Preview
1 KONSTANTINE A. DEMIRIS (SBN 240089)
MICHAEL ALEXANDER SCHREIBER (SBN 271611)
2 THE DEMIRIS LAW FIRM, P.C.
700 Ygnacio Valley Road, Suite 140
3 Walnut Creek, California 94596
Tel: (925) 378-2520
4 Fax: (925) 378-2492
Email: kosta@demirislawfirm. corn
5 Email: mike@demirislawfirm. corn
6
Attorneys for Petitioner,
7 Michael Dagenbach, beneficiary
8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF PLACER
10
In the matter of: CASE NO.:
11
THE 2000 DAGENBACH FAMILY PETITIONER MICHAEL DAGENBACH'S
12 LIVING TRUST and PETITION AGAINST JEFFREY DAGENBACH,
TRUSTEE FOR INSTRUCTIONS, AND ORDERS
13 THE POWER OF ATTORNEY FOR FOR:
URSULA DAGENBACH 1) SUSPENSION AND REMOVAL OF JEFFREY
14 DAGENBACH AS TRUSTEE; FOR
DISTRIBUTIONS WITH INTEREST;
15 2) APPOINTMENT OF MICHAEL
DAGENBACH AS INTERIM SOLE TRUSTEE
16 PURSUANT TO THE TERMS OF THE TRUST;
3) COMPELLING JEFFREY DAGENBACH AS
17 TRUSTEE AND POWER OF ATTORNEY FOR
URSULA DAGENBACH TO ACCOUNT,
18 PRODUCE RECORDS, AND TURN OVER
ASSETS TO THE TRUST;
19 4) INSTRUCTIONS TO JEFFREY DAGENBACH
AS TRUSTEE AND ATTORNEY IN FACT FOR
20 URSULA DAGENBACH, NOT TO USE TRUST
FUNDS FOR HIS DEFENSE; AND
21 5) FOR SURCHARGE OF JEFFREY
DAGENBACH AND TO HOLD HIM
22 PERSONALLY LIABLE FOR BREACHES OF
TRUST, WASTE, AND LOSS
23
[Probate Code, §§850-859, 4541 et seq. 12000 et
24 seq., 15642(b)(6), 15680, 16061.7-16061.9, 16420 et
seq., 17200 et seq., 18000 et seq.]
25
Date: 02/03/2023
26 Time: 8:30am
Dept: 40
27 Judge:
28
-1-
PETITION
1 I. INTRODUCTION
2 Beneficiary, Michael Dagenbach ("Petitioner"), presents this petition against Jeffrey
3 Dagenbach, trustee for instructions, and orders for: 1) suspension and removal of Jeffrey
4
Dagenbach as trustee; 2) appointment of Michael Dagenbach as interim trustee; 3) compelling
5
Jeffrey Dagenbach as trustee and attorney in fact to Ursula Dagenbach to account, produce records,
6
and turn over trust assets; 4) instructions to Jeffrey Dagenbach as trustee and attorney in fact to
7
Ursula Dagenbach not to use trust funds for his defense 5) for surcharge of Jeffrey Dagenbach and
8
9 to hold him personally liable for breaches of fiduciary duty, breaches of trust, waste, and loss
10 ("Petition").
11 II. FACTUAL ALLEGATIONS
12
1. Kurt Dagenbach ("Kurt") and Ursula Dagenbach ("Ursula") were married prior to execution
13
of the Trust. Their marriage produced two children: Petitioner and Jeffrey Dagenbach
14 ("Respondent").
15 2. Petitioner is informed and believes that on October 12, 2000, Kurt and Ursula created the
16 2000 Dagenbach Family Living Trust ("Trust") and were the co-settlors, co-trustees, and
17 co-life beneficiaries. A true and correct copy of the Notification by trustee with copy of the
18 Trust is attached as Exhibit "A."
19 3. On same date, Ursula executed a power of attorney for finances ("POA") naming her
20 husband as agent, and Respondent as alternate agent - the power of attorney was effective
21 immediately. A true and correct copy of the POA is attached as Exhibit "B." The POA
22 allows for every financial action authorized by the uniform statutory power of attorney.
23 4. Petitioner is informed and believes that the Trust and POA were never amended nor
24 changed.
25 5. On December 30, 2018, Kurt died. Under Article Six section A. of the Trust, two subtrusts
26 were to be formed an irrevocable bypass trust and a survivor's trust. See Ex. "A" at Article
27 Six section A. and Article Nine section B. The survivor's trust has a mandatory exhaustion
28
-2-
PETITION
1 requirement prior to using bypass trust funds. See Ex. "A" at Article Seven section D.
2 subdivision (4). It is believed that the two subtrusts were never funded nor accounted for.
3 6. During Ursula's life, Petitioner believes Respondent took action as POA as Ursula was
4 incapable of handling her own finances. This is evidenced by the fact he was on a checking
5 account ending xxxx5131. See Exhibit "C." Interestingly, this account was later changed
6 to a joint account with Respondent on it. This was purportedly for bill pay even though it
7 was a trust account and even though he was a POA. See checking account ending
8 xxxx5131 attached as Exhibit "D." Respondent later attempted to pay money from this
account, post-death, to Petitioner and even to Petitioner's children, but when asked to
9
account, refused to do so and has failed to account to date even upon request to his attorney.
10
See written request to attorney Jean Shrem attached as Exhibit "E."
11
7. On August 11, 2022, Ursula died. Upon Ursula's death the Trust became irrevocable and
12
all funds were to be distributed to the bypass trust. See Ex. "A" at Article Eight section B.
13
8. Petitioner in good faith has requested information, an accounting, and records from
14
Respondent and been ignored and/or treated as if his basic English requests were
15
"confusing" even though such is required upon the death of the former trustee/change of
16
trustee under Probate Code section 16060-16062. See final written request to attorney Jean
17
Shrem on September 26, 2022 attached as Exhibit "E." As of the date of this writing, no
18
further response of any kind has been provided by Respondent's counsel.
19
9. Respondent has personally informed Petitioner that he must take items from the Trust real
20
property or they will be disposed of. Again, all of this has been done without any inventory,
21
appraisal, or accounting of the items.
22
Accordingly, Petitioner seeks the following relief.
23
24 II. LEGAL ANALYSIS
25 A. Respondent should be suspended and removed as trustee because he has violated
26 nearly every imaginable fiduciary duty, has demonstrated he is unfit to serve as
27 trustee, continues to breach the Trust, has failed to follow its terms, refuses to fund
and allocate the Trust for the benefit of the beneficiaries, refuses to communicate or
28
- 3-
PETITION
1 inform the beneficiaries of the status, failure to preserve assets, inventory or appraise
2 assets, and failed to report in violation of Probate Code Sections 15642, 16000-16013,
16060, 17200, and 17206.
3
10. All factual allegations alleged in paragraph 1-9 are re-alleged herein.
4
11. The Court should immediately suspend and remove Respondent because he has
5
demonstrated he is unfit to serve as trustee, continues to breach the Trust, has failed to fund
6 the Trust or follow its terms, refuses to allocate the Trust for the benefit of the beneficiaries,
7 refuses to communicate or inform Petitioner of the status and failed to inventory assets,
8 preserve assets or report in violation of Probate Code Sections 15642, 16000-16013, 16060,
17200, and 17206.
9
12. The court may suspend or remove a trustee who has committed a breach of trust. (Prob. C.
10
§§15642, subd. (b)(1) and (3), 16420, subd. (a)(5), 17200, subd. (b)(10).)
11
13. A trustee may be removed when the trustee is "insolvent or otherwise unfit to administer the
12
trust"; "substantially unable to manage the trust's financial resources or is otherwise
13
substantially unable to execute properly the duties of the office" (Cal. Prob Code
14 §15642(b)(2), (7)- (8).)
15 14. Substantial inability is determined under the Due Process in Competence Determination Act
16 (DPCDA) (Prob C §§810-813). See Capacity and Undue Influence: Assessing, Challenging,
17 and Defending (Cal CEB Action Guide).
18 15. Pending a petition on removal, the Court may suspend a trustee to preserve trust property
19 and may make any orders and take any other action necessary or proper to dispose of the
20 matters presented by the petition, including the appointment of a temporary trustee to
21 administer the trust in whole or in part. (Prob. C. §§ 15642, subd. (e), 17206.)
22 16. A court may suspend a trustee's powers and appoint a temporary trustee even without a
23 formal petition for removal. (Schwartz v. Labow (2008) 164 Cal.App.4th 417.)
24 17. Respondent unfortunately has done nothing to administer the Trust in nearly 4-years or to
25 probate Adrian's estate.
26 18. Respondent is non responsive, lacks impartiality, and intentionally, recklessly and willfully
27 failing to act even when requested to do so in writing.
28
-4-
PETITION
1 19. Under the Trust, there are supposed to be allocations, inventorying, reporting, accounting,
2 and distributions, however Respondent has failed to follow the Trust terms.
3 20. Furthermore, Respondent is believed to have taken action as POA and has failed to report
4 anything or account.
5 21. Respondent should be immediately suspended and removed so the bypass trust can be
6 funded/protected and assets properly allocated, distributions made and the trust properly
7 administered.
8 22. Respondent failed to administer the Trust under its terms: Respondent has failed to fund the
Trust or create subtrusts as required by its terms. (Prob. C. §15642(a).) The trustee has a
9
duty to administer the trust according to the trust instrument. (Prob. C. §16000.) The
10
guiding principle must be the intention of the settlor as expressed in the trust document.
11
(Kropp v. Sterling Say. & Loan Ass 'n (1970) 9 Cal.App.3d 1033.)
