLE 3
ARTICLE 4
4.1
42
43
ARTICLE 5
ARTICLE 6
6.1
6.2
63
TABLE OF CONTENTS
Right to Withdraw Property from the Trust Estate
Right to Amend the Trust Agreement ......... denen eter eee e eens L
Exervise of My Reserved Rights by Others bee
Manner of Exercise of My Reserved Rights ........000.0,......0.. 2
THE TRUSTOR'S TRUST....., bebe eee een eee ees
Distributions of Income and Principal .
Qualification for Government Benefits .....0. 00... cee cece eee e eee 2
ALLOCATION AND DISPOSITION OF THE TRUST ESTATE ...... 2
Disposition Upon My Death
Disposition of Otherwise Undisposed of Property
Rules Governing the Allocation of Trust Property
GIFTS OF TANGIBLE PERSONAL PROPERTY teeta tenons 3
DISCLAIMERS ....
Disclaimers Allowed .
Disclaimers by My Husband .........00 000 ccc cece cece ee eaee 5s
Effective Disclaimers 0.6... 6.00. e Lecce ener cence 4sARTICLE7 PAYMENT OF ESTATE TAXES .......... .
71
72
73
74
78
ARTICLE 8
81
8.2
ARTICLE 9
9.1
92
9.3
9.4
9.5
9.6
3.7
ARTICLE 10
10.1
10.2
10,3
10.4
10.5
10.6
10.7
10.8
10.9
General Rule: Estate Taxes Shall Be Prorated ............0000000005
Collection of Estate Taxes «2.0.20... eee cece cue c ect eeeecs 5
Abatement ..
Voting
Delegation by One Trustee o
Delegation by All Trustecs.........02. 00 -cc cece eee e ces sueeeeees
Delegation of Power to Expend 00... cece cece tees
Delegation of Investment AuthorityARTICLE 11 SPECIAL DISCRETIONARY POWERS OF THE TRUSTEE
11.1 To Make Payments and Disigibutions
11.2 To Divide Trosts 60.0.0... cece ceceee eee eee
11.3 To Consolidate Trusts 00.0.0. e ccc cece ccc cee cee ceeeee,
11.4 To Invest Trust Assets Together -
11.5 To Terminate Trusts ...........
11.6 To Postpone Distributions
11.7 To Permit Uso of Personal Residence
ARTICLE 12
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12,14
12.15
12.16
12.17
ARTICLE 13 SPECIAL PROVISIONS FOR INVESTMENT COUNSEL ... :
13.1 Reliance on Discretionary Investment Counsel 2.02. cee
13.2 Authority of Investment Counsel... 2.0.2.0... eee eee ees
iti13.3
13.4
13.5
ARTICLE 14
14.1
14.2
143
14.4
14.5
14.6
147
14.8
14.9
14.10
14.11
14.12
14.13
14,14
14,15
14.16
14.17
14.18
14.19
14.24
14.21
14.22
14.23 .
14.24
14.25
14.26
14.27
Compliance with Directions of Discretionary Investment Counsel . . ... 16
Reliance on Trustee
DEFINITIONS 2.200... e cece been eee een eens WZ
Federal Estate Tax Value
Generation-Skipping Transfer Tax. .14.28
14.29
14.30
1431
14,32
ARTICLE 15TRUST AGREEMENT
FOR THE
ALOHA L, AILES 2000 TRUST
I, Aloha L. Ailes, as Trustor and Trustee, declare that I have entered into this
Trust Agreement on June 8, 2000.
The Trustee agrees to administer all property added to the trust estate, in trust,
under the terme of this Trust Agreement.
The revocable trast initially established under this Trust Agreement shall be
known as the Aloba L. Ailes 2000 Trust. Successor trusts established under this Trust
Agreement shall be known by the names designated below in this Trust Agreement or ag
named by the Trustee.
ARTICLE 1
DECLARATIONS
Tam married to Micheel Howe and all references in this Trust Agreement to
"Michael " or “my husband" refer to him. 1 have no living or deceased children.
ARTICLE 2
RIGHTS RESERVED BY ME
As Trustor, | reserve the following rights under this Trust Agreement.
2.1 Right to Add Property to the Trust Estate. | reserve the right to transfer
additional propesty to the Trustes during my lifetime and at my death. All property
transferred to the Trustee shall be added to the trust estate and be administered under the
terms of this Trust Agreement. The Trustes is authorized and directed to accept the
additions to the trust estate. Any other person may transfer property to the Trustes to be
added to the trust estate, provided the property is acceptable ta me (if living) and the
Trustec.
2.2 Right to Withdraw Property from the Trust Estate. I reserve the right
to withdraw at any time all or any portion of my property held in the trust estate. The
property described in any notice of withdrawal shall be delivered immediately to me.
Upon any withdrawal, the property shall be transferred to me as if the trust had not been
created,
2.3 Right to Amend the Trust Agreement, I reserve the right to amend at
any time all or any part of this Trust Agreement, without obtaining the consent of or
giving notice to any beneficiary.
2.4 Right to Revoke the Trust Agreement. I reserve the right to revoke at
any time all or any part of this Trust Agreement, without obtaining the consent of or
giving notice to any beneficiary. If this Trust Agreement is revoked in whole or in part
during my lifetime, the Trustee shall immediately deliver to me the entire trust estate or
ALOHA LL, ALES 2000 Trustthe portion of the trust estate subject to revocation. Upon any such revocation, the
property shall be transferred to me as if the trust had not been created, Upon my death,
this Trust Agreement, and all trusts established under this Trust Agrecment, shall become
irrevocable and not subject to amendment.
2.5 Right to Appoint and Remove Trustees. | reserve the right to appoint,
designate, and remove trustees. :
2.6 N/A
2.7 Exercise of My Reserved Rights by Others. The rights reserved to me
as described above are personal to me and shall not be exercisable on my behalf by any
other person,
2.8 Manner of Exercise of My Reserved Rights. I may exercise the Tights
reserved to me only by a signed writing delivered to the Trustee, This Trust Agreement
may not, however, be revoked or amended by me in my Will.
ARTICLE 3
THE TRUSTOR'S TRUST
The following provisions shall apply to the distribution of the trust estate during
ty lifetime. ;
3.1 Distributions of Income and Principal. During my lifetime, the Trustee
shall distribute to me that amount of net income and principal as { direct, Also, the
Trustee is authorized to distribute to me that amount of net income and principal, up to
the whole of the trust estate, as the Trustce deems appropriate in the exercise of his or her
discretion, using my accustomed manner of living as a guide and without regard to my
other sources of support. ‘The Trustee shall exercise this discretion in a liberal manner,
and the rights of remainder beneficiaries shall be of no importance, The Trustee shal]
accumulate and add any undistributed net income to principal.
3.2 Qualification for Government Benefits. | authorize the Trustee to take
any actions that the Trustec determines to be appropriate or necessary in connection with
my qualification for or receipt of government benefits, including benefits (whether
income, medical, disability, or otherwise) from any agency (whether state, federal, or
otherwise), such as Social Security, MediCal, Medicare, or supplemental security
income/state supplemental programs.
ARTICLE 4
ALLOCATION AND DISPOSITION OF THE TRUST ESTATE
Upon my death, subject to the payment of, or satisfactory provision being made
for, all debts and taxes (including Estate taxes), the following allocations and dispositions
of the trust estate shall be made by the Trustee,
ALOHA L. ALES 2000 TausT4.1 Disposition Upon My Death. Upon my death, the Trustee shall allocate
the trust estate, including the property held in the trust estate at the date of my death and
the property transferred to the trust estate by reason of my death, as follows:
(a) Gifts of Tangible Personal Property. The Trustce shall make
distributions of my tangible personal property as provided in ARTICLE 5.
