Preview
Electronically Filed
11/25/2020 1:25 PM
Superior Court of California
Mercy Hall, (SBN 264131) County of Stanislaus
HALL LAW FIRM, P.C. Clerk of the Court
354 Pine Street, 7” Floor
San Francisco, CA 94104 By: Yukari Williams, Deputy
Telephone: (415) 496-9273
Facsimile: (415) 520-6881 $435PD
E-Mail: mercy@mercyhall.com
Attorneys for Petitioner:
FREMONT BANK,
Trustee
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF STANISLAUS
In re the matter of: Case No.: 445058
10 FOURTH ACCOUNT & REPORT OF
TRUSTEE OF THE ERICE PIERCE SPECIAL
11 THE ERIC PIERCE SPECIAL NEEDS TRUST NEEDS TRUST; PETITION TO SETTLE
ACCOUNT; TO CONFIRM TRUSTEE FEES;
12 AND TO FIX AND ALLOW ATTORNEY
13 FEES AND COSTS (Probate Code §§1060 &
17200)
14
DATE: March 9, 2021
15 TIME: 8:30 am
DEPT: 22
16
17 FREMONT BANK, Trustee of the ERIC PIERCE SPECIAL NEEDS TRUST present its verified
18 Fourth Account and Report; Petition to Settle the Account; to Confirm Trustee Fees; and to Fix and
19 Allow Attorney Fees and Costs; (Probate Code §§ 1060 and 17200).
20 I INTRODUCTION
21 1. Background. The Trust was established by Court Order dated October 5, 2012 under Case
22 #661022.
23 2. Jurisdiction. This Court has jurisdiction over this matter pursuant to Probate Code §17000,
24 et seq.
25 3. Venue. Venue is proper in that this county approved the compromise of disputed claim and is
26 also the county in which the Beneficiary resides.
27
28
1
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
4. Trustee. FREMONT BANK (hereinafter referred to as “Trustee”) is the current Trustee of
the Trust.
5. Beneficiary. Beneficiary, ERIC PIERCE (hereinafter referred to as “ERIC” or
“BENEFICIARY” is 10 years of age (Date of Birth 4/9/2010).
Il. HISTORY
6. Court Orders. The Court has made and approved the following orders related to this Trust
matter:
a. October 5, 2012. A person injury lawsuit was filed on behalf of ERIC PIERCE (“ERIC”)
title: PIERCE v. County of Stanislaus, et al., Stanislaus County Superior court, Case No.
10 661022 (herein the “Lawsuit”). A settlement was reached, and on October 5, 2012, an
11 Order Approving Compromise of Disputed Claim and Establishing Special Needs Trust
12 (“Order”) was entered. The Order approved a net settlement to ERIC $3,838,834.57.
13 Pursuant to the Order, $1,800,000 of the net settlement was used to fund an annuity whose
14 monthly payments were used to fund an annuity whose monthly payments are payable to
15 ERIC PIERCE Special Needs Trust (the “SNT”). Attached hereto as Exhibit A is the
16 annuity payment schedule as approved and authorized in the Order. The annuity
17 compounds annually at 3% and continues monthly payments through March 15, 2032. A
18 second stream of annuity begins payment on April 15, 2032.
19 The balance of ERIC’s net settlement was placed in the ERIC PIERCE QUALIFIED
20 SETTLEMENT FUND (“QSF”) pending completion of legal and financial planning.
21 d. July 22, 2013. The Order on Petition to Bring the Trust Under Continuing Jurisdiction of
22 the Probate Court and to A pprove and A llow A ttorney Fees was entered. The court ordered
23 the Trust to be under continuing court jurisdiction with annual account and report;
24 authorized Fremont Bank to receive reasonable trustee fees on an interim basis, subject to
25 court confirmation; authorized trustee to invest up to $1 million to obtain a loan of
26 $500,000 to purchase a home for ERIC; authorized payment of caregiver services of
27 $25/hour for up to 40 hours per week and found the remaining service provided to ERIC
28
2
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
by his grandmother, JULIE ROGER, to be in lieu of rent; authorized up to $30,000 for
purchase of a modified van; approved attorney fees; and set compliances for filing of first
account and report.
August 14, 2013. Ex Parte Order to Disburse QSF Fund to Special Needs Trust was
issued, ordering the remaining settlement funds to be distribute to the SNT. On August
23, 2013, $2,034,974.80 was transferred from the Eric Pierce QSF to the SNT. A small
reserve was held in the QSF for payment of taxes and administrative fees.
September 26, 2014. Approved and settled first account; confirmed that bond is not
required; confirmed payment to Risk Management Services, Inc. for caregiving services;
10 confirmed trustee fees; authorized attomey fees; and set compliances for filing of second
11 account and report.
12 November 9, 2015. Approved and settled second account; confirmed Trustee fees;
13 approved attorney fees; and set compliances for filing of third account.
14 December 8, 2017: Approved and settled Third Account and Report; confirmed trustee
15 fees; approved attorney fees; and set compliance for filing of fourth account.