12
23 The violation by a trustee of any duty owed to the beneficiaries of the trust constitutes a
13
breach of trust. (Prob. C. §164001; City of Atascadero v. Merrill Lynch, Pierce, Fenner, &
14
Smith, Inc. (1998) 68 Cal.App.4t11 455.)
15
24. A pattern of conscious ongoing conscious breaches may justify suspension as the only
16
practical way to protect the beneficiaries from future breaches. (Cal. Trust and Probate
17
Litigation (Cont. Ed. Bar online ed. 2019) section 14.24, citing Dennis v. Rhode Island
18
Hosp. Trust Nat'l Bank (D. RI 1983) 571 F.Supp 623.)
19
25. Here, the bypass trust must be funded and any attempts to just give away money or dispose
20
of assets would be improper without an inventory and proper appraisal with allocation to the
21
bypass trust, whether from the POA account(s), joint accounts, or other accounts. It should
22
be noted that changing the title of the Trust account to a joint account is improper under the
23
terms of the Trust, which does not authorize such action anywhere.
24
26. Accordingly, suspension in the interim is essential to ensure that the Trust is protected and
25 administer in accordance with its terms pending evaluation of Respondent or an evidentiary
26 hearing and Petitioner should be awarded her mandatory attorney fees and costs by being
27 forced to bring this Petition under theories of substantial benefit to the Trust and common
fund theories.
28
-5-
PETITION
1 B. Petitioner should be appointed as interim trustee under the terms of the Trust and
2 Probate Code sections 15642(e) and 17206.
27. All factual allegations alleged in paragraph 1-26 are re-alleged herein.
3
28. The court may remove a trustee who has committed a breach of trust. (Prob. C. §§15642,
4
subd. (b)(1), 16420 subd. (a)(5), 17200, subd. (b)(10).)
5
29. Pending a petition on removal, the Court may suspend a trustee to preserve trustee property
6 and may any orders and take any other action necessary or proper to dispose of the matters
7 presented by the petition, including the appointment of a temporary trustee to administer the
8 trust in whole or in part. (Prob. Code §§ 15642 subd. (e), 17206.) A court may suspend a
trustee's powers and appoint a temporary trustee even without a formal petition for removal.
9
Schwartz, at 417.
10
30. The court may appoint a trustee. (Prob. C. §17200, subd (b)(10).)
11
31. Here, Petitioner has hired experienced legal counsel and is ready to proceed with
12 administering the Trust for the benefit of the beneficiaries and is named as the successor
13 after Respondent. See Ex. "A" at Article Eighteen.
14 32. Respondent is in ongoing and continuing breach of the Trust, and needs to be, at the very
15 least, be suspended on an interim basis so the bypass trust can be funded with the
improperly changed account funds and distributed.
16
33. Accordingly, the Court should appoint the Petitioner as sole interim trustee or alternatively
17
also appoint Petitioner as permanent trustee.
18 C. Respondent should be ordered to provide an accounting for all actions taken on behalf
19 of the Trust and Ursula Dagenbach, provide all Trust terms, requested information
20 concerning Trust terms, and transfer Trust assets to the successor trustee
21 34. All factual allegations alleged in paragraph 1-33 are re-alleged herein.
22 35. Respondent must be ordered to account for all actions taken on behalf of the Trust and
23 Ursula Dagenbach, provide all Trust terms, and transfer all assets to the interim sole trustee.
24 36. Under Probate Code §17200 subd. (b)(7)(C), beneficiaries may petition the court concerning
25 the internal affairs of the trust and ask the court to order the trustee to account if the trustee
26 has failed to account within 60 days after written request of the beneficiary and no account
27 has been made within six months preceding the request. Before 60 days lapse, under Probate
28 Code §17206, the court in its discretion may make any orders and take any other action
-6 -
PETITION
1 necessary or proper to dispose of the matters presented by the petition. All accounts to be
2 filed with the Court are governed by the provisions of Probate Code §1060 et. seq.
3 37. Under Probate Code §§16060.7, 16061.5, 16061.7, 16061.9, the trustee has a duty to
4 provide the terms of the trust and the trust instrument cannot waive the trustee's duty to
5 provide requested information. Under Probate Code sections 4541 and 4230-4234 an agent
6 under a POA has a duty to act according to the POA, not to commingle, to account, and
7 avoid conflicts of interest. An accounting is required under Probate Code section 16062
8 upon death of a trustee, change of trustee, or when the trust becomes irrevocable, as is the
case here. An accounting can be obtained by petitioning the Court under Section 17200 for
9
a trust and Section 4541 for a power of attorney.
10
38. The Petitioner has standing to request an accounting for actions taken on behalf of the Trust
11
and Ursula Dagenbach and petition the Court to compel an account because he is the son of
12
Ursula Dagenbach and a named equal remainder beneficiary of the irrevocable bypass. See
13
Probate Code sections 17200 and 4541. Also, given the failure by Respondent to respond to
14
the request for information and state whether or not he will account, waiting the 60-days is
15
futile and the Court has discretion to make appropriate orders as equity and justice require.
16
39. The Court should order Respondent turn over all assets to the sole interim trustee pending
17
the litigation.
18
40. Accordingly, the Court should order Respondent to provide a Probate Code §1060
19
compliant accounting, transfer all trust assets, and provide all trust terms under Probate
20
Code sections 4541 and 17206.
21
D. Respondent should be precluded from using Trust funds to defend himself in this
22
action
23
41. All factual allegations alleged in paragraph 1-40 are re-alleged herein.
24
42. Pursuant to Probate Code §17200 subd. (b)(6), a petitioner may seek an order instructing the
25 Respondent that he may not spend trust funds to pay his litigation fees and costs in this case.
26 The courts have consistently held that trustees and executors may not spend trust or estate
27 funds on litigation that only furthers the fiduciary's own interest.
28
-7-
PETITION
1 43. In Miller v. Campbell, et al, (2008) 162 Cal.App.4th 1331, the court held "the executor or
2 personal representative of an estate has the power, among others, to, [d]efend actions and
3 proceedings against the decedent, the personal representative, or the estate." (Prob. Code.
4 §9820.) Although this section gives the executor the power to defend actions brought
5 against the executor, it does not give the right to defend his/her personal interests at the
6 expense of the estate.
7 44. As clarified by the Law Revision Commission comments following §9820, "The authority
8 in subdivision (b) [of §9820] for a defense of actions and proceedings against the personal
representative refers to actions and proceedings against the personal representative in his or
9
her representative capacity, not those against him or her individually." Miller, Supra, at
10
1339-1340.
11
45. The same rule - that a fiduciary may not use estate or trust funds to further his/her own
12
interests - applies to trustees. In Terry v. Conlan, (2005) 131 Cal.App.4th 1445, 1461, the
13
court held that:
14
If litigation is necessary for the preservation of the trust, the trustee is entitled to
15 reimbursement for his or her expenditures from the trust; however, if the litigation is
specifically for the benefit of the trustee, the trustee must bear his or her own costs
16
incurred, and is not entitled to reimbursement from the trust. Id. at 1461.
17
46. Here, Respondent is a beneficiary of the Trust, and the Petitioners are concerned that she
18
will attempt to use Trust assets in some capacity to pay for her defense (assuming she can
19
retain and keep an attorney) to diminish the Trust estate out of spite and/or to favor her own
20
21 children, beyond what she has already done, which Petitioners believe to be free rent at the
22 Aptos Property, distributions, and other benefits that discovery will likely reveal.
23 47. Accordingly, the Court should instruct Respondent not to use any Trust funds in this
24 litigation to further his own self-interest. Respondent should be surcharged to the extent he
25 has used or will use any Trust funds for the defense of his personal interest.
26 ///
27
28
-8-
PETITION
1 E. Respondent should be ordered to provide all records for each transaction and be
personally liable and/or surcharged for any profit he obtained, matters she is unable to
2 account for or provide records for, are the result of her waste, mismanagement,
impropriety, gross negligence, reckless indifference and/or malfeasance.
3
4 48. All factual allegations alleged in paragraphs 1-47 are re-alleged herein.
5 49. A trustee has a duty to keep the beneficiaries of a trust reasonably informed of the trust and
6 its administration. (Prob. Code §16060.) In addition, the trustee must provide any
beneficiary (as defined in Prob. Code §24), on reasonable request, a report of information
7
relating to the administration of the trust relevant to the beneficiary's interest. (Prob. Code
8
§16061.)
9
50. A trustee has a duty to disclose complete information. California Law Revision
10 Commission Comments to Probate Code section 16060 refer to the Restatement (Second) of
11 Trusts §173 comment c (1957), which explains as follows concerning a trustee's duty to
12 disclose information:
The trustee is under a duty to the beneficiary to give him upon his request at reasonable times
13 complete and accurate information as to the nature and amount of the trust property, and to
permit him or a person duly authorized by him to inspect the subject matter of the trust and the
14 accounts and vouchers and other documents relating to the trust.
Comment c: Terms of the trust. Although the terms of the trust may regulate the amount of
15 information which the trustee must give and the frequency with which it must be given, the
beneficiary is always entitled to such information as is reasonably necessary to enable him to
16 enforce his rights under the trust or to prevent or redress a breach of trust.
(emphasis supplied)
17
18 51. Furthermore, under California law, a beneficiary has the right to inspect trust records.
19 (Strauss v. Superior Court (1950) 36 Ca1.2d 396 ("Strauss").) Strauss, citing 2 Scott on
20 Trusts, §173, p.922, states that a "trustee has the duty to the beneficiaries to give them upon
21 their request at reasonable times complete and accurate information relative to the
administration of the trust." This section in Scott on Trusts continues: "The beneficiaries
22
are entitled to know what the trust property is and how the trustee has dealt with it. They
23
are entitled to examine the trust property and the accounts and vouchers and other
24 documents relating to the trust and its administration."