(b) = Balance of the Trust Estate. The balance of the trust estate shall
be allocated as follows:
4.2 Disposition of Otherwise Undisposed of Property. [f the disposition of
all or any portion of the trust estate is not otherwise directed under the provisions of this
Trust Agreement, or if all the beneficiaries otherwise described in this Trust Agreement
die before the complete distribution of the trust estate, the Trustee shall distribute the
remaining trust estate as follows: one hundred percent (100%) to Visiting Nurses
Program Hospice By the Bay (‘Visiting Nurses”) located at 1540 Market Street, San
Francisco, CA 94102, for its general purposes. This gift shall not be made unless, at the
time of my death, Visiting Nurses is qualified as a charitable organization to which gifts
are deductible for estate tax purposes under 1.R.C. §2055. If Visiting Nurses is not so
qualified, this gift shal! be distributed to and among such qualified charitable
organizations, as the Trustee selects, whose charitable activities are substantially similar
to the charitable activities engaged in by Visiting Nurses.
4.3 Rules Governing the Allocation of Trust Property. The Trustee shall
select a date or dates of allocation or distribution for purposes of satisfying gifts and
funding shares. In allocating property to satisfy gifts and fund shares, the Trustee is
authorized to allocate property in appropriate undivided interests. Each gift or share may
be satisfied or funded in cash or in kind, or partly in each. Assets allocated in kind shall
be deemed to satisfy gifts or fund shares, including all of the marital deduction gift or
share, on the basis.of their fair market values at the date or dates of allocation or
distribution,
No property for which a marital deduction would not be allowed if the property
were distributed outright to my husband shall be allocated to a marital deduction gift.
The Trustee may satisfy the marital deduction gifts only with property that qualifies for
the marital deduction. No property. or interests with respect to which the federal cstate
tax foreign death tax credit is otherwise available shall be allocated to a marital deduction
gift unless no other property or interests are available to complete the funding of the
marital deduction gifts.
ARTICLE S$
GIFTS OF TANGIBLE PERSONAL PROPERTY
Upon my death, subject to the payment of, or satisfactory provision being made
for, all my debts and taxes (including all Estate taxes), the following distributions shall be
made by the Trustee from the trust estate.
ALowa L. Ales 2000 TRUSTTwenty five percent (25%) of my entire estate shall be distributed outright to
Michael Howe, If Michael Howe predeceases me, then this disposition shall be made in
equal shares to Katic Stanley and David Sutton. In the event that either Katie Stanley or
David Sutton predeccase me, then the entire disbursement shall be made to the survivor.
In the ever that Michael Howe, Katie Stanley and David Sutton predecease me, then this
disbursement shall become part of the residue of my estate and be distributed as set forth
below.
Ten percent (10%) of my entire estate shall be distributed outright to Sandy
Babcock-Goates. If she predeceases me, this portion of my estate shall be distributed to
Les Goates,
The remainder of my estate shali be distributed as follows: commencing with the
date of my death, distributions shal! be made at least quarterly such that my entire estate
will be distributed over the succeeding ten (10) year period to the following individuals
equally: Barbara Hunt, Helga Prangl, Deborah Jorgensen, George Smith, Sharon
Williams and Judy Bush, In the event that Barbara Hunt predeceases me, her share shall
be distributed to Sandy Cabrea, In the event that both Barbara Hunt and Sandy Cabrea
predecease me, said share(s) shall be distributed equally among Helga Prangl, Deborah
Jorgensen, George Smith, Sheron Williams and Judy Bush, as set forth herein. In the
event that George Smith predeceases me, his share shai! be distributed to. Haley Marie
Smith. If George Smith and Haley Marie Smith predecease mo, said share shall be
distributed to the children of Haley Marie Smith. In the event that any of the above
individuals predeceases me and/or Haley Marie Smith has no children that survive my
death, the remainder of my estate shall be distributed equally to those individuals named
above who survive me.
All my interest in my tangible personal property, not effectively disposed of
above, together with any insurance on such property, shall be distributed by the Trustee
outright as set forth above, In the event that none of the individuals set forth above
survive my death, the Trustee shall distribute my estate outright to the Hospice of San
Francisco.
ARTICLE 6
DISCLACMERS
6.1 Disclaimers Allowed. In addition to any rights granted by law, any person
granted any right, title, interest, benefit, privilege, or power under this Trust Agreement,
including my husband, may at any time renounce, release, or disclaim all or any part of
that right, title, interest, benefit, privilege, or power, including his or her right, title, and
interest in and to trust income or principa). The natural or legal guardians of a minor
shall have the authority and power to disclaim the interests of the minor, the conservator
of the estate of the person shal] have the authority and power to disclaim the interests of
the conservatee; the fiduciary of a trust or estate shall have the authority and power to
disclaim the interests of the trust or estate; and the youngest adult ancestor of any unborn,
ALOHA L. AILES 2000 TRUSTunknown, or unascertained issue shall have the power to disclaim the interests of those
issue.
6.2 Disclaimers by My Husbsod. My husband shall have the power to
disclaim all or any portion of or interest in my property allocable to or otherwise passing
to my husband. Notwithstanding any other provision of this Trust Agreement, if my
husband effectively disclaims sll or any portion of his interest in the property in or
passing to him, the portion of the property or interests so disclaimed shall immediately
pass as provided in ARTICLE 4.
6.3 Effective Disclaimers. To be effective, disclaimers must be in writing,
signed by the disclaiming person, and irrevocable. Disclaimers shall be effective only
upon delivery to the Trustee or to a court having jurisdiction over the administration of
the trust.
ARTICLE 7
PAYMENT OF ESTATE TAXES
Except as otherwise cxpresaly provided in my Wil} and this Trust Agreement, any
and all Estate taxcs imposed on or payable with respect to property included in my gross
taxable estate, including property in my probate estate or held as part of the trust estate,
shall be apportioned, charged, and paid as set forth below. For these purposes, the trust
estate shall include property subject to probate administration passing from my probate
estate to the trust estate by reason of my death.
7.1 General Rule: Estate Taxes Shall Be Prorated. Except as otherwise
expressly provided, Estate taxes imposed on property includible in my gross taxable
estate shall be equitably prorated and apportioned among, charged to, and paid by the
persons who receive the property subject to the Estate taxes, as provided in Probate Code
§§20100 through 20225 and the applicable provisions of the LR.C. In accordance with
Probate Code §20100(c), the proration shall be based on the federal estate tax value of the
Property.
7.2 Collection of Estate Taxes. As to property included in my gross taxable
estate, but not in my probete estate or in the possession or control of the Trustec, the
Trustee is authorized to collect and recover the amount of Estate taxes owed by reason of
this property from the persons possessing or recciving the property, which persons shall
be charged with and sball pay the Estate taxes as provided in this article, The Trustee and
the Executors may petition the probate court for an order prorating Estate taxes pursuant
to Probate Code §20120.
7.3 Abatement, Notwithstanding the other provisions of this article, if all
other assets are insufficient to pay the Estate taxes, then the Estate taxes shall be
apportioned among, charged against, and paid from the property otherwise passing free
from Estate taxes in accordance with Probate Code §§20100 through 20225 and
applicable federal estate tax laws.
ALOWA L. ALES 2300 Trust ‘T4 Reserves. The Trustee may establish reserves from trust income and
principal that he or she considers necessary for the payment of Estate taxes.
75 Tax Elections. The Trustee shall have the power, in his or her discretion,
to take any action and to make any election to minimize the tax liabilities of my probate
estate, any trust, and the beneficiaries. The Trustee may make those elections and
allocations under the tax laws as he or she deems advisable. The Trustee may, but shal!
not be required to, allocate the benefits of an election among the various beneficiaries or
make adjustments in the rights of any beneficiaries or between the income and principal
accounts to compensate for the consequences of any tax election or any investment or
administrative decision made by the Trustee that may have had the effect of directly or
indirectly preferring one beneficiary or group of beneficiaries over another.
ARTICLE 8
APPOINTMENT OF TRUSTEES
The following provisions shall apply to the appointment, designation, and removal
of the Trustee.
82 Initial Trustee. Pursuant to my powers to appoint Trustees, I appoint
myself as the initial Trustee under this Trust Agreement.
8.2 Successor Trustees. Upon my death, resignation or incapacity, | appoint
Fidelity Management Trust Company of Califomia to serve as Trustce, References to
Fidolity Manegement Trust Company of California shall include its successor by merger,
conversion, or consolidation.
ARTICLE 9
PROTECTION PROVIDED THE TRUSTEES
The following provisions shall apply to each of the Trustees serving under this
Trust Agreement.