16 Ill. ACCOUNTING
17 7. Trust. Pursuant to the terms of the Trust, the Trustee shall present the accounting of the assets
18 of the Trust to the Court for settlement and allowance in the manner provided in California Probate
19 Code Section § 1060, et seq.
20 8. Fourth Account & Report of Trustee. The Trustee’s account of the Trust covers the period
21 from July 1, 2017 June 30, 2019. A Summary of Account is attached hereto, and a full, true and
22 correct account setting forth all credits and charges of Petitioner as Trustee is attached as Exhibit B.
23 9. Investments. During the account period, all cash of the Trust estate was invested and
24 maintained in interest bearing accounts or investments authorized by law or the governing instrument,
25 except for an amount of cash that is reasonably necessary for the orderly administration of the estate.
26 10. Capital Changes. No capital changes occurred during the account period.
27 11. Liabilities. The Trust has no liabilities.
28
3
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
12. Transactions. The following transactions as in in the Schedule of Accounts (Exhibit B) may
appear as unusual or otherwise require explanation:
a. Annuity. The Annuity Income listed on pages 19-20 of Schedule A — Receipts is the
income from the $1,800,000 annuity as referred to in Paragraph #6b page 2 of this
petition in the amount of $83,485.98.
b. Trustee Fees. Fremont Bank and Merrill Lynch fees listed under Administrative
Expenses on pages 1 - 4 of Schedule C Disbursements.
1 Fremont Bank Trustee Fees are entries characterized as “Trust Department Fee—
ML Shadow” and total $$17,629.81. These fees are within the parameters of the
10 Trustee fee agreement as attached hereto as Exhibit C as approved by Court
11 Order dated July 22, 2013.
12 IL Merrill Lynch Fees are entries characterized as “Investment Advisory Fee” and
13 total $19,119.48.
14 13. Bond. Pursuant to Probate Code §15602 and to the terms of the Trust, a corporate fiduciary
15 acting as Trustee shall not be required to furnish bond.
16 14. No Affiliate Relationships. During the accounting period, neither the Trustee nor its attorney
17 of record had any family or affiliate relationship with any agent hired by Petitioner as Trustee.
18 Iv. TRUSTEE FEES
19 15. Confirm Trustee Fees. Petitioner has managed and administered the beneficiary’s Trust estate
20 frugally and without waste, collecting income and principal, investing the sums available for
21 investment, retaining and disposing of property and investments, and apply or disposing of the income
22 or corpus of the trust estate as required by law, the governing instrument and the order of the Court,
23 as detailed in the schedules attached to this petition. Petitioner’s annual fee for the administration of
24 special needs trusts is 1.25% of the market value on the first million, and .90% on the next million,
25 pursuant to the Fee Schedule approved by Court Order dated July 22, 2013. Fees are recalculated
26 based on the market value at the end of each month.
27
28
4
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
16. Per Court order dated July 22, 2013, permission was granted to FREMONT BANK to pay
itself interim Trustee fees which are to be confirmed by the Court at the time of the accountings.
Petitioner has received compensation in the amount of $17,630.11. Petitioner seeks an Order of this
Court confirming payment of Trustee fees to Petitioner in the amount of $17,630.11.
Vv ATTORNEY FEES
17. Petitioner retained the services of HALL LAW FIRM, P.C. on March 26, 2016 in all matters
conceming the Trust in which it was necessary to have advice of counsel in the proper administration
and conduct of the Trust, including the establishment of the Trust and the preparation of this account
and report.
10 18. Attomey’s Fees - HALL LAW FIRM, P.C. Petitioner now seeks an order of this court to
11 authorize and direct the Trustee to pay to HALL LAW FIRM, P.C. the amount of $3,950.00 for
12 attorney’s fees and $316.55 in costs, representing the reasonable value of legal services to the Trustee.
13 A detailed description of those services is set forth in the Declaration of MERCY L. HALL attached
14 hereto as Exhibit D.
15 19. Petitioner now seeks an order of this court to authorize and direct the Trustee to pay HALL
16 LAW FIRM, P.C. compensation for up to 4 hours of additional attorney services at the rate of $450
17 per hour and for up to 4 hours of additional paralegal services at the rate of $200 per hour for paralegal
18 services required to subsequent to filing the current petition. A detailed description of those additional
19 services will be set forth in a supplemental declaration supporting the request for additional fees to
20 be filed in a timely manner prior to the hearing on this matter.
21 20. Pursuant to Court Order dated December 8, 2017, Petitioner also seeks an order of this court
22 to confirm $1,279.00 for fees paid on account in the amount of $1,127.00 for up to two (2) additional
23 hours of attorney service and up to eleven (11) additional hours of paralegal service and $152.00 for
24 filing fees advanced attached hereto as Exhibit E.
25 Mill
26 Mill
27 Mill
28
5
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
VI. NOTICE
21. Notice. There have been no requests for special notice. The persons entitled to notice of
hearing on this petition include the Beneficiary and members of the Trust advisory committee.