25 52. Trustees who fail to keep proper records or fail to account or provide information to the
26 beneficiaries when required can be held liable for breach of fiduciary duty, damages, and
27 attorney's fees. (Prob. Code §§16060-16062, 17200, subd. (b)(7), 17211, subd. (b).)
28
-9-
PETITION
1 53. It is well established in California case law that the failure by a trustee to maintain proper
2 records and receipts results in a presumption against the trustee that the item is improper.
(See Blackmon v. Hale (1970) 1 Ca1.3d 548, 560; Estate of McCabe (1950) 98 Cal.App.2d
3
503, 505; and Purdy v. Johnson (1917) 174. Ca1.521, 527.)
4
54. Trustees are under a duty to prove every item of their account by "satisfactory evidence"
5
and the burden is on them, not the beneficiary; any doubt arising from their failure to keep
6 proper records, or from the nature of the proof they produce, must be resolved against them.
7 (See Estate of McCabe (1950) 98 Cal.App.2d 503, citing to Purdy v. Johnson (1917) (1917)
8 174. Ca1.521.)
55. Under Probate Code section 16464:
9
10 (a) Except as provided in subdivision (b), (c), or (d), the trustee can be relieved of liability
for breach of trust by provisions in the trust instrument.
11 (b) A provision in the trust instrument is not effective to relieve the trustee of liability
(1) for breach of trust committed intentionally, with gross negligence, in bad faith, or
12 with reckless indifference to the interest of the beneficiary, or (2) for any profit that
13 the trustee derives from a breach of trust. (Emphasis added).
14
56. Probate Code sections 18001-18005 also establish personal liability for a breaching trustee.
15
57. A trustee is personally liable for obligations arising from ownership or control of trust
16
property only if the trustee is personally at fault. (Prob. Code section 18001)
17
58. A trustee is personally liable for torts committed in the course of administration of the trust
18 only if the trustee is personally at fault. (Prob. Code section 18002).
19 59. Liability under such circumstances can be determined by petition under Probate Code
20 section 17200. (Prob. Code section 18005).
21 60. On information and belief, Respondent has:
a. used Trust funds as his own
22
b, commingled Trust funds with personal funds;
23
c. failed to properly allocate assets to the bypass trust;
24
d. failed to follow the Trust terms;
25 e. failed to inventory, appraise, and account for tangible personal property
26 f. disposed of personal property without providing an inventory, appraisal, or account
27 for tangible personal property or reasonable time for Petitioner to select items;
g. Failed to make distributions to Petitioner under the bypass trust;
28
- 10 -
PETITION
1 h. Incurred waste, loss and damage to the Trust by failing to make Trust property
2 productive; and
i. Failed to account for any Trust expenses
3
61. Accordingly, Respondent should be compelled to produce documents for all transactions, be
4
surcharged and/or be held personally liable any matters he cannot account for, or for which
5
are the result of his waste, mismanagement, impropriety, gross negligence, reckless
6 indifference and/or malfeasance.
7
8 IV. JURISDICTION, VENUE, AND NOTICE REQUIREMENTS
62. This court has jurisdiction over the Trust under Probate Code §§17000, 17002, 17003, and
9
17004. Venue is proper in this Court under Probate Code §§4523(b) where the agent resides,
10
17002, subd. (b)(2) because the residence or usual place of business of Respondent is in Placer
11
County, California per the notification by trustee.
12 63. Petitioner shall provide notice of the time and place of the hearing and a copy of this
13 Petition at least thirty (30) days before the time set for the hearing on this Petition pursuant
14 to Probate Code sections 4544 (15 days) and 17203 (30 days) and California Rules of Court
15 rule 7.902. The name and mailing address of each beneficiary of the Trust and any other
person entitled to notice, as known to Petitioner after diligent inquiry are as follows:
16
Name/Address Age Relationship
17
Kurt Dagenbach Deceased Settlor
18
Ursula Dagenbach Deceased Settlor
19 Michael Dagenbach Adult Petitioner, V2 residual
C/O The Demiris Law Firm, PC beneficiary, and son of settlors.
20 700 Ygnacio Valley Road, Suite 140
Walnut Creek, CA 94596
21
22 Jeffrey Dagenbach Adult Respondent, 1/2 residual
317 Fern Street beneficiary, trustee and son of
23 Roseville, CA 95678 settlors
24 Jean Shrem Adult Attorney for Jeffrey Dagenbach
25 11720 San Pablo Avenue, Suite C
El Cerrito, CA 94530
26
64. No request for special notice has been received or filed.
27
65. No bond is necessary because the Trust does not require one.
28 VI. PRAYER FOR RELIEF
11 —
PETITION
1 WHEREFORE, Petitioner prays for relief as follows:
2 1. Notice be deemed proper and complete;
2. For an order suspending Respondent Jeffrey Dagenbach as Trustee;
3
3. For an order removing Respondent Jeffrey Dagenbach as Trustee;
4
4. For an order appointing Petitioner Michael Dagenbach as sole interim trustee without bond
5
pending further Court order appointing Petitioner Jeffrey Dagenbach as sole successor
6 trustee.
7 5. For an order instructing interim trustee to administer the Trust according to its terms and to
8 fund and properly allocate assets to the Trust's bypass subtrust;
6. For an order instructing interim trustee to make pecuniary distributions with interest to the
9
beneficiaries and surcharge Jeffrey Dagenbach accordingly;
10
7. Jeffrey Dagenbach should be surcharged for all loss, waste, and anything he spent Trust
11
funds on that she is unable to account for;
12 8. For an order instructing Respondent Jeffrey Dagenbach to file a report and account for his
13 acts as trustee of the Trust and on behalf of Ursula Dagenbach;
14 9. For an order instructing Respondent Jeffrey Dagenbach to turn over all trust assets to
15 interim trustee;
10. For an order instructing Respondent Jeffrey Dagenbach not to use any Trust funds for his
16
17 defense in this litigation and to be surcharged against his beneficial interest to the extent he
18 has used Trust funds for his defense;
19 11. For an order for attorney's fees and costs; and
20 12. For any other relief, the Court deems necessary and proper.
21
22 Dated: 10/10/2022 THE DEMIRIS LAW FIRM, P.C.
23
24
By KONSTA TINE A. IRIS,, Esq.
25 Attorney for Peti loner, Michael Dagenbach
26
27
28
- 12 -
PETITION
VERIFICATION
2 I, the undersigned, am a party in this proceeding. I have read the foregoing and know the
contents thereof. The same is true of my own knowledge, except as to those matters which are
3
therein stated on information and belief, and as to those matters, I believe to be true.
4
Signed this October / 0 , 2022 CA,.". , Ca 5 \ , CA.
5
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct.
7
8
Michael Dagenbach
9
Signature by facsimile
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
- 13 -
PETITION
EXHIBIT "A"
A Professional Law Corporation • 11720 San Pablo Avenue, Suite C, El Cerrito, CA 94530
Phone: 510-882-9992 • Fax: 510-868-2620 • Jean@ShremLaw.Com • www.ShremLaw.com
August 26, 2022
VIA ELECTRONIC MAIL
Michael Dagenbach
aecko@aol.com
RE: ESTATE OF DAGEN ACH
Dear Beneficiary,
Jeffrey Dagenbach has contacted this office for assistance in administering and distributing the 2000
Dagenbach Family Living Trust, of which he is named the successor trustee. I will advise him of his
responsibilities as trustee of the trust and of the steps he will need to take to complete the distribution of
the assets. I am also enclosing the required statutory Notification by Trustee, along with a copy of the
trust.
We look forward to completing this work in a timely and cost-efficient manner. We estimate that barring
disputes or other unforeseen problems, the collection and valuation of the assets of the trust, filing
required tax returns and other work required to complete distribution will be completed within 6-12
months.
If you have questions about the status of the work or other matters relating to the administration of the
trust, please feel free to contact this office. However, please be advised that this office represents only the
trustee and not you individually. Thus, this office cannot give you legal advice concerning your interest
as a beneficiary. If you have any questions generally concerning your rights and interests concerning the
trust, please seek independent legal counsel to advise you.
Sincerely,
Skteot
-
Jean Shrem
Attorney at Law
Enclosure
cc: Jeffrey Dagenbach
NOTIFICATION BY TRUSTEE PURSUANT
TO PROBATE CODE §16061.7
As required by law, you are hereby provided with notice of the following information regarding
the 2000 Dagenbach Family Living Trust ("Trust").
1. The names of the Settlors of the Trust were Kurt Dagenbach and Ursula R. Dagenbach.
2. The Trust was executed on October 12, 2000 in their capacities as Settlors.
3 The Trust became irrevocable on August 11, 2022, upon Ursula R. Dagenbach's death,
having been predeceased by Kurt Dagenbach on December 30, 2018.
4. The name, mailing address, err al and telephone number of the trustee of the trust is:
Jeffrey Dagenbach
3.17 Fern Street
Roseville, CA 95678
jefdag@gmail.com
916-670-0294
5. The address of the principal place of trust administration is:
317 Fern Street
Roseville, CA 95678
6. You are entitled to receive from the trustee a true and complete copy of the terms of the Trust
by requesting same from the trustee listed above. However, the trustee has elected to provide
you with a copy of the Trust, which is hereby attached.
WARNING: YOU MAY NOT BRING AN ACTION TO CONTEST THE TRUST MORE
THAN 120 DAYS FROM THE DATE THIS NOTIFICATION BY THE TRUSTEE IS
SERVED UPON YOU OR 60 DAYS FROM THE DATE ON WHICH A COPY OF THE
TERMS OF THE TRUST IS DELIVERED TO YOU DURING THAT 120-DAY PERIOD,
WHICHEVER IS LATER.