9.1 Resignation. Each Trustee shall have the right to resign his or her
position at any time. A Trustee may resign for any reason by delivering a written
resignation signed by him or ber to the other currently serving Trustees or the successor
Trustees. The resignation shall be effective according to its terms. But, if the resigning
Trustee is the sole Trustee, the resigning Trustee shall continue to be responsible for the
trust property until it is delivered to the successor Trustee and shall continue to hold title
and custody to the trust assets and administer the trust assets and perform the actions that
are reasonably necessary to preserve the trust property and to complete the Trustee's
administration of the trust, until a successor Trustee has been appointed and has accepted _
the position of Trustee. In the event that the last appointed Trustee resigns, a Successor
Trustee shal] be appointed by a court of competent jurisdiction.
ALOHA L, AILES 20090 TRUST9.2 Compensation. The Trustee shall be entitled to pay himself or herself a
teazonable compensation for the performance of his or her duties and services rendered as
Trustee and shall area ea oe geisonable expenses actully and properly incumed by
him or her in the administration of the trust.
The Trustee also is authorized to pay to the attorneys and accountants retained by
the Trustee to advise him or her in the administration of the trust those amounts for fees
and costs as the Trustee shall determine in his or her discretion. The Trustee is
authorized to pay these fees and costs without first obtaining approval of the trust
beneficiaries or the court having jurisdiction over the trust.
Fidelity Management Trust Company of California, serving as Trustee, shall be
entitled to pay itself compensation for its services as Trustee in accordance with its
schedule of rates, published from time to time and in effect at the time the services are
rendered, including minimum fees and additional compensation for special investments,
closely-held business interests, and certain other services. This compensation may be
paid without prior court approval,
A Trustee serving as a director, officer, partner, or employee of any business in
which the trust owns an interest shall also be entitled to receive compensation for his or
her services rendered as Trustee.
9.3 Right of Indemnification and Reimbursement. A Trustee shall be
entitled to indemnification and reimbursement for any expense, loss, damage, liability,
costs, or claim (inchiding, without limitation, attorney's fees and costs of litigation)
incurred by the Trustee by reason of any act performed or omitted to be performed by the
Trustee, acting in good faith, in the administration of the trust. The Trustee shall be
deemed to have acted in good faith on behalf of the trust if the Trustee acted in a manner
reasonably believed by the Trustee to be within the scope of bis or her authority and in the
best interest of the trust and its beneficiaries. Notwithstanding the foregoing, a Trustee
shall not be indemuified or reimbursed with respect to any expense, loss, damage, or
claim incurred by reason of any breaches of trust, by acts or omissions, committed
intentionally, with gross negligence, in bad faith, or with reckless indifference to the
interests of the beneficiaries,
9.4 Notice to the Trustee. Until the Trustee receives written notice of any
birth, marriage, death, or other event affecting the rights of beneficiaries to payments or
distributions from the trust, the Trustee shall incur no liability to any persons whose
interests may have been affected by that event for payments or distributions made by the
Trustee in good faith as though the event had not occurred.
9.5 Disclosure to the Beneficiaries. During my lifetime, the Trustec shall
haye no duty to provide any information regarding the trust to anyone other than me.
ALOHA L. Altes 2000 Trust9.6 Reports and Accounts. The Trustee shall account at least ancually, at the
termination of the trust, and upon a change of Trustee, to each beneficiary to whom
income or principal is required or authorized in the Trustee's discretion to be currently
distributed,
9.7 Extent of Liability. [ do not want the Trustee to be personally liable for
his or her good faith offorts in administering the trust estate.
(a) In general. A Trustee shall not be personally liable to the trust or
its beneficiaries, and shall be held harmless, for any loss, expense, damage, or claim.
incurred by the Trustee by reason of any act performed or omitted to be performed by ths
Trustee, acting in good faith, in the administration of the trust. The Trustee shall be
deemed to have acted in good faith on behalf of the trust if the Trustee acted in 8 manner
reasonably believed by the Trustee to-be within the scope of bis or her authority and in the
best interest of the trust and its beneficiaries. Further, a Trustes shail not be
liable for obligations arising from the Trustec’s ownership or control of trust property or
for torts committed in the course of the Trustee's administration of the trust unless the
Trustee is personally at fault, Notwithstanding the foregoing, a Trustee shall be
personally liable for his or her breach of trust by acts or omissions, committed
intentionally, with gross negligence, in bad faith, or with reckless indifference to the
interests of the beneficiaries, and as to any profit that the Trustee derives from any breach
of trast.
(b) = While trust is revocable. During my lifetime, the Trustee shall
follow all written directions given from time to the to him or her by me or by the person
or persons to whom I delegate the right to direct the Trustes. In consenting to and
carrying out those directions, the Trustee shall not be liable to any person having a vested
or contingent interest in the trust for any act pexformed or omitted pursuant to those
» directions. Moreover, the Trustee may follow those directions regardless of any fiduciary
obligations to which the directing party may also be subject. These provisions shall be
construed consistently with Probate Code §§16001 and 16462.
ARTICLE 10
THE AUTHORITY OF THE TRUSTEES
The following provisions shall epply to each of the Trustees scrving under this
Trust Agreement.
10.1 Trustee Authority, Except.as otherwise expressly provided, a successor
Trustee upon commencing to serve as Trustee shall immediately become vested with all
the rights, titles, powers (including discretionary powers), and obligations, with like effect
as if named as an initial Trustee. Where this Trust Agreement states that the Trustee
"shall" perform an act, the Trustee is required to perform that act, Where this Trust
Agreement states that the Trustee "may" do an act or Trustee is "authorized" to act, the
Trustee is expressly permitted of authorized to do the act described, and his or her
ALOWA L. AILZS 2000 TaUSTdecision to do or not to do the act shal) be made in the Trustee's sole and absolute
discretion in the exercise of his or her fiduciary powers and duties.