Petitioner is also providing notice to several government department as follows:
e ERIC PIERCE, Beneficiary, 3716 Chant Ct. Modesto, CA 95355
e JULIE ROGERS, Grandmother and Trust Protector, 3716 Chant Ct. Modesto, CA 95355
e DEPARTMENT OF HEALTH CARE SERVICES, DIRECTOR’S OFFICE, MS 4720,
P.O. Box 997413, Sacramento, CA 95899-7413
DEPARTMENT OF STATE HOSPITALS, DIRECTOR’S OFFICE, 1600 9" Street,
10 Sacramento, CA 95814
11 Mill
12 Mill
13 Mill
14 Mill
15 Mill
16 Mill
17 Mill
18 Mill
19 Mill
20 Mill
21 Mill
22 Mill
23 Mill
24 Mill
25 Mill
26 Mill
27 Mill
28
6
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
1 | WHEREFORE, Petitioner requests, that:
2 1 The Court find that notice of hearing has been given as required by law;
3 2 The Court make an order approving, allowing, and settling the attached account and report of
4 the ERIC PIERCE SPECIAL NEEDS TRUST as filed;
The Court confirm payment by and to FREMONT BANK for Trustee fees in the amount of
$17630.11 from the ERIC PIERCE SPECIAL NEEDS TRUST, as compensation for services
rendered as Trustee for the Trust during the accounting period;
The Court authorized and direct the Trustee to pay HALL LAW FIRM, P.C. $3,950.00 for
attorneys’ fee and $316.55 in costs rendered to the petitioner during the account period;
10 The Court confirm payment of $1,279.00 to HALL LAW FIRM, P.C. for fees paid on account
11 for up to two (2) additional hours of attorney service and up to eleven (11) additional hours of
12 paralegal service;
13 The Court authorized and direct the Trustee to pay HALL LAW FIRM, P.C. for up to 4
14 additional hours of attorney services at $450/hour and up to 4 additional hours of paralegal
15 service at $200/hour as needed for preparation and appearance at Court and any follow-up
16 necessary upon receipt of order; and
17 For such other relief that the Court deems proper.
18
19 DATED: November 18, 2020 a=
Chota
fe
FREMONT BANK,
20
BY: Stephen Ink
PRR
21
22 Its: — A Senior Lead Trust Officer
Petitioner and Trustee
23
24
25
DATED: November 18, 2020 = Wath
LL, Esq
26 Attorney Petitioner and Trustee
27
28
6
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
VERIFICATION
Stephen Ink
St declare
I am the petitioner in the above-entitled matter and I declare that I have read the foregoing FOURTH
ACCOUNT & REPORT OF TRUSTEE OF THE ERIC PIERCE SPECIAL NEEDS TRUST;
PETITION TO SETT ACCOUNT; TO CONFIRM CAREGIVER FEES; TO CONFIRM TRUSTEE
FEES; AND TO FIX AND ALLOW ATTORNEY FEES & COSTS, and the requests designated
therein, and know its contents. The account, which includes the report and the supporting schedules,
is true of my own knowledge, except for the matters stated therein on my information and belief, and
as to those matters, I believe them to be true. The account contains a full statement of all charges
10 against me and all credits to which I am entitled in the estate during the account period.
11 I declare under penalty of perjury under the laws of the State of California that the foregoing
12 is true and correct. Executed in the City of Fremont California.
13
Chex MOT
fof
14 DATED: aa 11/18/2020
LE BY ~-- fA
FREMONT BANK,
15
16 BY Stephen
— SUSE SE Ink
17 Its Senior ae
Re Lead Trust
ee Officer
Se
Petitioner and Trustee
18
19
20
21
22
23
24
25
26
27
28
7
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
10
11
12
EXHIBIT “A”
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
8
PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE
ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058
{
ATTACHMENT TO PETITION AND/OR ORDER
¥OR MINOR'S COMPROMISE
FOR:
ERIC PIERCE ~ DOB; 04/09/2010
ment:
In consideration of the Petition and/or Order for Minor’s Compromise, attached hereto, Lexington Insurance
Company (the “Insurer”), on behalf of County of Stanislaus (the “Défendant”), agrees to settle thely claim for Eric
Pierce, a minor, by and through his Guardian ad Litem, Renae Jefferson (the “Plaintiff”) according to the schedule
as follows :
Guaranteed Expected
Payout Payout
Periodic Payments made payable to The ric Pierce Special Needs Trust
(the “Payee”) according to the schedule as follows (the "Periodic Payments"):
1. Guarantee lonthly Payment;
$3,000 paid monthly, guaranteed for 19 years and 3 months,
compounding annually at 3%
Conmnencing 01/15/2013 with the last guaranteed payment.03/15/2032 $ 919,989 $ 919,989
(See attached Yield INustraiion)
2. Monthly Lifetime Payments
$5,700 paid monthly, for the life of Bric Pieree, guaranteed for 20 years,
compounding annually at 3%
Commencing 04/15/2032 with the last guaranteed payment 03/15/2052,
(See attached Yield INustration) $2,757,922 SUL271 soit
The total cost for above Perioiie Paynients is $1,800,000.