Dated: August 26, 2022
Jean Shrem
Attorney for Successor Trustee Jeffrey Dagenbach
of the 2000 Dagenbach Family Living Trust
THE 2000 DAGENBACH FAMILY LIVING TRUST
ARTICLE ONE
Co-trustees
KURT DAGENBACH and URSULA R. DAGENBACH (called the trustees)
declare that KURT DAGENBACH and URSULA R. DAGENBACH (called the
settlors and sometimes referred to as husband and wife) have
transferred and delivered to the trustees, without consideration,
the property described in Schedule A, attached to this
instrument.
ARTICLE TWO
Trust Estate
A. All property subject to this instrument from time to time
is referred to as the trust estate and shall be held,
administered, and distributed according to this instrument.
B. All property transferred to this trust described in
Schedule B is community property and shall retain its character
as such notwithstanding the transfer to this instrument. Any
power reserved to settlors to alter, amend, modify, or revoke
this trust, in whole or in part, is held by the settlors during
their joint lifetimes in their capacity as managers of the
community property, subject to all restrictions imposed by law on
their management of the community property.
C. All separate property of either settlor transferred to
the trust was, before its transfer, the separate property of that
settlor and shall retain its character as such notwithstanding•
its transfer to this trust.
D. All quasi-community property of either settlor
transferred to the trust was, before its transfer, quasi-
community property of that spouse and shall retain its character
as such notwithstanding its transfer to this trust. For
convenience, any quasi-community property transferred to this
trust is referred to as separate property of the settlor to whom
it belonged before the transfer; however, the settlors do not
intend by this reference to change the character of this property
from quasi-community property to separate property.
ARTICLE THREE
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 1
property to be insufficient for the settlor who owns such
property, the trustees shall pay to or apply for the benefit of
the settlor as much of the principal of that settlor's separate
estate as the trustees consider necessary for the settlor's
health, education, support, maintenance, comfort, welfare, or
happiness to maintain at a minimum the settlor's accustomed
manner of living, without taking into consideration funds and
assets available to the settlor held free of this trust.
ARTICLE FOUR
Married settlor incapacited: Distribution to either spouse
If at any time, in the trustees' discretion or as certified
in writing by two licensed physicians who are not related by
blood or marriage to either settlor or any beneficiary of this
trust, either settlor becomes physically or mentally
incapacitated, the trustees shall pay to the other settlor or
apply for the benefit of either settlor, first from the community
estate until it is exhausted and then from the separate estates
of either or both settlors (in equal shares to the extent
possible), as much of the net income and principal of the trust
estate as the trustees consider necessary to provide for the
settlor's health, education, support, and maintenance.
The trustees shall act in this manner whether or not a Court
of competent jurisdiction has declared a settlor incompetent or
has appointed a conservator. If a conservator has been appointed
for a settlor, 'however, the trustees shall take into account any
payments made for that settlor's benefit by the conservator.
This trustees' power relating to incapacity shall remain in
effect until, in the trustees' discretion or as certified in
writing by two licensed physicians who are not related by blood
or marriage to either settlor or any beneficiary of this trust,
that incapacity is terminated and that settlor is again able to
manage that settlor's own affairs.
The nonincapacitated settlor may also withdraw, from time to
time, accumulated trust income and principal of community
property and of separate property contributed by that settlor.
Distribution of income and principal from community property
shall be held and administered as community property by the
nonincapacitated settlor. The trustees shall accumulate and add
any undistributed net income to principal of the community or the
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 3
separate estate.
If a conservator of the person or estate is appointed for
either settlor, the trustees shall take into account any payments
made for that settlor's benefit by the conservator.
ARTICLE FIVE
Payments to others from community property
The settlors, acting jointly, may at any time direct the
trustees in writing to pay single sums or periodic payments out
of the community property in the trust estate to any other person
or organization.
Payments to others from settlor's separate property
The settlor who has contributed separate property may direct
the trustees in writing to pay single sums or periodic payments
out of that separate property to any other person or
organization.
Power may be exercised by settlor's conservator
Each settlor's power to so direct the trustees shall be
personal to the settlor, except that this power may be exercised
by the settlor's conservator or by the agent named in a settlor's
durable power of attorney authorizing such action to the extent
that payments to one or more persons qualify for the annual
federal gift tax exclusion.
ARTICLE SIX
Division of trust into two trusts after death of first spouse
A. The first settlor to die shall be called the deceased
spouse, and the remaining spouse shall be called the surviving
spouse. After the deceased spouse's death, the trustee shall
divide the trust estate (including any additions made to the
trust by reason of the deceased spouse's death, e.g., from the
decedent's will or life insurance policies on the decedent's
life) into two separate trusts, designated as the survivor's
trust and the bypass trust.
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 4
Deferral of distribution or division of trust assets
B. Whenever the trustees are directed to make a distribution
of trust assets or a division of trust assets into separate
trusts or shares after a settlor's death, the trustees may, in
the trustees' discretion, defer that distribution or division
until six months after the settlor's death or for a longer period
if the circumstances warrant the delay.
When the trustees defer distribution or division of the
trust assets, the deferred distribution or division shall be made
as if it had taken place at the time prescribed in this
instrument in the absence of this paragraph. All rights given to
the beneficiaries of those trust assets under other clauses of
this instrument shall be considered to have accrued and vested as
of that prescribed time.
Survivor's trust
C. The survivor's trust shall consist of the surviving
spouse's separate property that is a part of the trust estate and
the surviving spouse's interest in the settlors' community estate
included in or added to the trust estate in any manner, including
any undistributed or accrued income on it, and the marital
deduction amount identified in paragraph D of this article.
Pecuniary marital formula (bypass trust as residue)
D. The marital deduction amount shall be a pecuniary amount
equal to the minimum amount necessary as a federal estate tax
marital deduction to entirely eliminate (or reduce to the maximum
extent possible) any federal estate tax on the deceased spouse's
death, after taking into account all factors relevant to this
estate tax objective, including but not limited to:
(1) All deductions claimed and allowed in determining the
estate tax payable by reason of the deceased spouse's death.
(2) The net value of all other property included in the
deceased spouse's gross estate, whether or not it is given under
this instrument and whether it passes at the time of the deceased
spouse's death or has passed before the deceased spouse's death
to or in trust for the surviving spouse, so that it is included
in the deceased spouse's gross estate and qualifies for the
federal estate tax marital deduction. If the surviving spouse
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 5
disclaims any property that would otherwise qualify for the
federal estate tax marital deduction, this disclaimer shall be
disregarded.
(3) All credits allowed for federal estate tax purposes
other than any credit allowable under Internal Revenue Code
section 2011, unless and to the extent that death tax would be
payable to the state or states regardless of the federal credit,
as long as no credit that results in disallowance of the marital
deduction is taken into account in determining the size of the
survivor's trust.
The bypass trust shall consist of the balance of the trust
estate.
Overallocation to bypass trust
If, however, the aggregate value of all property
specifically allocated to the bypass trust under this instrument
and all property payable to the bypass trust from any other
source is greater than the balance of the trust estate, the
bypass trust shall consist of all such property.
Satisfaction of amount
The trustees shall satisfy the amount so determined in cash
or in kind, or partly in each, and shall allocate to the marital
deduction amount of the survivor's trust only assets that are
eligible for the federal estate tax marital deduction. No assets
for which a credit for foreign death taxes is allowed under the
federal estate tax law applicable to the deceased spouse's estate
shall be allocated to the survivor's trust, unless there is
insufficient other property to fully fund the marital deduction
amount of the survivor's trust.
Date-of-distribution value funding
Assets allocated in kind shall be considered to satisfy the
marital deduction amount on the basis of their net fair market
values on the date or dates of distribution to the survivor's
trust.
Marital deduction savings clause
E. The settlors intend that the survivor's trust qualify for
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 6
the marital deduction under Internal Revenue Code section 2056 if
the executor chooses to make the required election. In no event
shall the trustees take any action or have any power that will
impair the marital deduction, and all provisions regarding the
survivor's trust shall be interpreted to conform to this primary
objective.
Disclaimer clause
If the surviving spouse disclaims any property given to
him/her outright, or all or a portion of his/her interest in the
survivor's trust, the property disclaimed by the surviving spouse
shall be allocated to the bypass trust and administered as
provided in Article seven.
ARTICLE SEVEN
Proration according to law
A. Except as otherwise specifically provided in this
instrument (or in either settlor's will directing that the
property passing under the will be applied to the satisfaction of
a tax), all estate and other inheritance taxes, including
interest and penalties, imposed on or by reason of the inclusion
of any portion of the trust estate in the gross taxable estate of
either settlor may be paid by the trustee and charged to,
prorated among, or recovered from the trust estate or the persons
entitled to the benefits under these trusts as provided in
Division 10 of the California Probate Code and applicable
provisions of the Internal Revenue Code. The trust estate
includes property subject to probate administration that is
directed to be added to the trust estate by reason of a settlor's
death.
Payment from disclaimer trust
Not withstanding any other provision in this trust, if the
surviving spouse disclaims any property given to him or her
outright or in trust, the amount of any increase in federal death
taxes that results from this disclaimer shall be paid out of the
disclaimed property.