10.2 Trustee Discretion. The discretionary powers granted to the Trustee
under this Trust Agreement shall be absolute, This means that the Trustee can act
arbitrarily, so lang as he or she does not act in bad faith, and that no requirement of
reasonableness shall apply to the exercise of his or her absolute discretion. This does not
mean that the Trustee may do as he or she pleases, but rather that [ want the Trustee to
use his or her own personal, subjective best judgment. Fo
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Nov-24-2010 12:39 pm Case Number: PTR-10-293933 Filing Date: Nov-24-2010 12:36 Juke Box: 001 Image: 03042836 GENERIC PROBATE PLEADING IN THE MATTER OF THE ALOHA AILES 2000 TRUST DATED JUNE 8, 2000 TF 001P03042836 Instructions: Please piace this sheet on top of the document to be scanned;a VIRGINIA PALMER #98186 FITZGERALD ABBOTT & BEARDSLEY LLP 1221 Broadway, 21° Floor F I L E D Oakland, California 94612 San Franciaco County Superior Court Telephone: (510) 451-3300 Facsimile: (510) 451-1527 NOV 24 2010 Email: vpalmer@fablaw.com Attomeys for Fidelity Personal Trust Company, FSB, GLE ee T ve COURT Petitioner BY: nha SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO In re Case No.: PTR-10-293933 The Aloha L. Ailes 2000 Trust dated June 8, AMENDED PETITION FOR 2000 INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES (Probate Code § 17200(b)(1)(4), and (13)(6) Hearing Date: Time: 9:00 a.m. Dept.: Probate Room: 204 Petitioner, Fidelity Personal Trust Company, FSB (“Fidelity”), brings this Petition for Interpretation and Instructions Regarding Trust Provisions, to Approve Termination of Trust. and to Ascertain Beneficiaries (the “Petition”). I. INTRODUCTION Petitioner alleges: 1. Petitioner is the successor Trustee (“Trustee”) of the Aloha L. Ailes 2000 Trust dated June 8, 2000 (the “Trust”), of which Aloha L. Ailes (the “Decedent” or “Aloha”) was the Settlor and Trustee. A complete copy of the Trust is attached hereto and incorporated herein as 1. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) 4386473.210 1 ~ So Exhibit A. A copy of the Trustee’s acceptance of Trust is attached hereto and incorporated herein as Exhibit B. 2. Fidelity Personal Trust Company, FSB, does business at 8 Montgomery Street, San Francisco, California, and the venue for the administration of the Trust is San Francisco County. 3. Aloha L. Ailes died on October 26, 2009. 4, Pursuant to Probate Code § 17200(a), the Trustee may petition the Court regarding the internal affairs of the Trust. This Petition concerns the internal affairs of the Trust. Specifically, the Trustee seeks instructions regarding (a) the construction and interpretation of Trust provisions, (b) the termination of the trust, and (c) ascertaining a beneficiary of the Trust. 5. As set forth in detail below, the Trust contains conflicting dispositive provisions. Consequently, the Trustee requests the Court's interpretation and instructions regarding the distribution of the Trust’s assets. Without the Court's assistance, the administration of the Trust and the distribution of the Trust’s assets cannot occur. I. CONSTRUCTION OF TRUST 1, Relevant Terms Of The Trust The dispositive provisions of the Trust regarding the distribution of the Trust estate are set forth in Paragraphs 4.1, 4.2, and Article 5 of the Trust. These provisions contain conflicting dispositive language. Set forth below in their entirety are Paragraphs 4.1, 4.2, and Article 5 of the Trust. “4.1 Disposition Upon My Death. Upon my death, the Trustee shall allocate the trust estate, including the property held in the trust estate at the date of my death and the property transferred to the trust estate by reason of my death, as follows: “(a) Gifts of Tangible Personal Property. The Trustee shal] make distributions of my tangible personal property as provided in ARTICLE 5, “(b) Balance of the Trust Estate. The balance of the trust estate shall be allocated as follows: 2. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2Coe NM KD NH ti () “4.2 Disposition of Otherwise Undisposed of Property. If the disposition of all or any portion of the trust estate is not otherwise directed under the provisions of this Trust Agreement, or if all the beneficiaries otherwise described in this Trust Agreement die before the complete distribution of the trust estate, the Trustee shall distribute the remaining trust estate as follows: one hundred percent (100%) to Visiting Nurses Program Hospice By The Bay (“Visiting Nurses”) located at 1540 Market Street, San Francisco, CA 94102, for its general purposes. This gift shall not be made unless, at the time of my death, Visiting Nurses is qualified as a charitable organization to which gifts are deductible for estate tax purposes under I.R.C. § 2055. If Visiting Nurses is not so qualified, this gift shall be distributed to and among such qualified charitable organizations, as the Trustee selects, whose charitable activities are substantially similar to the charitable activities engaged in by Visiting Nurses. “ARTICLE 5 GIFTS OF TANGIBLE PERSONAL PROPERTY” “Upon my death, subject to the payment of, or satisfactory provision being made for, all my debts and taxes (including all Estate taxes), the following distributions shall be made by the Trustee from the trust estate. “Twenty five percent (25%) of my entire estate shall be distributed outright to Michael Howe. If Michael Howe predeceases me, then this disposition shall be made in equal shares to Katie Stanley and David Sutton. In the event that either Katie Stanley or David Sutton predeceases me, then the entire disbursement shall be made to the survivor. In the event that Michael Howe, Katie Stanley and David Sutton predecease me, then this disbursement shall become part of the residue of my estate and be distributed as set forth below. “Ten percent (10%) of my entire estate shall be distributed outright to Sandy Babcock-Goates. If she predeceases me, this portion of my estate shall be distributed to Les Goates. “The remainder of my estate shall be distributed as follows: commencing with the date of my death, distributions shall be made at least quarterly such that my entire estate will be distributed over the succeeding ten (10) year period to the following individuals equally: Barbara Hunt, Helga Prangl, Deborah Jorgensen, George Smith, Sharon Williams and Judy Bush. In the event that Barbara Hunt predeceases me, her share shall be distributed to Sandy Cabrea. In the event that both Barbara Hunt and Sandy Cabrea predecease me, said share(s) shall be distributed equally among Helga Prangl, Deborah Jorgensen, George Smith, Sharon Williams and Judy Bush, as set forth herein. In the event that George Smith predeceases me, his share shal] be distributed to Haley Maric Smith. If George Smith and Haley Marie Smith predecease me, said share shall be distributed to the children of Haley Marie Smith. In the event that any of the above individuals predecease me and/or Haley Marie Smith has no children that survive my death, the remainder of my estate shall be distributed equally to those individuals named above who survive me. “All my interest in my tangible personal property, not effectively disposed of above, together with any insurance on such property, shall be distributed by the Trustee outright as set forth above. In the event that none of the individuals set 3. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.213 14 forth above survive my death, the Trustee shall distribute my estate outright to the Hospice of San Francisco.” 2. Conflicting Trust Provisions a. Paragraph 4.1(a) of the Trust requires the Trustee to make gifts of the Settlor’s “tangible personal property” as set forth in Article 5. However, while the caption to Article 5 refers to tangible personal property, the main dispositive provisions of Article 5 do not. Instead, the primary dispositive provisions of Article 5 repeatedly refer to the distribution of Settlor’s “entire estate.” Specifically, Article 5 can be summarized to provide a direction to the Trustee to distribute as follows: twenty-five percent (25%) of Settlor’s “entire estate” to “Michael Howe (or if he predeceases the Settlor, then said twenty-five percent (25%) should be distributed to Katie Stanley and David Sutton in equal shares)'; ten percent (10%) of Settlor’s “entire estate” to Sandy Babcock-Goates; and “the remainder of [Settlor’s] estate” is to be distributed quarterly, over a 10-year period, to Barbara Hunt, Helga Prangl, Deborah Jorgensen,’ George Smith, Sharon Williams, and Judy Bush*. Article 5 concludes by providing that “all my interest in my tangible personal property, not effectively disposed of above, together with any insurance on such property, shall be distributed by the Trustee outright as set forth above." b. Not only is it unclear whether the Settlor intended to distribute only her “tangible personal property” or her “entire estate” under Article 5, but there is also a conflict regarding what the Settlor meant when using the phrase “tangible personal property.” Attached hereto as Exhibit C is a letter from Jeffrey M. Weiss (“Weiss”), Aloha’s estate planning attorney, which states that Aloha intended Paragraph 4.1(a)’s reference to “tangible personal property” to include “any and all assets owned by Aloha other than real estate.” See Exhibit C. ' Michael Howe predeceased the Settlor. Therefore, his twenty-five percent share shail be distributed to Katie Stanley and David Sutton in equal shares. > Deborah Jorgensen predeceased the Settlor. Therefore, Deborah Jorgensen’s share lapses. 3 Judy Bush predeceased the Settlor. Therefore, Judy Bush’s share lapses. 4. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST. PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) 4386473.2f { o) However, Aloha’s intention, as recalled by Weiss, conflicts with the definition of “tangible personal property” set forth in Paragraph 14.24(b) of the Trust, which provides as follows: “The term ‘tangible personal property’ includes clothing, jewelry, and other personal effects; household furniture, furnishings, equipment, and appliances (including rugs, linen, and other household decorations); china, silverware, glassware, crystal, and other household items of use and decoration; books, pictures, works of art (including paintings, sculptures, and works on paper), antiques, stamp and coin collections, wine, and other collectibles; automobiles, boats, other vehicles, and accessories to vehicles; and other items of domestic, houschold, or personal use. ‘Tangible personal property’ shal! not include ordinary currency, cash, or bullion or property primarily held for investment purposes, such as investment funds, or any property held for use in a trade or business.” c. The Trustee had the tangible personal property, as defined in Paragraph 14.24(b) appraised by licensed appraisers at Clars Auction Gallery. The total value of the jewelry in the Trust was appraised at $3945.00. The appraisers determined that the furniture and furnishings were not of sufficient value to appraise. Therefore, the overall value of the tangible personal property of the Trust is less than $4,000. The remaining estate is worth approximately $750,000. d. Given the direction in Paragraph 4.1(a) regarding distribution of Settlor’s “tangible personal property” under Article 5, the conflicting multiple references in Article 5 to Settlor’s “entire estate,” the conflict regarding the definition of “tangible personal property” in Paragraph 14.24(b) of the Trust, and in light of the interpretation of the Trust’s language supplied by Weiss, the Trustee requests that the Court interpret and instruct the Trustee regarding the following: @ Should the phrase “tangible personal property” be defined as set forth in Paragraph 14,24(b) of the Trust or as defined by Weiss to include “any and all assets owned by Aloha other than real estate.” Gi) _Is the gift to Katie Stanley and David Sutton in equal shares (as a result of Michael Howe predeceasing the Settlor) a gift of twenty-five percent (25%) of the Settlor’s “tangible personal property” or twenty-five percent (25%) of Settlor’s “entire estate”? 5. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2Co wm ND (iii) Is the gift to Sandy Babcock-Goates a gift of ten percent (10%) of the Settlor’s “tangible personal property” or ten percent (10%) of the Settlor’s “entire estate”? (iv) _ Is the gift of the “remainder” under Article 5, to Barbara Hunt, Helga Prangl, George Smith and Sharon Williams a gift of the remaining sixty-five percent (65%) of Settlor’s “tangible personal property” or a gift of the remaining balance of Settlor’s “entire estate”? (v) If the gift described in item d. above is a gift of only the Settlor’s remaining “tangible personal property”, then does all the rest, residue and remainder of Settlor’s estate pass to Visiting Nurses Program Hospice By The Bay under Paragraph 4.2 of the Trust? e. Michael Howe, who is named to receive "twenty five percent (25%) of my entire estate", was the decedent's husband. As he died before Aloha, the Trust states that his share is to be divided equally between Katie Stanley and David Sutton, who were Michael Howe's children and, therefore, her stepchildren. Sandy Babcock-Goates and the other beneficiaries were all long-time friends of Aloha's. f. There are two possible interpretations of the Trust. In these interpretations, the term "tangible personal property" refers to property as defined in Paragraph 14,24(b). Interpretation I 25% of the Tangible personal property in equal shares to Katy Stanley and seo. [This distribution would have an approximate value of 10% of the Tangible personal property to Sandy Babcock-Goates. [This distribution would have an approximate value of $400.] 65% of the Remainder tangible personal property to be held in trust for ten years with quarterly distributions to five beneficiaries. [This distribution would have an approximate value of $2,600.] If a beneficiary of the remainder of tangible personal property dies before the ten-year period elapses, his or her share is distributed to Hospice of San Francisco 6. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2Uw FR Bw oN Mw The remainder of the estate is distributed to “Visiting Nurses Program Hospice By The Bay.” Approximately $750,000 Interpretation II 25% of the Entire estate in equal shares to Katy Stanley and David Sutton. [Approximately $187,000 and 25 % of the tangible personal property| 10% of the Entire estate to Sandy Babcock-Goates [Approximately $75,000 and 10% of the tangible personal property.] 65% of the Remainder of the entire estate distributed among the remaindermen. [Approximately $487,500 plus 65% of the tangible personal property distributed quarterly over 10 years.] The remaining balance of any sub-trust created above for the four remaining beneficiaries, who die before full distribution in 10 years Bousbe distributed to “Visiting Nurses Program Hospice By The 3. Possible Solution: On May 27, 2010, the Trustee, through its counsel, wrote to all the beneficiaries addressing these issues. A copy of that letter without attachments is attached as Exhibit E and incorporated by reference. All eight of the remaining beneficiaries approved the proposed solution, which is described below. 4. The proposed resolution is: a All the tangible personal property not requested by a beneficiary be sold and added to the estate; b. The entire estate be distributed as follows: 25% to Katie Stanley and David Sutton in equal shares 10% to Sandy Babcock-Goates 65% to Barbara Hunt, Helga Prangl, George Smith, Sharon Williams and Hospice By The Bay in equal shares 5. Only one beneficiary wants any of the tangible personal property, which shall be provided to this beneficiary. 4 See Paragraph [1] Identity of Beneficiary below. 5 See Paragraph IIT Identity of Beneficiary below. 7. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2TI. IDENTITY OF BENEFICIARY 1. Paragraph 4.2 of the Trust provides that in the event disposition of all or any portion of the Trust estate is not directed elsewhere in the Trust, then the Trustee shall distribute the remaining Trust estate to “Visiting Nurses Program Hospice By The Bay ("Hospice By The Bay") located at 1540 Market Street, San Francisco, CA 94102, for its general purposes.” The only hospice organization that Petitioner could find located at 1540 Market Street, San Francisco, CA, is “Hospice By The Bay”, which has subsequently relocated to 1902 Van Ness Avenue, 2p loor, San Francisco, CA 94109. 2. Petitioner has been informed that there is no program formally referred to as the “Visiting Nurses Program" at Hospice By The Bay. Instead, all of the nurses at Hospice By The Bay are visiting nurses, as it has no inpatient hospice facility of its own. See Declaration of Sharon Lew, Chief Executive Officer, Hospice By The Bay, which is attached as Exhibit D and incorporated by reference. By conducting internet searches, staff of Petitioner's counsel located "Sutter Visiting Nurses and Hospice of San Francisco," which exists as part of Sutter Health. Upon inquiry, counsel was informed that Sutter Visiting Nurses and Hospice of San Francisco has never been located at 1540 Market Street, San Francisco, and that its prior address was #1 South Van Ness, San Francisco, California. 3. Pursuant to Probate Code Section 17200(b)(4), Petitioner requests that the Court ascertain the intended beneficiary under Paragraph 4.2 of the Trust. Petitioner is informed and believes that Hospice By The Bay, which was previously located at 1540 Market Street, San Francisco, CA, was the intended beneficiary under Paragraph 4.2 of the Trust. IV. TERMINATION OF TRUST 1. Article 5 provides for the distribution of Sixty-five percent (65%) of the “remainder” of the estate on a quarterly basis, over a ten (10) year period, to Barbara Hunt, Helga Prangl, Deborah Jorgensen, George Smith, Sharon Williams and Judy Bush. The Petitioner is informed and believes that both Judy Bush and Deborah Jorgensen predeceased the Scttlor and that under the terms of the Trust, their shares will be divided among the four 8. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2remaining beneficiaries. The Trust estate is currently valued at approximately $750,000. Sixty-five percent would be approximately $487,500 before expenses of administration. Depending on the interpretation of the Trust, each sub-trust share could be approximately $97,500 to $120,000. Petitioner is informed and believes that the cost to administer trusts of this size, over a 10-year period, would significantly reduce the benefits to the beneficiaries of the Trust, and needlessly diminish the trust estate. 