All sums set forth herein constituts damages on account of personal physioal injuries or physical sickness, within
the meaning of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended,
During the life of Evie Pierce, the payments shaill be made to.The Brie Pieree Special Needs Trust, If ‘upon the
death of Eric Pierce any guaranteed payments have not yet been made, then the remaining payments shall be
male to the designated beneficiary.
Plaintiff's Rights to Payment:
‘The Plaintiff acknowlodges that the Periodic Payments canuiot be decelerated, deferred, increased or decreased by
the Plaintiff or any Payoe ard no part of the payniénts onlled for lerein nor any assets of the Defendant and/or the
Insurer is to be subject to exenuition or legal process for any obligation in any manner, nor shall the Plaintiffor any
Payee have the power to sell, mortgage, encumber, or anticipate the Periodic Payments, ox aniy part thereof, by
assignment or-otherwise,
Consent to Qualified Assignment! .
‘The Plaintiff acknowledges:and agrees that the Defendant and/or the Insurer may make a” Qualified Assignment"
within the meaning of Seotion. 130(¢), of the Internal Revenue Code of 1986, as amended, of the Defendant's
and/or the Insurer’s liability to make the Periodic Payments set forth herein, Specifically, Lexington Insurance
Company (the "Assignor"), as the lability insurance carrier for the Defendant and as the-payor of the consideration
reoited herein, shall assign its obligation to make thé Perlodic Payments called for above in this Attachment for
Minor's Compromise fo BHG Structured Settlements Ino, (the "Assignec"’), The Assignee's obligation for
payment of the Periodic Payments shall be no greater than that of the Defendant arid/or the Insiirer (whether by
judgment or agreement) immediately preceding the assignment of the Periodic Payinénts obligation, BAG
Structured Settlements, Inc.’s obligation as Assignee will be fully guaranteed by Colunibia Insurance Company and
Berkshire Hathaway Life Instiraice Company of Nebraska, Berkshire Hathaway Life Insurance Company of
Nebraska has réveived high ratings from A, M, Best, (A++) and Standard & Poor's, (AA+), (See attaclied ratings
sheets),
\
Such agslgament shall be accepted by the Plaintiff without right of rejeotion and shall completely release and
discharge the Defendant and/or the Insurer from the. Periodic Payments obligation assigned to the Assignes, The
Plaintiff recognizes that the. Assignee shall be the sole obligor with:respect to the Periodic Paymonts obligation, and
that all other releases with respect to the Periodic Payments obligation that pertain to the Hability of the Defendant
and/or the Insurer shall thereupon become final, tirevocable, absolite, and non-oontingent.
Right to Purchase an Annuity
‘The Defendant and/or the Insurer; itself
or through ifs Assignee, reserves the right to fund the liability to make the
Periodic Payments by purchasing a "qualified fimding asset”, within thé meaning of Section 130(d) of the Code, in
the form of an annuity policy from Borkshiro Hathaway Life Insurance Company of Nebraska, ‘The Assighee shall
be the sole owner of the atnully policy and shall have all rights of ownership, The Assignee may have Berkshire
Hathaway Life Insurance Company of Nebraska mail payments directly to the Payee, The Plaintiff shall be
responsible for maintaining the acouracy of the current mailing address and mortality information for the Payee
with the Assignee.
:
Non-Assignment
None of the Periodic Payments and no tights to or interost In any of the Periodic Payments (all of the foregoing
being,hereinafter colleotively referred to as “Payment Rights”) can be
i Accelerated, deferred, increased or deoreased by any recipient of any of the Periodic Payments;
or
il, Sold, assigned, pledged, hypothecated or otherwise transferred or: encumbered, either directly or
indirectly, unless such sale, assignment, pledge, hypdthecation or other transfer or encumbrances
(any such transaction being hereinafter referred to as a “Tyaisfer”) has been approved in
advance in a “Qualified Order” as defined fh Section 5891(b)(2) of the Code (a “Qualified
Order) and otherwise complies with applicable state law, including without Imitation any
applicable state structured settlement protection statute.
iil. No Plaintiff or Successor Payee shal{ have the power toaffect any Transfer of Payment Rights
except as provided in sub-paragraph (ii) above, and any other purported Transfer of Payment Rights shall be
wholly void, If Payment Rights under this Agreement become the subject of a Transfer approved in accordance
with sub-paragraph (ii) above, the rights of any direct or indirect transferee of such Transfer shall be subject to the
terms of this Agreement and any dofense or claim in recoupment arising hereunder,
Plaintiff's Beneficiary ,
Any payuiehts 16 be made afterthe death of Erle Pierce, pursuant to the terms of this Attachment for Minor’s
Compromise, shall be made to Julié Rogers, as his legal Guardian, or such person or entity as shall be designated in
writing to the Assignee. If'no person or'entity is so designated, or If the person designated is not living at the time of
Eric Pierce’s death, such payments shall be made to the estate of Eric Pierce. No such designation, nor any revocation
thereof, shall be effective unless it is in writing and delivered fo the Assignee. The Designation must bein a form
acceptable to the Assignee before stich payments are made, but in no event shall the request of the payee be
unteasonably withheld or denied,
Following Eric Pievoe’s death, upon written instruction to BHG Structured Settlements, Ino, (“BHGSS”), the
remalning and unpaid payments Shown in this Attachment for Mirior’s Compromise paid by Berkshire Hathaway
Life Insurance Company af Nebraska, shall be commuted in exchange for a timp sum equal to 95% of the present
value of the unpaid payments, as calculated by Berkshire Hathaway Life Insurance Company of Nebraska
("BHLN"), Such payments may constitute a specific portion of or all of the guaranteed payments shown in this
Attachment for Minor's Compromise pald by Berkshire Hathaway Life Insurance Company of Nebraska and are
not in addition to such payments.