Deceased spouse's expenses (other than taxes)
B. After the deceased spouse's death, the trustee shall pay
The 2000 DAGENBACH FAMILY LIVING TRUST
Page 7
out of the bypass trust the deceased spouse's last-illness and
funeral expenses, debts, and the expenses of administration of
the deceased settlor's probate estate. The burden of such
payments shall be allocated and charged to the separate and
community property of each settlor in accordance with California
Probate Code sections 19320-19326, with no last-illness and
funeral expenses being paid from the community property of the
survivi
Preview
1 KONSTANTINE A. DEMIRIS (SBN 240089) MICHAEL ALEXANDER SCHREIBER (SBN 271611) 2 THE DEMIRIS LAW FIRM, P.C. 700 Ygnacio Valley Road, Suite 140 3 Walnut Creek, California 94596 Tel: (925) 378-2520 4 Fax: (925) 378-2492 Email: kosta@demirislawfirm. corn 5 Email: mike@demirislawfirm. corn 6 Attorneys for Petitioner, 7 Michael Dagenbach, beneficiary 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF PLACER 10 In the matter of: CASE NO.: 11 THE 2000 DAGENBACH FAMILY PETITIONER MICHAEL DAGENBACH'S 12 LIVING TRUST and PETITION AGAINST JEFFREY DAGENBACH, TRUSTEE FOR INSTRUCTIONS, AND ORDERS 13 THE POWER OF ATTORNEY FOR FOR: URSULA DAGENBACH 1) SUSPENSION AND REMOVAL OF JEFFREY 14 DAGENBACH AS TRUSTEE; FOR DISTRIBUTIONS WITH INTEREST; 15 2) APPOINTMENT OF MICHAEL DAGENBACH AS INTERIM SOLE TRUSTEE 16 PURSUANT TO THE TERMS OF THE TRUST; 3) COMPELLING JEFFREY DAGENBACH AS 17 TRUSTEE AND POWER OF ATTORNEY FOR URSULA DAGENBACH TO ACCOUNT, 18 PRODUCE RECORDS, AND TURN OVER ASSETS TO THE TRUST; 19 4) INSTRUCTIONS TO JEFFREY DAGENBACH AS TRUSTEE AND ATTORNEY IN FACT FOR 20 URSULA DAGENBACH, NOT TO USE TRUST FUNDS FOR HIS DEFENSE; AND 21 5) FOR SURCHARGE OF JEFFREY DAGENBACH AND TO HOLD HIM 22 PERSONALLY LIABLE FOR BREACHES OF TRUST, WASTE, AND LOSS 23 [Probate Code, §§850-859, 4541 et seq. 12000 et 24 seq., 15642(b)(6), 15680, 16061.7-16061.9, 16420 et seq., 17200 et seq., 18000 et seq.] 25 Date: 02/03/2023 26 Time: 8:30am Dept: 40 27 Judge: 28 -1- PETITION 1 I. INTRODUCTION 2 Beneficiary, Michael Dagenbach ("Petitioner"), presents this petition against Jeffrey 3 Dagenbach, trustee for instructions, and orders for: 1) suspension and removal of Jeffrey 4 Dagenbach as trustee; 2) appointment of Michael Dagenbach as interim trustee; 3) compelling 5 Jeffrey Dagenbach as trustee and attorney in fact to Ursula Dagenbach to account, produce records, 6 and turn over trust assets; 4) instructions to Jeffrey Dagenbach as trustee and attorney in fact to 7 Ursula Dagenbach not to use trust funds for his defense 5) for surcharge of Jeffrey Dagenbach and 8 9 to hold him personally liable for breaches of fiduciary duty, breaches of trust, waste, and loss 10 ("Petition"). 11 II. FACTUAL ALLEGATIONS 12 1. Kurt Dagenbach ("Kurt") and Ursula Dagenbach ("Ursula") were married prior to execution 13 of the Trust. Their marriage produced two children: Petitioner and Jeffrey Dagenbach 14 ("Respondent"). 15 2. Petitioner is informed and believes that on October 12, 2000, Kurt and Ursula created the 16 2000 Dagenbach Family Living Trust ("Trust") and were the co-settlors, co-trustees, and 17 co-life beneficiaries. A true and correct copy of the Notification by trustee with copy of the 18 Trust is attached as Exhibit "A." 19 3. On same date, Ursula executed a power of attorney for finances ("POA") naming her 20 husband as agent, and Respondent as alternate agent - the power of attorney was effective 21 immediately. A true and correct copy of the POA is attached as Exhibit "B." The POA 22 allows for every financial action authorized by the uniform statutory power of attorney. 23 4. Petitioner is informed and believes that the Trust and POA were never amended nor 24 changed. 25 5. On December 30, 2018, Kurt died. Under Article Six section A. of the Trust, two subtrusts 26 were to be formed an irrevocable bypass trust and a survivor's trust. See Ex. "A" at Article 27 Six section A. and Article Nine section B. The survivor's trust has a mandatory exhaustion 28 -2- PETITION 1 requirement prior to using bypass trust funds. See Ex. "A" at Article Seven section D. 2 subdivision (4). It is believed that the two subtrusts were never funded nor accounted for. 3 6. During Ursula's life, Petitioner believes Respondent took action as POA as Ursula was 4 incapable of handling her own finances. This is evidenced by the fact he was on a checking 5 account ending xxxx5131. See Exhibit "C." Interestingly, this account was later changed 6 to a joint account with Respondent on it. This was purportedly for bill pay even though it 7 was a trust account and even though he was a POA. See checking account ending 8 xxxx5131 attached as Exhibit "D." Respondent later attempted to pay money from this account, post-death, to Petitioner and even to Petitioner's children, but when asked to 9 account, refused to do so and has failed to account to date even upon request to his attorney. 10 See written request to attorney Jean Shrem attached as Exhibit "E." 11 7. On August 11, 2022, Ursula died. Upon Ursula's death the Trust became irrevocable and 12 all funds were to be distributed to the bypass trust. See Ex. "A" at Article Eight section B. 13 8. Petitioner in good faith has requested information, an accounting, and records from 14 Respondent and been ignored and/or treated as if his basic English requests were 15 "confusing" even though such is required upon the death of the former trustee/change of 16 trustee under Probate Code section 16060-16062. See final written request to attorney Jean 17 Shrem on September 26, 2022 attached as Exhibit "E." As of the date of this writing, no 18 further response of any kind has been provided by Respondent's counsel. 19 9. Respondent has personally informed Petitioner that he must take items from the Trust real 20 property or they will be disposed of. Again, all of this has been done without any inventory, 21 appraisal, or accounting of the items. 22 Accordingly, Petitioner seeks the following relief. 23 24 II. LEGAL ANALYSIS 25 A. Respondent should be suspended and removed as trustee because he has violated 26 nearly every imaginable fiduciary duty, has demonstrated he is unfit to serve as 27 trustee, continues to breach the Trust, has failed to follow its terms, refuses to fund and allocate the Trust for the benefit of the beneficiaries, refuses to communicate or 28 - 3- PETITION 1 inform the beneficiaries of the status, failure to preserve assets, inventory or appraise 2 assets, and failed to report in violation of Probate Code Sections 15642, 16000-16013, 16060, 17200, and 17206. 3 10. All factual allegations alleged in paragraph 1-9 are re-alleged herein. 4 11. The Court should immediately suspend and remove Respondent because he has 5 demonstrated he is unfit to serve as trustee, continues to breach the Trust, has failed to fund 6 the Trust or follow its terms, refuses to allocate the Trust for the benefit of the beneficiaries, 7 refuses to communicate or inform Petitioner of the status and failed to inventory assets, 8 preserve assets or report in violation of Probate Code Sections 15642, 16000-16013, 16060, 17200, and 17206. 9 12. The court may suspend or remove a trustee who has committed a breach of trust. (Prob. C. 10 §§15642, subd. (b)(1) and (3), 16420, subd. (a)(5), 17200, subd. (b)(10).) 11 13. A trustee may be removed when the trustee is "insolvent or otherwise unfit to administer the 12 trust"; "substantially unable to manage the trust's financial resources or is otherwise 13 substantially unable to execute properly the duties of the office" (Cal. Prob Code 14 §15642(b)(2), (7)- (8).) 15 14. Substantial inability is determined under the Due Process in Competence Determination Act 16 (DPCDA) (Prob C §§810-813). See Capacity and Undue Influence: Assessing, Challenging, 17 and Defending (Cal CEB Action Guide). 18 15. Pending a petition on removal, the Court may suspend a trustee to preserve trust property 19 and may make any orders and take any other action necessary or proper to dispose of the 20 matters presented by the petition, including the appointment of a temporary trustee to 21 administer the trust in whole or in part. (Prob. C. §§ 15642, subd. (e), 17206.) 22 16. A court may suspend a trustee's powers and appoint a temporary trustee even without a 23 formal petition for removal. (Schwartz v. Labow (2008) 164 Cal.App.4th 417.) 24 17. Respondent unfortunately has done nothing to administer the Trust in nearly 4-years or to 25 probate Adrian's estate. 26 18. Respondent is non responsive, lacks impartiality, and intentionally, recklessly and willfully 27 failing to act even when requested to do so in writing. 28 -4- PETITION 1 19. Under the Trust, there are supposed to be allocations, inventorying, reporting, accounting, 2 and distributions, however Respondent has failed to follow the Trust terms. 3 20. Furthermore, Respondent is believed to have taken action as POA and has failed to report 4 anything or account. 5 21. Respondent should be immediately suspended and removed so the bypass trust can be 6 funded/protected and assets properly allocated, distributions made and the trust properly 7 administered. 8 22. Respondent failed to administer the Trust under its terms: Respondent has failed to fund the Trust or create subtrusts as required by its terms. (Prob. C. §15642(a).) The trustee has a 9 duty to administer the trust according to the trust instrument. (Prob. C. §16000.) The 10 guiding principle must be the intention of the settlor as expressed in the trust document. 11 (Kropp v. Sterling Say. & Loan Ass 'n (1970) 9 Cal.App.3d 1033.) 12 23 The violation by a trustee of any duty owed to the beneficiaries of the trust constitutes a 13 breach of trust. (Prob. C. §164001; City of Atascadero v. Merrill Lynch, Pierce, Fenner, & 14 Smith, Inc. (1998) 68 Cal.App.4t11 455.) 15 24. A pattern of conscious ongoing conscious breaches may justify suspension as the only 16 practical way to protect the beneficiaries from future breaches. (Cal. Trust and Probate 17 Litigation (Cont. Ed. Bar online ed. 2019) section 14.24, citing Dennis v. Rhode Island 18 Hosp. Trust Nat'l Bank (D. RI 1983) 571 F.Supp 623.) 19 25. Here, the bypass trust must be funded and any attempts to just give away money or dispose 20 of assets would be improper without an inventory and proper appraisal with allocation to the 21 bypass trust, whether from the POA account(s), joint accounts, or other accounts. It should 22 be noted that changing the title of the Trust account to a joint account is improper under the 23 terms of the Trust, which does not authorize such action anywhere. 