2. Paragraph 11.5 of the Trust provides in relevant part that, “atter my death, the Trustee may for any reason terminate any trust created under this Trust Agreement and distribute any remaining trust estate, including principal and undistributed income, to any one or more of the current beneficiaries or the presumptive remainder beneficiaries of the trust in those proportions as the Trustee determines, in a manner that conforms as nearly as possible to my intention. In exercising his or her discretion to terminate a trust, the Trustee may, but shall have no obtigation to, consider the interests of any person other than the current income beneficiary, including any remainder beneficiaries. “If the Trustee determines that the size of a trust does not warrant the cost of continuing that trust or that continued administration of any trust would be impractical for any reason, the Trustee, without further responsibility or liability. may transfer that trust property outright to the person or persons then authorized or entitled to the income from it.” 3. Accordingly, Petitioner, after resolution of the issues in this Petition, seeks to terminate the trust created under Article 5 of the Trust, under the power granted to it under Paragraph 11.5 of the Trust and distribute the “remainder” of the Trust estate outright and free of trust to Barbara Hunt, Helga Prangl, George Smith and Sharon Williams. Pursuant to Probate Code Section 17200(b)(13), Petitioner seeks this Court’s approval of such trust termination. Vv. CONCLUSION Probate Code Section 17200(a) authorizes a trustee to petition the court for instructions concerning the internal affairs of the Trust. Pursuant to Probate Code Section 17200(b)(1), the Trustee requests that the Court interpret the dispositive provisions of the Trust and instruct the Trustee regarding the distribution of Trust assets. The Trustee also requests that the Court 9. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2wn approve the Trustee’s termination of the trust created under Article 5 and ascertain the intended beneficiary under Paragraph 4.2 of the Trust. Vi. NOTICE The names and last known addresses of all persons entitled to notice of this Petition, as far as known to Petitioner, are: Michael Howe -- deceased Judy Bush — deceased Deborah Jorgensen — deceased ee wn Katie Stanley 43 Sistova Road Balham, London SW 129QR 5. David Sutton 29 Grove Kings Hill Kent ME 19 4A5 United Kingdom 6. Sandy Babcock-Goates 1157 Valencia Street, #9 San Francisco, CA 94110 7. Barbara Hunt 2101 Anderson Lane, #216 Austin, TX 78757 8. Helga Prang] 555 Pershing Drive Walnut Creek, CA 94597 9. George Smith 764 Second Avenue Chula Vista, CA 91910 10. Sharon Williams 34 - 79 44" Street #4D Long Island City, NY 11103 11. Hospice By The Bay 1902 Van Ness Avenue, 2" Floor San Francisco, California 94109 12. Attorney General’s Office State of California P.O. Box 903447 Sacramento, CA 94203-4470 10. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2WHEREFORE, Petitioner requests that the Court: 1. Interpret Paragraphs 4.1, 4.2, and Article 5 of the Trust; 2, Instruct and direct the Trustee to distribute the Trust pursuant to the Court’s interpretation of Paragraphs 4.1, 4.2, and Article 5 of the Trust; 3. Ascertain the intended beneficiary under Paragraph 4.2 of the Trust; 4. Approve the Trustee’s termination of the trust created under Article 5 and direct the Trustee to distribute any assets constituting the “remainder” of the Trust estate to Barbara Hunt, Helga Prang], George Smith, Sharon Williams, and Hospice By The Bay in equal shares, outright and free of trust; and 5. Any other and further orders that the Court considers proper. Dated: November 24, 2010 FITZGERALP ABBOTT & BEARDSLEY LLP By . Virginia Palmer Attorneys for Petitioner Ul. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) 4386473.2VERIFICATION I, Virginia Palmer, attorney for Petitioner, Fidelity Personal Trust Company FSB, declare as follows: I am the attorney representing Fidelity Personal Trust Company FSB, which is the Petitioner in the within matter. | am signing this Verification on Fidelity Personal Trust Company FSB's behalf due to the person in charge of this Trust is out of the county. I have read the foregoing AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES and know the contents thereof and that the same is true of my own knowledge, except as to those matters which are therein stated on information and belief and that as to those matters I believe it to be true. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on November 24, 2010, at Oakland, California. Lan Virginia Imer 12. AMENDED PETITION FOR INTERPRETATION AND INSTRUCTIONS REGARDING TRUST PROVISIONS, TO APPROVE TERMINATION OF TRUST, AND TO ASCERTAIN BENEFICIARIES 11/24/10 (26539) #386473.2TRUST AGREEMENT FOR THE ALORA L. AILES 2000 TRUST Prepared by Jeffrey M. Weiss, Esq. Weiss & Weissman, Inc.ARTICLE 3 ARTICLE 4 4.1 42 43 ARTICLE 5 ARTICLE 6 6.1 6.2 63 TABLE OF CONTENTS Right to Withdraw Property from the Trust Estate Right to Amend the Trust Agreement ......... denen eter eee e eens L Exervise of My Reserved Rights by Others bee Manner of Exercise of My Reserved Rights ........000.0,......0.. 2 THE TRUSTOR'S TRUST....., bebe eee een eee ees Distributions of Income and Principal . Qualification for Government Benefits .....0. 00... cee cece eee e eee 2 ALLOCATION AND DISPOSITION OF THE TRUST ESTATE ...... 2 Disposition Upon My Death Disposition of Otherwise Undisposed of Property Rules Governing the Allocation of Trust Property GIFTS OF TANGIBLE PERSONAL PROPERTY teeta tenons 3 DISCLAIMERS .... Disclaimers Allowed . Disclaimers by My Husband .........00 000 ccc cece cece ee eaee 5s Effective Disclaimers 0.6... 6.00. e Lecce ener cence 4sARTICLE7 PAYMENT OF ESTATE TAXES .......... . 71 72 73 74 78 ARTICLE 8 81 8.2 ARTICLE 9 9.1 92 9.3 9.4 9.5 9.6 3.7 ARTICLE 10 10.1 10.2 10,3 10.4 10.5 10.6 10.7 10.8 10.9 General Rule: Estate Taxes Shall Be Prorated ............0000000005 Collection of Estate Taxes «2.0.20... eee cece cue c ect eeeecs 5 Abatement .. Voting Delegation by One Trustee o Delegation by All Trustecs.........02. 00 -cc cece eee e ces sueeeeees Delegation of Power to Expend 00... cece cece tees Delegation of Investment AuthorityARTICLE 11 SPECIAL DISCRETIONARY POWERS OF THE TRUSTEE 11.1 To Make Payments and Disigibutions 11.2 To Divide Trosts 60.0.0... cece ceceee eee eee 11.3 To Consolidate Trusts 00.0.0. e ccc cece ccc cee cee ceeeee, 11.4 To Invest Trust Assets Together - 11.5 To Terminate Trusts ........... 11.6 To Postpone Distributions 11.7 To Permit Uso of Personal Residence ARTICLE 12 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12,14 12.15 12.16 12.17 ARTICLE 13 SPECIAL PROVISIONS FOR INVESTMENT COUNSEL ... : 13.1 Reliance on Discretionary Investment Counsel 2.02. cee 13.2 Authority of Investment Counsel... 2.0.2.0... eee eee ees iti13.3 13.4 13.5 ARTICLE 14 14.1 14.2 143 14.4 14.5 14.6 147 14.8 14.9 14.10 14.11 14.12 14.13 14,14 14,15 14.16 14.17 14.18 14.19 14.24 14.21 14.22 14.23 . 14.24 14.25 14.26 14.27 Compliance with Directions of Discretionary Investment Counsel . . ... 16 Reliance on Trustee DEFINITIONS 2.200... e cece been eee een eens WZ Federal Estate Tax Value Generation-Skipping Transfer Tax. .14.28 14.29 14.30 1431 14,32 ARTICLE 15TRUST AGREEMENT FOR THE ALOHA L, AILES 2000 TRUST I, Aloha L. Ailes, as Trustor and Trustee, declare that I have entered into this Trust Agreement on June 8, 2000. The Trustee agrees to administer all property added to the trust estate, in trust, under the terme of this Trust Agreement. The revocable trast initially established under this Trust Agreement shall be known as the Aloba L. Ailes 2000 Trust. Successor trusts established under this Trust Agreement shall be known by the names designated below in this Trust Agreement or ag named by the Trustee. ARTICLE 1 DECLARATIONS Tam married to Micheel Howe and all references in this Trust Agreement to "Michael " or “my husband" refer to him. 1 have no living or deceased children. ARTICLE 2 RIGHTS RESERVED BY ME As Trustor, | reserve the following rights under this Trust Agreement. 2.1 Right to Add Property to the Trust Estate. | reserve the right to transfer additional propesty to the Trustes during my lifetime and at my death. All property transferred to the Trustee shall be added to the trust estate and be administered under the terms of this Trust Agreement. The Trustes is authorized and directed to accept the additions to the trust estate. Any other person may transfer property to the Trustes to be added to the trust estate, provided the property is acceptable ta me (if living) and the Trustec. 2.2 Right to Withdraw Property from the Trust Estate. I reserve the right to withdraw at any time all or any portion of my property held in the trust estate. The property described in any notice of withdrawal shall be delivered immediately to me. Upon any withdrawal, the property shall be transferred to me as if the trust had not been created, 2.3 Right to Amend the Trust Agreement, I reserve the right to amend at any time all or any part of this Trust Agreement, without obtaining the consent of or giving notice to any beneficiary. 2.4 Right to Revoke the Trust Agreement. I reserve the right to revoke at any time all or any part of this Trust Agreement, without obtaining the consent of or giving notice to any beneficiary. If this Trust Agreement is revoked in whole or in part during my lifetime, the Trustee shall immediately deliver to me the entire trust estate or ALOHA LL, ALES 2000 Trustthe portion of the trust estate subject to revocation. Upon any such revocation, the property shall be transferred to me as if the trust had not been created, Upon my death, this Trust Agreement, and all trusts established under this Trust Agrecment, shall become irrevocable and not subject to amendment. 