Sf firic Pierce has transferred a portion of any specific payment to any other person pursuant to an order ofa
court under applicable state law, the amount so transferred will first be considered to be part of that portion of
said-payment that is not included in this AttachmentJor Minor's Compromise paid by Berkshire Hatha\vay Life
Jnsnranee Company of Nebraska (“Commutation Payments"), Ifthe amount transferred cannot be. fully satisfied
exclusive of the Commutation Payments, any remaining amount necessary to satisfy said transfer shall be deemed
to have been removed,
The presen! value af the payments subj ’ cot to commutation will be computed by BHLN at a discount rate equal to
the yleld of the highest yielding U.S. treasury strip available on the date of death of Erie Pierce, plus 200 basis
points. ‘The appropriate yleld shal] be the annual effective yield as reported in the WallStreet Journal (or an
equivalent souree of such information). Ifthe date of death of the Eric Pierce is not a business day, BHLN will use
the yield reported on the following business day. The Commutation Payment will be determined as of ihe
Commutation Date. The Commutation Date shall be a dale not later than 30 days after: veacipt by BAGSS of
proof af death of Erie Pierce Any remaining portion af payments riot subject to cominutation will hot be
cominuted nor paid in a. lump sum, but will continue to be paid on the specified due date(s) for such payment(s)
and 10 the Benefislary,
Discharge.of Obligation
The ‘obligation of the Assignee to make each Periodic Payment to the Payee designated fo receive such payment
shall automatically be discharged uipon.the mailing ofa valid éheok in the amount of'such payment to the address
of sich Payee named it this Attachment for Minor’s Compfomise or upon completion of an electronic funds
transfer in the amoutit of such payment. Upon notice from the Payes that a payment was not received, the Assignee
will initiate reasonable stop payment action and, upon confirmation that tle finds were not négotisited or deposited,
the Assignee will process a'teplacement payment,
' This process involves the herein referenced Insurer, on behalf of the Defendant, issuing a check payable to BHG
Structured Settlements Ino, and signing the Qualified Assignment atid Release do oument to assign. their obligation
for these payments to the Assignee,
(
ATTACHMENT TO PETITION AND/OR ORDER
YOR MINOR'S COMPROMISE
FOR:
BRIC PIERCE ~ DOB; 04/09/2010
ments
th consideration of the Petition and/or Order for Minor*s Compromise, attached hereto, Lexington Insurance
Company (the “Insurer”), on behalf of County of Stanislaus (the “Défendant”), agrees to settle thelr claim for Bric
Pierce, a minor, by and through his Guardian ad Litem, Renae Jefferson (the “Plaintifi”) according to the schedule
as follows :
Guaranteed Expected
Payout Payout
Periodic Payments made payable to The Erie Pierce Special Needs Trust
(the “Payee”) according to the schedule as follows (the "Periodic Payments”):
» Guaranteed Monthly Paymenis
$3,000 paid monthly, guaranteed for 19 yoars and 3 months,
compounding annually at 3%
Commencing 01/15/2013 with the last guaranteed payment.03/15/2032 $ 919,989 $ 919,989
(See attached Yield Iusiration)
2. Monthly Lifetime Payments
$5,700 paid monthly, for the life of Bric Pierce, guaranteed for 20 years,
compounding annually at 3%
Commmenoing 04/15/2032 with the last guaranteed payment 03/15/2052,
(See attached Yield Iustration) $2,757,922 $11,271,011
The total cost for above Perioiie Paynients is $1,800,000,
All sums set forth herein constituts damages on account of personal physical injurles or physical sickness, within
the meanitg of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended,
During the life of Evie Pierce, the payments shall be made to. The Hric Pierce Special Needs Trust, Uf upon the
death of Eric Pierce any guaranteed payments havé not yet been made, then the remaining ‘payments shall be
made to the designated beneficiary.