24 26. Accordingly, suspension in the interim is essential to ensure that the Trust is protected and 25 administer in accordance with its terms pending evaluation of Respondent or an evidentiary 26 hearing and Petitioner should be awarded her mandatory attorney fees and costs by being 27 forced to bring this Petition under theories of substantial benefit to the Trust and common fund theories. 28 -5- PETITION 1 B. Petitioner should be appointed as interim trustee under the terms of the Trust and 2 Probate Code sections 15642(e) and 17206. 27. All factual allegations alleged in paragraph 1-26 are re-alleged herein. 3 28. The court may remove a trustee who has committed a breach of trust. (Prob. C. §§15642, 4 subd. (b)(1), 16420 subd. (a)(5), 17200, subd. (b)(10).) 5 29. Pending a petition on removal, the Court may suspend a trustee to preserve trustee property 6 and may any orders and take any other action necessary or proper to dispose of the matters 7 presented by the petition, including the appointment of a temporary trustee to administer the 8 trust in whole or in part. (Prob. Code §§ 15642 subd. (e), 17206.) A court may suspend a trustee's powers and appoint a temporary trustee even without a formal petition for removal. 9 Schwartz, at 417. 10 30. The court may appoint a trustee. (Prob. C. §17200, subd (b)(10).) 11 31. Here, Petitioner has hired experienced legal counsel and is ready to proceed with 12 administering the Trust for the benefit of the beneficiaries and is named as the successor 13 after Respondent. See Ex. "A" at Article Eighteen. 14 32. Respondent is in ongoing and continuing breach of the Trust, and needs to be, at the very 15 least, be suspended on an interim basis so the bypass trust can be funded with the improperly changed account funds and distributed. 16 33. Accordingly, the Court should appoint the Petitioner as sole interim trustee or alternatively 17 also appoint Petitioner as permanent trustee. 18 C. Respondent should be ordered to provide an accounting for all actions taken on behalf 19 of the Trust and Ursula Dagenbach, provide all Trust terms, requested information 20 concerning Trust terms, and transfer Trust assets to the successor trustee 21 34. All factual allegations alleged in paragraph 1-33 are re-alleged herein. 22 35. Respondent must be ordered to account for all actions taken on behalf of the Trust and 23 Ursula Dagenbach, provide all Trust terms, and transfer all assets to the interim sole trustee. 24 36. Under Probate Code §17200 subd. (b)(7)(C), beneficiaries may petition the court concerning 25 the internal affairs of the trust and ask the court to order the trustee to account if the trustee 26 has failed to account within 60 days after written request of the beneficiary and no account 27 has been made within six months preceding the request. Before 60 days lapse, under Probate 28 Code §17206, the court in its discretion may make any orders and take any other action -6 - PETITION 1 necessary or proper to dispose of the matters presented by the petition. All accounts to be 2 filed with the Court are governed by the provisions of Probate Code §1060 et. seq. 3 37. Under Probate Code §§16060.7, 16061.5, 16061.7, 16061.9, the trustee has a duty to 4 provide the terms of the trust and the trust instrument cannot waive the trustee's duty to 5 provide requested information. Under Probate Code sections 4541 and 4230-4234 an agent 6 under a POA has a duty to act according to the POA, not to commingle, to account, and 7 avoid conflicts of interest. An accounting is required under Probate Code section 16062 8 upon death of a trustee, change of trustee, or when the trust becomes irrevocable, as is the case here. An accounting can be obtained by petitioning the Court under Section 17200 for 9 a trust and Section 4541 for a power of attorney. 10 38. The Petitioner has standing to request an accounting for actions taken on behalf of the Trust 11 and Ursula Dagenbach and petition the Court to compel an account because he is the son of 12 Ursula Dagenbach and a named equal remainder beneficiary of the irrevocable bypass. See 13 Probate Code sections 17200 and 4541. Also, given the failure by Respondent to respond to 14 the request for information and state whether or not he will account, waiting the 60-days is 15 futile and the Court has discretion to make appropriate orders as equity and justice require. 16 39. The Court should order Respondent turn over all assets to the sole interim trustee pending 17 the litigation. 18 40. Accordingly, the Court should order Respondent to provide a Probate Code §1060 19 compliant accounting, transfer all trust assets, and provide all trust terms under Probate 20 Code sections 4541 and 17206. 21 D. Respondent should be precluded from using Trust funds to defend himself in this 22 action 23 41. All factual allegations alleged in paragraph 1-40 are re-alleged herein. 24 42. Pursuant to Probate Code §17200 subd. (b)(6), a petitioner may seek an order instructing the 25 Respondent that he may not spend trust funds to pay his litigation fees and costs in this case. 26 The courts have consistently held that trustees and executors may not spend trust or estate 27 funds on litigation that only furthers the fiduciary's own interest. 28 -7- PETITION 1 43. In Miller v. Campbell, et al, (2008) 162 Cal.App.4th 1331, the court held "the executor or 2 personal representative of an estate has the power, among others, to, [d]efend actions and 3 proceedings against the decedent, the personal representative, or the estate." (Prob. Code. 4 §9820.) Although this section gives the executor the power to defend actions brought 5 against the executor, it does not give the right to defend his/her personal interests at the 6 expense of the estate. 7 44. As clarified by the Law Revision Commission comments following §9820, "The authority 8 in subdivision (b) [of §9820] for a defense of actions and proceedings against the personal representative refers to actions and proceedings against the personal representative in his or 9 her representative capacity, not those against him or her individually." Miller, Supra, at 10 1339-1340. 11 45. The same rule - that a fiduciary may not use estate or trust funds to further his/her own 12 interests - applies to trustees. In Terry v. Conlan, (2005) 131 Cal.App.4th 1445, 1461, the 13 court held that: 14 If litigation is necessary for the preservation of the trust, the trustee is entitled to 15 reimbursement for his or her expenditures from the trust; however, if the litigation is specifically for the benefit of the trustee, the trustee must bear his or her own costs 16 incurred, and is not entitled to reimbursement from the trust. Id. at 1461. 17 46. Here, Respondent is a beneficiary of the Trust, and the Petitioners are concerned that she 18 will attempt to use Trust assets in some capacity to pay for her defense (assuming she can 19 retain and keep an attorney) to diminish the Trust estate out of spite and/or to favor her own 20 21 children, beyond what she has already done, which Petitioners believe to be free rent at the 22 Aptos Property, distributions, and other benefits that discovery will likely reveal. 23 47. Accordingly, the Court should instruct Respondent not to use any Trust funds in this 24 litigation to further his own self-interest. Respondent should be surcharged to the extent he 25 has used or will use any Trust funds for the defense of his personal interest. 26 /// 27 28 -8- PETITION 1 E. Respondent should be ordered to provide all records for each transaction and be personally liable and/or surcharged for any profit he obtained, matters she is unable to 2 account for or provide records for, are the result of her waste, mismanagement, impropriety, gross negligence, reckless indifference and/or malfeasance. 3 4 48. All factual allegations alleged in paragraphs 1-47 are re-alleged herein. 5 49. A trustee has a duty to keep the beneficiaries of a trust reasonably informed of the trust and 6 its administration. (Prob. Code §16060.) In addition, the trustee must provide any beneficiary (as defined in Prob. Code §24), on reasonable request, a report of information 7 relating to the administration of the trust relevant to the beneficiary's interest. (Prob. Code 8 §16061.) 9 50. A trustee has a duty to disclose complete information. California Law Revision 10 Commission Comments to Probate Code section 16060 refer to the Restatement (Second) of 11 Trusts §173 comment c (1957), which explains as follows concerning a trustee's duty to 12 disclose information: The trustee is under a duty to the beneficiary to give him upon his request at reasonable times 13 complete and accurate information as to the nature and amount of the trust property, and to permit him or a person duly authorized by him to inspect the subject matter of the trust and the 14 accounts and vouchers and other documents relating to the trust. Comment c: Terms of the trust. Although the terms of the trust may regulate the amount of 15 information which the trustee must give and the frequency with which it must be given, the beneficiary is always entitled to such information as is reasonably necessary to enable him to 16 enforce his rights under the trust or to prevent or redress a breach of trust. (emphasis supplied) 17 18 51. Furthermore, under California law, a beneficiary has the right to inspect trust records. 19 (Strauss v. Superior Court (1950) 36 Ca1.2d 396 ("Strauss").) Strauss, citing 2 Scott on 20 Trusts, §173, p.922, states that a "trustee has the duty to the beneficiaries to give them upon 21 their request at reasonable times complete and accurate information relative to the administration of the trust." This section in Scott on Trusts continues: "The beneficiaries 22 are entitled to know what the trust property is and how the trustee has dealt with it. They 23 are entitled to examine the trust property and the accounts and vouchers and other 24 documents relating to the trust and its administration." 25 52. Trustees who fail to keep proper records or fail to account or provide information to the 26 beneficiaries when required can be held liable for breach of fiduciary duty, damages, and 27 attorney's fees. (Prob. Code §§16060-16062, 17200, subd. (b)(7), 17211, subd. (b).) 28 -9- PETITION 1 53. It is well established in California case law that the failure by a trustee to maintain proper 2 records and receipts results in a presumption against the trustee that the item is improper. (See Blackmon v. Hale (1970) 1 Ca1.3d 548, 560; Estate of McCabe (1950) 98 Cal.App.2d 3 503, 505; and Purdy v. Johnson (1917) 174. Ca1.521, 527.) 