2.5 Right to Appoint and Remove Trustees. | reserve the right to appoint, designate, and remove trustees. : 2.6 N/A 2.7 Exercise of My Reserved Rights by Others. The rights reserved to me as described above are personal to me and shall not be exercisable on my behalf by any other person, 2.8 Manner of Exercise of My Reserved Rights. I may exercise the Tights reserved to me only by a signed writing delivered to the Trustee, This Trust Agreement may not, however, be revoked or amended by me in my Will. ARTICLE 3 THE TRUSTOR'S TRUST The following provisions shall apply to the distribution of the trust estate during ty lifetime. ; 3.1 Distributions of Income and Principal. During my lifetime, the Trustee shall distribute to me that amount of net income and principal as { direct, Also, the Trustee is authorized to distribute to me that amount of net income and principal, up to the whole of the trust estate, as the Trustce deems appropriate in the exercise of his or her discretion, using my accustomed manner of living as a guide and without regard to my other sources of support. ‘The Trustee shall exercise this discretion in a liberal manner, and the rights of remainder beneficiaries shall be of no importance, The Trustee shal] accumulate and add any undistributed net income to principal. 3.2 Qualification for Government Benefits. | authorize the Trustee to take any actions that the Trustec determines to be appropriate or necessary in connection with my qualification for or receipt of government benefits, including benefits (whether income, medical, disability, or otherwise) from any agency (whether state, federal, or otherwise), such as Social Security, MediCal, Medicare, or supplemental security income/state supplemental programs. ARTICLE 4 ALLOCATION AND DISPOSITION OF THE TRUST ESTATE Upon my death, subject to the payment of, or satisfactory provision being made for, all debts and taxes (including Estate taxes), the following allocations and dispositions of the trust estate shall be made by the Trustee, ALOHA L. ALES 2000 TausT4.1 Disposition Upon My Death. Upon my death, the Trustee shall allocate the trust estate, including the property held in the trust estate at the date of my death and the property transferred to the trust estate by reason of my death, as follows: (a) Gifts of Tangible Personal Property. The Trustce shall make distributions of my tangible personal property as provided in ARTICLE 5. (b) = Balance of the Trust Estate. The balance of the trust estate shall be allocated as follows: 4.2 Disposition of Otherwise Undisposed of Property. [f the disposition of all or any portion of the trust estate is not otherwise directed under the provisions of this Trust Agreement, or if all the beneficiaries otherwise described in this Trust Agreement die before the complete distribution of the trust estate, the Trustee shall distribute the remaining trust estate as follows: one hundred percent (100%) to Visiting Nurses Program Hospice By the Bay (‘Visiting Nurses”) located at 1540 Market Street, San Francisco, CA 94102, for its general purposes. This gift shall not be made unless, at the time of my death, Visiting Nurses is qualified as a charitable organization to which gifts are deductible for estate tax purposes under 1.R.C. §2055. If Visiting Nurses is not so qualified, this gift shal! be distributed to and among such qualified charitable organizations, as the Trustee selects, whose charitable activities are substantially similar to the charitable activities engaged in by Visiting Nurses. 4.3 Rules Governing the Allocation of Trust Property. The Trustee shall select a date or dates of allocation or distribution for purposes of satisfying gifts and funding shares. In allocating property to satisfy gifts and fund shares, the Trustee is authorized to allocate property in appropriate undivided interests. Each gift or share may be satisfied or funded in cash or in kind, or partly in each. Assets allocated in kind shall be deemed to satisfy gifts or fund shares, including all of the marital deduction gift or share, on the basis.of their fair market values at the date or dates of allocation or distribution, No property for which a marital deduction would not be allowed if the property were distributed outright to my husband shall be allocated to a marital deduction gift. The Trustee may satisfy the marital deduction gifts only with property that qualifies for the marital deduction. No property. or interests with respect to which the federal cstate tax foreign death tax credit is otherwise available shall be allocated to a marital deduction gift unless no other property or interests are available to complete the funding of the marital deduction gifts. ARTICLE S$ GIFTS OF TANGIBLE PERSONAL PROPERTY Upon my death, subject to the payment of, or satisfactory provision being made for, all my debts and taxes (including all Estate taxes), the following distributions shall be made by the Trustee from the trust estate. ALowa L. Ales 2000 TRUSTTwenty five percent (25%) of my entire estate shall be distributed outright to Michael Howe, If Michael Howe predeceases me, then this disposition shall be made in equal shares to Katic Stanley and David Sutton. In the event that either Katie Stanley or David Sutton predeccase me, then the entire disbursement shall be made to the survivor. In the ever that Michael Howe, Katie Stanley and David Sutton predecease me, then this disbursement shall become part of the residue of my estate and be distributed as set forth below. Ten percent (10%) of my entire estate shall be distributed outright to Sandy Babcock-Goates. If she predeceases me, this portion of my estate shall be distributed to Les Goates, The remainder of my estate shali be distributed as follows: commencing with the date of my death, distributions shal! be made at least quarterly such that my entire estate will be distributed over the succeeding ten (10) year period to the following individuals equally: Barbara Hunt, Helga Prangl, Deborah Jorgensen, George Smith, Sharon Williams and Judy Bush, In the event that Barbara Hunt predeceases me, her share shall be distributed to Sandy Cabrea, In the event that both Barbara Hunt and Sandy Cabrea predecease me, said share(s) shall be distributed equally among Helga Prangl, Deborah Jorgensen, George Smith, Sheron Williams and Judy Bush, as set forth herein. In the event that George Smith predeceases me, his share shai! be distributed to. Haley Marie Smith. If George Smith and Haley Marie Smith predecease mo, said share shall be distributed to the children of Haley Marie Smith. In the event that any of the above individuals predeceases me and/or Haley Marie Smith has no children that survive my death, the remainder of my estate shall be distributed equally to those individuals named above who survive me. All my interest in my tangible personal property, not effectively disposed of above, together with any insurance on such property, shall be distributed by the Trustee outright as set forth above, In the event that none of the individuals set forth above survive my death, the Trustee shall distribute my estate outright to the Hospice of San Francisco. ARTICLE 6 DISCLACMERS 6.1 Disclaimers Allowed. In addition to any rights granted by law, any person granted any right, title, interest, benefit, privilege, or power under this Trust Agreement, including my husband, may at any time renounce, release, or disclaim all or any part of that right, title, interest, benefit, privilege, or power, including his or her right, title, and interest in and to trust income or principa). The natural or legal guardians of a minor shall have the authority and power to disclaim the interests of the minor, the conservator of the estate of the person shal] have the authority and power to disclaim the interests of the conservatee; the fiduciary of a trust or estate shall have the authority and power to disclaim the interests of the trust or estate; and the youngest adult ancestor of any unborn, ALOHA L. AILES 2000 TRUSTunknown, or unascertained issue shall have the power to disclaim the interests of those issue. 6.2 Disclaimers by My Husbsod. My husband shall have the power to disclaim all or any portion of or interest in my property allocable to or otherwise passing to my husband. Notwithstanding any other provision of this Trust Agreement, if my husband effectively disclaims sll or any portion of his interest in the property in or passing to him, the portion of the property or interests so disclaimed shall immediately pass as provided in ARTICLE 4. 6.3 Effective Disclaimers. To be effective, disclaimers must be in writing, signed by the disclaiming person, and irrevocable. Disclaimers shall be effective only upon delivery to the Trustee or to a court having jurisdiction over the administration of the trust. ARTICLE 7 PAYMENT OF ESTATE TAXES Except as otherwise cxpresaly provided in my Wil} and this Trust Agreement, any and all Estate taxcs imposed on or payable with respect to property included in my gross taxable estate, including property in my probate estate or held as part of the trust estate, shall be apportioned, charged, and paid as set forth below. For these purposes, the trust estate shall include property subject to probate administration passing from my probate estate to the trust estate by reason of my death. 7.1 General Rule: Estate Taxes Shall Be Prorated. Except as otherwise expressly provided, Estate taxes imposed on property includible in my gross taxable estate shall be equitably prorated and apportioned among, charged to, and paid by the persons who receive the property subject to the Estate taxes, as provided in Probate Code §§20100 through 20225 and the applicable provisions of the LR.C. In accordance with Probate Code §20100(c), the proration shall be based on the federal estate tax value of the Property. 7.2 Collection of Estate Taxes. As to property included in my gross taxable estate, but not in my probete estate or in the possession or control of the Trustec, the Trustee is authorized to collect and recover the amount of Estate taxes owed by reason of this property from the persons possessing or recciving the property, which persons shall be charged with and sball pay the Estate taxes as provided in this article, The Trustee and the Executors may petition the probate court for an order prorating Estate taxes pursuant to Probate Code §20120. 