Plaintiff's Rights. to Payment:
‘The Plaintiff acknowledges that the Periodic Payments causiot be Acceleriited, deferred, increased or decreased by
the Plaintiff or any Payee and no part of the paysients dalled for'herein nor any assets of the Defendant and/or the
Insurer is to be subject to exenition oy legal process for any obligation in any manner, nor shall-the Plaintiffor any
Payeo have the power to sell, mortgage, onoumber, or anticipate the Periodic Payments, or any part thereof, by
assignment or-otherwise,
Consont to Qualified Assignment’
The Plaintiff acknowledges.and agrees that the Defendant and/or the Insurer may make a "Qualified Assignment"
within the meaning of Seotion 130(c),’of the Internal Reyenuo Coté of 1986, as amended, of the Defondant’s
and/or the Insurer’s Mability to make the Periodic Payments set forth horein, Specifically, Lexington Insurance
Company (the "Assignor"), as the liability insurance carrier for the Defendant and as the payor of the consideration
recited herein; shall assign its obligation to make the Perlodic Payments called-for above in this Attichment fot
Minor’s Compromise to BHG Structured Settlements Inc. (the "Assiguec"). ‘The Assignee's obligation for
payment of the Periodic Payments shall be no greater than that of the Defendant and/or the Insiirét (whether by
Judgment or agreement) immediately preceding the assignment of the Periodic Payments obligation, BHG
Structured Settlements, Inc.’s obligation as Assignee will" be fully guaranteed by Columbia Insurance Company and
Berkshire Hathaway Life Insurance Company of Nebraska, Berkshire Hathaway Life Insurance Company of
Nebraska has récéived high ratings from A, M. Best, (A+) and Standaid & Poor's, (AA), (See attached ratings
sheets).
t
Such agstenment shall be accepted by the Plaintiff without right of rejection and shall completely release and
discharge the Defendant and/or the Insurer from the Periodic Payments obligation assigned to the Assignee, The
Plaintiff recognizes that the. Assignee shall be the sole obligor with respect to the Periodie Paymonts obligation, and
that all other releases with respect to the Periodic Payments obligation that pertain to the lability of the Defendant
and/or the Jnsuror shall theretpon become final, itrovooable, absolitte, and non-contingent.
Right to Purchase an Annuity
‘The Defendant and/or the Insurer; itself or through its Assignee, reserves the right to fund the liability to make the
Periodic Payments by purchasing a "qualified finding asset”, within thé meaning of Section 130(d) of the Code, in
the form of an annuity policy fiom Berkshire Hathaway Life Insurancé Company of Nebraska, ‘The Assignee shall
be the sole owner of the annuity policy and shall have all rights of ownership, The Assignee may have Berkshire
Hathaway Life Insurance Company of Nebraska mail payments directly fo the Payee, The Plaintiff shall be
responsible for maintaining the acouracy of the current mailing address and mortality information for the Payee
with the Assignes.
Nou-Assignment
None of the Periodic Payments and no rights to or interost in any of the Periodic Payments (all of the foregoing
being hereinafter colleotively referred to as “Payment Rights”) can be
i Accelerated, deferred, incteased or déoreased by any recipient of any of thePeriodic. Payments;
or
fi, Sold, assigned, pledged, hypothecated or otherwise transferred or encumbered, either directly or
indirectly, unless such sale, assignment, pledge, hypothecation or other transfer or encumbrance
(any such transaction being hereinafter referred to as a “Traisfer”) has been. approved in
advange in a “Qualified Order” ag define Section 5891(b)@) of the Code (a “Qualified
Order”) and otherwise complies with applical ible state law, including without limitation any
applicable state structured settlement protection statiite,
Sil. No Plaintiff or Successor Payee shall have the power to affect any Transfer of Payment Rights
except as provided in sub-paragraph (ii) above, and any other purported Transfer of Payment Rights shall be
wholly void, If Payment Rights under this Agreeinent become the subject of a Transfer approved in accordance
with sub-paragraph (i) above, the rights of any direct or indirect transferee of such Transfer shall be subject to the
terms of this Agreement and ariy defense or claim_in recoupment arising hereunder,
Plaintiff's Beneficiary :
Any paynients to be made afterthe death of Bric Pierce, pursuant to the terms of this Attachment for Minor’s
Compromise, shall be made to Julie Rogers, as his legal Guardian, or such person or entity as shall be designated in
writing fo the Assignee. Ifno person or entity is so designated, or if the person designated is not living at the tine of
Eric Plerce’s death, such payments shall be made to the estate of Erle Piero’. No such designation, nor any revocation.
thereof, shall be effective urtless it is in wrlting and delivered to the Assignee. The Designation must bein a form
acceptable to the Assignee before stich payments dre made, bit in no event shall the request of the payee be
unreasonably witliheld or denied,
Following Erle Pierce's death, upon written Instrnotion to BHG Structured Settlements, Ino, (“BHGSS”), the
remaining and wnpaid payments Shown in this Attachment for Mirior’s Compromise paldl by Berkshire Hathaway
Life Insw'ance Gompany of Nebraska, shall be commuted in exchange for a tump sum equal to 95% of the present
value of the unpaid payments, as calculated by Berkshire Hathaway Life Insurance Company of Nebraska
(“BHILN"). Such payments may constituie a specific portion of or all of the guaranteed payments shown in this
Attachment for Minor's Compromise paid by Berkshire Hathaway Life Insurance Company of Nebraska and ave
not In addition 10 such payments.