4 54. Trustees are under a duty to prove every item of their account by "satisfactory evidence" 5 and the burden is on them, not the beneficiary; any doubt arising from their failure to keep 6 proper records, or from the nature of the proof they produce, must be resolved against them. 7 (See Estate of McCabe (1950) 98 Cal.App.2d 503, citing to Purdy v. Johnson (1917) (1917) 8 174. Ca1.521.) 55. Under Probate Code section 16464: 9 10 (a) Except as provided in subdivision (b), (c), or (d), the trustee can be relieved of liability for breach of trust by provisions in the trust instrument. 11 (b) A provision in the trust instrument is not effective to relieve the trustee of liability (1) for breach of trust committed intentionally, with gross negligence, in bad faith, or 12 with reckless indifference to the interest of the beneficiary, or (2) for any profit that 13 the trustee derives from a breach of trust. (Emphasis added). 14 56. Probate Code sections 18001-18005 also establish personal liability for a breaching trustee. 15 57. A trustee is personally liable for obligations arising from ownership or control of trust 16 property only if the trustee is personally at fault. (Prob. Code section 18001) 17 58. A trustee is personally liable for torts committed in the course of administration of the trust 18 only if the trustee is personally at fault. (Prob. Code section 18002). 19 59. Liability under such circumstances can be determined by petition under Probate Code 20 section 17200. (Prob. Code section 18005). 21 60. On information and belief, Respondent has: a. used Trust funds as his own 22 b, commingled Trust funds with personal funds; 23 c. failed to properly allocate assets to the bypass trust; 24 d. failed to follow the Trust terms; 25 e. failed to inventory, appraise, and account for tangible personal property 26 f. disposed of personal property without providing an inventory, appraisal, or account 27 for tangible personal property or reasonable time for Petitioner to select items; g. Failed to make distributions to Petitioner under the bypass trust; 28 - 10 - PETITION 1 h. Incurred waste, loss and damage to the Trust by failing to make Trust property 2 productive; and i. Failed to account for any Trust expenses 3 61. Accordingly, Respondent should be compelled to produce documents for all transactions, be 4 surcharged and/or be held personally liable any matters he cannot account for, or for which 5 are the result of his waste, mismanagement, impropriety, gross negligence, reckless 6 indifference and/or malfeasance. 7 8 IV. JURISDICTION, VENUE, AND NOTICE REQUIREMENTS 62. This court has jurisdiction over the Trust under Probate Code §§17000, 17002, 17003, and 9 17004. Venue is proper in this Court under Probate Code §§4523(b) where the agent resides, 10 17002, subd. (b)(2) because the residence or usual place of business of Respondent is in Placer 11 County, California per the notification by trustee. 12 63. Petitioner shall provide notice of the time and place of the hearing and a copy of this 13 Petition at least thirty (30) days before the time set for the hearing on this Petition pursuant 14 to Probate Code sections 4544 (15 days) and 17203 (30 days) and California Rules of Court 15 rule 7.902. The name and mailing address of each beneficiary of the Trust and any other person entitled to notice, as known to Petitioner after diligent inquiry are as follows: 16 Name/Address Age Relationship 17 Kurt Dagenbach Deceased Settlor 18 Ursula Dagenbach Deceased Settlor 19 Michael Dagenbach Adult Petitioner, V2 residual C/O The Demiris Law Firm, PC beneficiary, and son of settlors. 20 700 Ygnacio Valley Road, Suite 140 Walnut Creek, CA 94596 21 22 Jeffrey Dagenbach Adult Respondent, 1/2 residual 317 Fern Street beneficiary, trustee and son of 23 Roseville, CA 95678 settlors 24 Jean Shrem Adult Attorney for Jeffrey Dagenbach 25 11720 San Pablo Avenue, Suite C El Cerrito, CA 94530 26 64. No request for special notice has been received or filed. 27 65. No bond is necessary because the Trust does not require one. 28 VI. PRAYER FOR RELIEF 11 — PETITION 1 WHEREFORE, Petitioner prays for relief as follows: 2 1. Notice be deemed proper and complete; 2. For an order suspending Respondent Jeffrey Dagenbach as Trustee; 3 3. For an order removing Respondent Jeffrey Dagenbach as Trustee; 4 4. For an order appointing Petitioner Michael Dagenbach as sole interim trustee without bond 5 pending further Court order appointing Petitioner Jeffrey Dagenbach as sole successor 6 trustee. 7 5. For an order instructing interim trustee to administer the Trust according to its terms and to 8 fund and properly allocate assets to the Trust's bypass subtrust; 6. For an order instructing interim trustee to make pecuniary distributions with interest to the 9 beneficiaries and surcharge Jeffrey Dagenbach accordingly; 10 7. Jeffrey Dagenbach should be surcharged for all loss, waste, and anything he spent Trust 11 funds on that she is unable to account for; 12 8. For an order instructing Respondent Jeffrey Dagenbach to file a report and account for his 13 acts as trustee of the Trust and on behalf of Ursula Dagenbach; 14 9. For an order instructing Respondent Jeffrey Dagenbach to turn over all trust assets to 15 interim trustee; 10. For an order instructing Respondent Jeffrey Dagenbach not to use any Trust funds for his 16 17 defense in this litigation and to be surcharged against his beneficial interest to the extent he 18 has used Trust funds for his defense; 19 11. For an order for attorney's fees and costs; and 20 12. For any other relief, the Court deems necessary and proper. 21 22 Dated: 10/10/2022 THE DEMIRIS LAW FIRM, P.C. 23 24 By KONSTA TINE A. IRIS,, Esq. 25 Attorney for Peti loner, Michael Dagenbach 26 27 28 - 12 - PETITION VERIFICATION 2 I, the undersigned, am a party in this proceeding. I have read the foregoing and know the contents thereof. The same is true of my own knowledge, except as to those matters which are 3 therein stated on information and belief, and as to those matters, I believe to be true. 4 Signed this October / 0 , 2022 CA,.". , Ca 5 \ , CA. 5 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 7 8 Michael Dagenbach 9 Signature by facsimile 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 13 - PETITION EXHIBIT "A" A Professional Law Corporation • 11720 San Pablo Avenue, Suite C, El Cerrito, CA 94530 Phone: 510-882-9992 • Fax: 510-868-2620 • Jean@ShremLaw.Com • www.ShremLaw.com August 26, 2022 VIA ELECTRONIC MAIL Michael Dagenbach aecko@aol.com RE: ESTATE OF DAGEN ACH Dear Beneficiary, Jeffrey Dagenbach has contacted this office for assistance in administering and distributing the 2000 Dagenbach Family Living Trust, of which he is named the successor trustee. I will advise him of his responsibilities as trustee of the trust and of the steps he will need to take to complete the distribution of the assets. I am also enclosing the required statutory Notification by Trustee, along with a copy of the trust. We look forward to completing this work in a timely and cost-efficient manner. We estimate that barring disputes or other unforeseen problems, the collection and valuation of the assets of the trust, filing required tax returns and other work required to complete distribution will be completed within 6-12 months. If you have questions about the status of the work or other matters relating to the administration of the trust, please feel free to contact this office. However, please be advised that this office represents only the trustee and not you individually. Thus, this office cannot give you legal advice concerning your interest as a beneficiary. If you have any questions generally concerning your rights and interests concerning the trust, please seek independent legal counsel to advise you. Sincerely, Skteot - Jean Shrem Attorney at Law Enclosure cc: Jeffrey Dagenbach NOTIFICATION BY TRUSTEE PURSUANT TO PROBATE CODE §16061.7 As required by law, you are hereby provided with notice of the following information regarding the 2000 Dagenbach Family Living Trust ("Trust"). 1. The names of the Settlors of the Trust were Kurt Dagenbach and Ursula R. Dagenbach. 2. The Trust was executed on October 12, 2000 in their capacities as Settlors. 3 The Trust became irrevocable on August 11, 2022, upon Ursula R. Dagenbach's death, having been predeceased by Kurt Dagenbach on December 30, 2018. 4. The name, mailing address, err al and telephone number of the trustee of the trust is: Jeffrey Dagenbach 3.17 Fern Street Roseville, CA 95678 jefdag@gmail.com 916-670-0294 5. The address of the principal place of trust administration is: 317 Fern Street Roseville, CA 95678 6. You are entitled to receive from the trustee a true and complete copy of the terms of the Trust by requesting same from the trustee listed above. However, the trustee has elected to provide you with a copy of the Trust, which is hereby attached. WARNING: YOU MAY NOT BRING AN ACTION TO CONTEST THE TRUST MORE THAN 120 DAYS FROM THE DATE THIS NOTIFICATION BY THE TRUSTEE IS SERVED UPON YOU OR 60 DAYS FROM THE DATE ON WHICH A COPY OF THE TERMS OF THE TRUST IS DELIVERED TO YOU DURING THAT 120-DAY PERIOD, WHICHEVER IS LATER. Dated: August 26, 2022 Jean Shrem Attorney for Successor Trustee Jeffrey Dagenbach of the 2000 Dagenbach Family Living Trust THE 2000 DAGENBACH FAMILY LIVING TRUST ARTICLE ONE Co-trustees KURT DAGENBACH and URSULA R. DAGENBACH (called the trustees) declare that KURT DAGENBACH and URSULA R. DAGENBACH (called the settlors and sometimes referred to as husband and wife) have transferred and delivered to the trustees, without consideration, the property described in Schedule A, attached to this instrument. ARTICLE TWO Trust Estate A. All property subject to this instrument from time to time is referred to as the trust estate and shall be held, administered, and distributed according to this instrument. B. All property transferred to this trust described in Schedule B is community property and shall retain its character as such notwithstanding the transfer to this instrument. Any power reserved to settlors to alter, amend, modify, or revoke this trust, in whole or in part, is held by the settlors during their joint lifetimes in their capacity as managers of the community property, subject to all restrictions imposed by law on their management of the community property. C. All separate property of either settlor transferred to the trust was, before its transfer, the separate property of that settlor and shall retain its character as such notwithstanding• its transfer to this trust. D. All quasi-community property of either settlor transferred to the trust was, before its transfer, quasi- community property of that spouse and shall retain its character as such notwithstanding its transfer to this trust. For convenience, any quasi-community