7.3 Abatement, Notwithstanding the other provisions of this article, if all other assets are insufficient to pay the Estate taxes, then the Estate taxes shall be apportioned among, charged against, and paid from the property otherwise passing free from Estate taxes in accordance with Probate Code §§20100 through 20225 and applicable federal estate tax laws. ALOWA L. ALES 2300 Trust ‘T4 Reserves. The Trustee may establish reserves from trust income and principal that he or she considers necessary for the payment of Estate taxes. 75 Tax Elections. The Trustee shall have the power, in his or her discretion, to take any action and to make any election to minimize the tax liabilities of my probate estate, any trust, and the beneficiaries. The Trustee may make those elections and allocations under the tax laws as he or she deems advisable. The Trustee may, but shal! not be required to, allocate the benefits of an election among the various beneficiaries or make adjustments in the rights of any beneficiaries or between the income and principal accounts to compensate for the consequences of any tax election or any investment or administrative decision made by the Trustee that may have had the effect of directly or indirectly preferring one beneficiary or group of beneficiaries over another. ARTICLE 8 APPOINTMENT OF TRUSTEES The following provisions shall apply to the appointment, designation, and removal of the Trustee. 82 Initial Trustee. Pursuant to my powers to appoint Trustees, I appoint myself as the initial Trustee under this Trust Agreement. 8.2 Successor Trustees. Upon my death, resignation or incapacity, | appoint Fidelity Management Trust Company of Califomia to serve as Trustce, References to Fidolity Manegement Trust Company of California shall include its successor by merger, conversion, or consolidation. ARTICLE 9 PROTECTION PROVIDED THE TRUSTEES The following provisions shall apply to each of the Trustees serving under this Trust Agreement. 9.1 Resignation. Each Trustee shall have the right to resign his or her position at any time. A Trustee may resign for any reason by delivering a written resignation signed by him or ber to the other currently serving Trustees or the successor Trustees. The resignation shall be effective according to its terms. But, if the resigning Trustee is the sole Trustee, the resigning Trustee shall continue to be responsible for the trust property until it is delivered to the successor Trustee and shall continue to hold title and custody to the trust assets and administer the trust assets and perform the actions that are reasonably necessary to preserve the trust property and to complete the Trustee's administration of the trust, until a successor Trustee has been appointed and has accepted _ the position of Trustee. In the event that the last appointed Trustee resigns, a Successor Trustee shal] be appointed by a court of competent jurisdiction. ALOHA L, AILES 20090 TRUST9.2 Compensation. The Trustee shall be entitled to pay himself or herself a teazonable compensation for the performance of his or her duties and services rendered as Trustee and shall area ea oe geisonable expenses actully and properly incumed by him or her in the administration of the trust. The Trustee also is authorized to pay to the attorneys and accountants retained by the Trustee to advise him or her in the administration of the trust those amounts for fees and costs as the Trustee shall determine in his or her discretion. The Trustee is authorized to pay these fees and costs without first obtaining approval of the trust beneficiaries or the court having jurisdiction over the trust. Fidelity Management Trust Company of California, serving as Trustee, shall be entitled to pay itself compensation for its services as Trustee in accordance with its schedule of rates, published from time to time and in effect at the time the services are rendered, including minimum fees and additional compensation for special investments, closely-held business interests, and certain other services. This compensation may be paid without prior court approval, A Trustee serving as a director, officer, partner, or employee of any business in which the trust owns an interest shall also be entitled to receive compensation for his or her services rendered as Trustee. 9.3 Right of Indemnification and Reimbursement. A Trustee shall be entitled to indemnification and reimbursement for any expense, loss, damage, liability, costs, or claim (inchiding, without limitation, attorney's fees and costs of litigation) incurred by the Trustee by reason of any act performed or omitted to be performed by the Trustee, acting in good faith, in the administration of the trust. The Trustee shall be deemed to have acted in good faith on behalf of the trust if the Trustee acted in a manner reasonably believed by the Trustee to be within the scope of bis or her authority and in the best interest of the trust and its beneficiaries. Notwithstanding the foregoing, a Trustee shall not be indemuified or reimbursed with respect to any expense, loss, damage, or claim incurred by reason of any breaches of trust, by acts or omissions, committed intentionally, with gross negligence, in bad faith, or with reckless indifference to the interests of the beneficiaries, 9.4 Notice to the Trustee. Until the Trustee receives written notice of any birth, marriage, death, or other event affecting the rights of beneficiaries to payments or distributions from the trust, the Trustee shall incur no liability to any persons whose interests may have been affected by that event for payments or distributions made by the Trustee in good faith as though the event had not occurred. 9.5 Disclosure to the Beneficiaries. During my lifetime, the Trustec shall haye no duty to provide any information regarding the trust to anyone other than me. ALOHA L. Altes 2000 Trust9.6 Reports and Accounts. The Trustee shall account at least ancually, at the termination of the trust, and upon a change of Trustee, to each beneficiary to whom income or principal is required or authorized in the Trustee's discretion to be currently distributed, 9.7 Extent of Liability. [ do not want the Trustee to be personally liable for his or her good faith offorts in administering the trust estate. (a) In general. A Trustee shall not be personally liable to the trust or its beneficiaries, and shall be held harmless, for any loss, expense, damage, or claim. incurred by the Trustee by reason of any act performed or omitted to be performed by ths Trustee, acting in good faith, in the administration of the trust. The Trustee shall be deemed to have acted in good faith on behalf of the trust if the Trustee acted in 8 manner reasonably believed by the Trustee to-be within the scope of bis or her authority and in the best interest of the trust and its beneficiaries. Further, a Trustes shail not be liable for obligations arising from the Trustec’s ownership or control of trust property or for torts committed in the course of the Trustee's administration of the trust unless the Trustee is personally at fault, Notwithstanding the foregoing, a Trustee shall be personally liable for his or her breach of trust by acts or omissions, committed intentionally, with gross negligence, in bad faith, or with reckless indifference to the interests of the beneficiaries, and as to any profit that the Trustee derives from any breach of trast. (b) = While trust is revocable. During my lifetime, the Trustee shall follow all written directions given from time to the to him or her by me or by the person or persons to whom I delegate the right to direct the Trustes. In consenting to and carrying out those directions, the Trustee shall not be liable to any person having a vested or contingent interest in the trust for any act pexformed or omitted pursuant to those » directions. Moreover, the Trustee may follow those directions regardless of any fiduciary obligations to which the directing party may also be subject. These provisions shall be construed consistently with Probate Code §§16001 and 16462. ARTICLE 10 THE AUTHORITY OF THE TRUSTEES The following provisions shall epply to each of the Trustees scrving under this Trust Agreement. 10.1 Trustee Authority, Except.as otherwise expressly provided, a successor Trustee upon commencing to serve as Trustee shall immediately become vested with all the rights, titles, powers (including discretionary powers), and obligations, with like effect as if named as an initial Trustee. Where this Trust Agreement states that the Trustee "shall" perform an act, the Trustee is required to perform that act, Where this Trust Agreement states that the Trustee "may" do an act or Trustee is "authorized" to act, the Trustee is expressly permitted of authorized to do the act described, and his or her ALOWA L. AILZS 2000 TaUSTdecision to do or not to do the act shal) be made in the Trustee's sole and absolute discretion in the exercise of his or her fiduciary powers and duties. 10.2 Trustee Discretion. The discretionary powers granted to the Trustee under this Trust Agreement shall be absolute, This means that the Trustee can act arbitrarily, so lang as he or she does not act in bad faith, and that no requirement of reasonableness shall apply to the exercise of his or her absolute discretion. This does not mean that the Trustee may do as he or she pleases, but rather that [ want the Trustee to use his or her own personal, subjective best judgment. Fo