Jf Eric Pierce has transferred a portion of any specific payment to any otlier person pursuant to an order ofa
court under applicable state law, the amount so transfered will first be considered to be part of that portion of
said:payment that is not included in this Attachment Jor Minor's Compromise paid by Berkshive Hathaivay Life
Jnsurane’ Company of Nebraska (“Commitation Payments"), If the amount transferred cannot be fully satisfied
exclusive of the Commutation Payments, any remaining amount necessary lo satisfy said transfer shall be deemed
to have been removed,
(i
The. present value of the payments subject to commutation will be eompiited by BHLN at a discount rate equal
to
the yield of the highest yielding U.S. treasury strip available on the date of death of lirie Pierce, plus 200 basis
points. The.appropriate yleld shall be the annual effective yield as reported in the Wall. Street Journal (or an
equivalent souree of sich information), If the date of déath of the Erie Pierce is riot a business day, BHLN will use
the yield reported on the following business day. The Commutation Payment will be determined as of the
Commutation Date. The Commutation Date shall be a daie not later than $0 days after receipt by BHGSS
of
proof of death of Eric Pierce Any remaining portion of payments riot subject to commitation will not be
commuted nor paid in a limp sum, but will continue to be paid on the specifled due date(s) for such payment(s)
and 10 the Béneficiary,
Discharge
of Obligation
The obligation of the Assignee to make each Periodic Payment to the Payee designated to receive such payment
shall automatically be discharged tipon.the mailing of a-valid check in the amount of such payment to the address
of stich Payee named iit this Attahmentt for Minor’s Compfomisé or upon completion of an electronic funds
transfer in the amouiit of such payment. Upon notice from the Payes © that a payment was not received, the
Assignee
will initiate reasonablé stop payment action and, u pon confirmation that the finds were not negotiated or deposited,
the Assignee will process a'teplacement payment.
———
' This process involves ihe herein referenced Insurer, on behalf
of the Defendant, issuing a check payable to BHG
Structured Settlements Inc. and signing the Qualified Assignment arid Release do curbent to assign: their obligation
for these payments to the Assignee,
Modal Illustration of Benefits
[Ron Ma 08 AB
Guaranteed Expected
Bonelit Description Benefit Benefit IRR
Period Certain Annuit $3,000.00 payable monthly, guaranteed for 19
year(s) and 3 month(s), ‘oe ginning on 01/15/2013 at age 2, Increasing-at a rate
of 3.00% compounded annually, with the last guaranteed payment on
03/15/2032 at age 21. $919,989 919,989
Payment Monthly
3,000
3,090
3,183
3,278
3,377
3,478
3,582
3,690
3,800
10 3,914
i 4,082
12 4,153
13 4,277
14 4,406
1s 4,538
16 A674
7 A814
18 4,959.
19 3,107
20 5,261
Any Jife contingent Expected Benefit or IRR calculations ave illysivated assnming-a normal life expectaney, The anmitant's life ex satanoy may be
shorter thn the expected Ife span of an average person of the same age and gender die to heath and other mortality issues speelf le to the etunieltant,
(
Modal Mlustration of Benefits
[Ror Bork ERC) (ale; Date:
2 sth, 04/ 09/2 _]
Guaranteed Expected
Benolit Description Benefit Benefit 1
Life with Certain Annuity ~ $5,700.00 for life, payable monthly, guaranteed for 20 year(s),
s
beginning on 04/15/2032 at age 22, inoreasin; at a Yate of 3.00% compounded annually,
‘with the last guaranteed payment on 03/15/20. 2 at Hee 41, $1,837,033 $10,351,022
Monthly ent
Kear
Montht
Amour i
5,700 26 11,935
5,871 27 12,293
6,047 28 12,661
6,229 29 13,041
6,415 30 13,432
6,608 31 13,835
74,221010
806 32
33
34
14,250
14,678
15,118
10 , 35 15,572
MW 7,660 36 16,039
12 7,890 37 16,520
13 8127 38 17,016
14 8,371 39 17,526
15 8,622, 40 18,052
16 8,880 al 18,594
17 9,147 42 19,151
18 9,421 43 19,726
19 9,704 44 20,318
20 9,995 45 20,927
21
22
10,295
10,604
46
47
21,55
5
22,202
23 10,922 48 22,868
24 11,249 49 23,554
a5 11,587 50 24,260
Any Iife contingent Expected Benefit or IRR-caleulattons are Wustrated assinting anornsal life expectancy; ‘The annuitant's iife ex) aclanoy may be
shorter (han the expected life
Preview