property transferred to this trust is referred to as separate property of the settlor to whom it belonged before the transfer; however, the settlors do not intend by this reference to change the character of this property from quasi-community property to separate property. ARTICLE THREE The 2000 DAGENBACH FAMILY LIVING TRUST Page 1 property to be insufficient for the settlor who owns such property, the trustees shall pay to or apply for the benefit of the settlor as much of the principal of that settlor's separate estate as the trustees consider necessary for the settlor's health, education, support, maintenance, comfort, welfare, or happiness to maintain at a minimum the settlor's accustomed manner of living, without taking into consideration funds and assets available to the settlor held free of this trust. ARTICLE FOUR Married settlor incapacited: Distribution to either spouse If at any time, in the trustees' discretion or as certified in writing by two licensed physicians who are not related by blood or marriage to either settlor or any beneficiary of this trust, either settlor becomes physically or mentally incapacitated, the trustees shall pay to the other settlor or apply for the benefit of either settlor, first from the community estate until it is exhausted and then from the separate estates of either or both settlors (in equal shares to the extent possible), as much of the net income and principal of the trust estate as the trustees consider necessary to provide for the settlor's health, education, support, and maintenance. The trustees shall act in this manner whether or not a Court of competent jurisdiction has declared a settlor incompetent or has appointed a conservator. If a conservator has been appointed for a settlor, 'however, the trustees shall take into account any payments made for that settlor's benefit by the conservator. This trustees' power relating to incapacity shall remain in effect until, in the trustees' discretion or as certified in writing by two licensed physicians who are not related by blood or marriage to either settlor or any beneficiary of this trust, that incapacity is terminated and that settlor is again able to manage that settlor's own affairs. The nonincapacitated settlor may also withdraw, from time to time, accumulated trust income and principal of community property and of separate property contributed by that settlor. Distribution of income and principal from community property shall be held and administered as community property by the nonincapacitated settlor. The trustees shall accumulate and add any undistributed net income to principal of the community or the The 2000 DAGENBACH FAMILY LIVING TRUST Page 3 separate estate. If a conservator of the person or estate is appointed for either settlor, the trustees shall take into account any payments made for that settlor's benefit by the conservator. ARTICLE FIVE Payments to others from community property The settlors, acting jointly, may at any time direct the trustees in writing to pay single sums or periodic payments out of the community property in the trust estate to any other person or organization. Payments to others from settlor's separate property The settlor who has contributed separate property may direct the trustees in writing to pay single sums or periodic payments out of that separate property to any other person or organization. Power may be exercised by settlor's conservator Each settlor's power to so direct the trustees shall be personal to the settlor, except that this power may be exercised by the settlor's conservator or by the agent named in a settlor's durable power of attorney authorizing such action to the extent that payments to one or more persons qualify for the annual federal gift tax exclusion. ARTICLE SIX Division of trust into two trusts after death of first spouse A. The first settlor to die shall be called the deceased spouse, and the remaining spouse shall be called the surviving spouse. After the deceased spouse's death, the trustee shall divide the trust estate (including any additions made to the trust by reason of the deceased spouse's death, e.g., from the decedent's will or life insurance policies on the decedent's life) into two separate trusts, designated as the survivor's trust and the bypass trust. The 2000 DAGENBACH FAMILY LIVING TRUST Page 4 Deferral of distribution or division of trust assets B. Whenever the trustees are directed to make a distribution of trust assets or a division of trust assets into separate trusts or shares after a settlor's death, the trustees may, in the trustees' discretion, defer that distribution or division until six months after the settlor's death or for a longer period if the circumstances warrant the delay. When the trustees defer distribution or division of the trust assets, the deferred distribution or division shall be made as if it had taken place at the time prescribed in this instrument in the absence of this paragraph. All rights given to the beneficiaries of those trust assets under other clauses of this instrument shall be considered to have accrued and vested as of that prescribed time. Survivor's trust C. The survivor's trust shall consist of the surviving spouse's separate property that is a part of the trust estate and the surviving spouse's interest in the settlors' community estate included in or added to the trust estate in any manner, including any undistributed or accrued income on it, and the marital deduction amount identified in paragraph D of this article. Pecuniary marital formula (bypass trust as residue) D. The marital deduction amount shall be a pecuniary amount equal to the minimum amount necessary as a federal estate tax marital deduction to entirely eliminate (or reduce to the maximum extent possible) any federal estate tax on the deceased spouse's death, after taking into account all factors relevant to this estate tax objective, including but not limited to: (1) All deductions claimed and allowed in determining the estate tax payable by reason of the deceased spouse's death. (2) The net value of all other property included in the deceased spouse's gross estate, whether or not it is given under this instrument and whether it passes at the time of the deceased spouse's death or has passed before the deceased spouse's death to or in trust for the surviving spouse, so that it is included in the deceased spouse's gross estate and qualifies for the federal estate tax marital deduction. If the surviving spouse The 2000 DAGENBACH FAMILY LIVING TRUST Page 5 disclaims any property that would otherwise qualify for the federal estate tax marital deduction, this disclaimer shall be disregarded. (3) All credits allowed for federal estate tax purposes other than any credit allowable under Internal Revenue Code section 2011, unless and to the extent that death tax would be payable to the state or states regardless of the federal credit, as long as no credit that results in disallowance of the marital deduction is taken into account in determining the size of the survivor's trust. The bypass trust shall consist of the balance of the trust estate. Overallocation to bypass trust If, however, the aggregate value of all property specifically allocated to the bypass trust under this instrument and all property payable to the bypass trust from any other source is greater than the balance of the trust estate, the bypass trust shall consist of all such property. Satisfaction of amount The trustees shall satisfy the amount so determined in cash or in kind, or partly in each, and shall allocate to the marital deduction amount of the survivor's trust only assets that are eligible for the federal estate tax marital deduction. No assets for which a credit for foreign death taxes is allowed under the federal estate tax law applicable to the deceased spouse's estate shall be allocated to the survivor's trust, unless there is insufficient other property to fully fund the marital deduction amount of the survivor's trust. Date-of-distribution value funding Assets allocated in kind shall be considered to satisfy the marital deduction amount on the basis of their net fair market values on the date or dates of distribution to the survivor's trust. Marital deduction savings clause E. The settlors intend that the survivor's trust qualify for The 2000 DAGENBACH FAMILY LIVING TRUST Page 6 the marital deduction under Internal Revenue Code section 2056 if the executor chooses to make the required election. In no event shall the trustees take any action or have any power that will impair the marital deduction, and all provisions regarding the survivor's trust shall be interpreted to conform to this primary objective. Disclaimer clause If the surviving spouse disclaims any property given to him/her outright, or all or a portion of his/her interest in the survivor's trust, the property disclaimed by the surviving spouse shall be allocated to the bypass trust and administered as provided in Article seven. ARTICLE SEVEN Proration according to law A. Except as otherwise specifically provided in this instrument (or in either settlor's will directing that the property passing under the will be applied to the satisfaction of a tax), all estate and other inheritance taxes, including interest and penalties, imposed on or by reason of the inclusion of any portion of the trust estate in the gross taxable estate of either settlor may be paid by the trustee and charged to, prorated among, or recovered from the trust estate or the persons entitled to the benefits under these trusts as provided in Division 10 of the California Probate Code and applicable provisions of the Internal Revenue Code. The trust estate includes property subject to probate administration that is directed to be added to the trust estate by reason of a settlor's death. Payment from disclaimer trust Not withstanding any other provision in this trust, if the surviving spouse disclaims any property given to him or her outright or in trust, the amount of any increase in federal death taxes that results from this disclaimer shall be paid out of the disclaimed property. Deceased spouse's expenses (other than taxes) B. After the deceased spouse's death, the trustee shall pay The 2000 DAGENBACH FAMILY LIVING TRUST Page 7 out of the bypass trust the deceased spouse's last-illness and funeral expenses, debts, and the expenses of administration of the deceased settlor's probate estate. The burden of such payments shall be allocated and charged to the separate and community property of each settlor in accordance with California Probate Code sections 19320-19326, with no last-illness and funeral expenses being paid from the community property of the survivi