Electronically Filed 11/25/2020 1:25 PM Superior Court of California Mercy Hall, (SBN 264131) County of Stanislaus HALL LAW FIRM, P.C. Clerk of the Court 354 Pine Street, 7” Floor San Francisco, CA 94104 By: Yukari Williams, Deputy Telephone: (415) 496-9273 Facsimile: (415) 520-6881 $435PD E-Mail: mercy@mercyhall.com Attorneys for Petitioner: FREMONT BANK, Trustee SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF STANISLAUS In re the matter of: Case No.: 445058 10 FOURTH ACCOUNT & REPORT OF TRUSTEE OF THE ERICE PIERCE SPECIAL 11 THE ERIC PIERCE SPECIAL NEEDS TRUST NEEDS TRUST; PETITION TO SETTLE ACCOUNT; TO CONFIRM TRUSTEE FEES; 12 AND TO FIX AND ALLOW ATTORNEY 13 FEES AND COSTS (Probate Code §§1060 & 17200) 14 DATE: March 9, 2021 15 TIME: 8:30 am DEPT: 22 16 17 FREMONT BANK, Trustee of the ERIC PIERCE SPECIAL NEEDS TRUST present its verified 18 Fourth Account and Report; Petition to Settle the Account; to Confirm Trustee Fees; and to Fix and 19 Allow Attorney Fees and Costs; (Probate Code §§ 1060 and 17200). 20 I INTRODUCTION 21 1. Background. The Trust was established by Court Order dated October 5, 2012 under Case 22 #661022. 23 2. Jurisdiction. This Court has jurisdiction over this matter pursuant to Probate Code §17000, 24 et seq. 25 3. Venue. Venue is proper in that this county approved the compromise of disputed claim and is 26 also the county in which the Beneficiary resides. 27 28 1 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 4. Trustee. FREMONT BANK (hereinafter referred to as “Trustee”) is the current Trustee of the Trust. 5. Beneficiary. Beneficiary, ERIC PIERCE (hereinafter referred to as “ERIC” or “BENEFICIARY” is 10 years of age (Date of Birth 4/9/2010). Il. HISTORY 6. Court Orders. The Court has made and approved the following orders related to this Trust matter: a. October 5, 2012. A person injury lawsuit was filed on behalf of ERIC PIERCE (“ERIC”) title: PIERCE v. County of Stanislaus, et al., Stanislaus County Superior court, Case No. 10 661022 (herein the “Lawsuit”). A settlement was reached, and on October 5, 2012, an 11 Order Approving Compromise of Disputed Claim and Establishing Special Needs Trust 12 (“Order”) was entered. The Order approved a net settlement to ERIC $3,838,834.57. 13 Pursuant to the Order, $1,800,000 of the net settlement was used to fund an annuity whose 14 monthly payments were used to fund an annuity whose monthly payments are payable to 15 ERIC PIERCE Special Needs Trust (the “SNT”). Attached hereto as Exhibit A is the 16 annuity payment schedule as approved and authorized in the Order. The annuity 17 compounds annually at 3% and continues monthly payments through March 15, 2032. A 18 second stream of annuity begins payment on April 15, 2032. 19 The balance of ERIC’s net settlement was placed in the ERIC PIERCE QUALIFIED 20 SETTLEMENT FUND (“QSF”) pending completion of legal and financial planning. 21 d. July 22, 2013. The Order on Petition to Bring the Trust Under Continuing Jurisdiction of 22 the Probate Court and to A pprove and A llow A ttorney Fees was entered. The court ordered 23 the Trust to be under continuing court jurisdiction with annual account and report; 24 authorized Fremont Bank to receive reasonable trustee fees on an interim basis, subject to 25 court confirmation; authorized trustee to invest up to $1 million to obtain a loan of 26 $500,000 to purchase a home for ERIC; authorized payment of caregiver services of 27 $25/hour for up to 40 hours per week and found the remaining service provided to ERIC 28 2 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 by his grandmother, JULIE ROGER, to be in lieu of rent; authorized up to $30,000 for purchase of a modified van; approved attorney fees; and set compliances for filing of first account and report. August 14, 2013. Ex Parte Order to Disburse QSF Fund to Special Needs Trust was issued, ordering the remaining settlement funds to be distribute to the SNT. On August 23, 2013, $2,034,974.80 was transferred from the Eric Pierce QSF to the SNT. A small reserve was held in the QSF for payment of taxes and administrative fees. September 26, 2014. Approved and settled first account; confirmed that bond is not required; confirmed payment to Risk Management Services, Inc. for caregiving services; 10 confirmed trustee fees; authorized attomey fees; and set compliances for filing of second 11 account and report. 12 November 9, 2015. Approved and settled second account; confirmed Trustee fees; 13 approved attorney fees; and set compliances for filing of third account. 14 December 8, 2017: Approved and settled Third Account and Report; confirmed trustee 15 fees; approved attorney fees; and set compliance for filing of fourth account. 16 Ill. ACCOUNTING 17 7. Trust. Pursuant to the terms of the Trust, the Trustee shall present the accounting of the assets 18 of the Trust to the Court for settlement and allowance in the manner provided in California Probate 19 Code Section § 1060, et seq. 20 8. Fourth Account & Report of Trustee. The Trustee’s account of the Trust covers the period 21 from July 1, 2017 June 30, 2019. A Summary of Account is attached hereto, and a full, true and 22 correct account setting forth all credits and charges of Petitioner as Trustee is attached as Exhibit B. 23 9. Investments. During the account period, all cash of the Trust estate was invested and 24 maintained in interest bearing accounts or investments authorized by law or the governing instrument, 25 except for an amount of cash that is reasonably necessary for the orderly administration of the estate. 26 10. Capital Changes. No capital changes occurred during the account period. 27 11. Liabilities. The Trust has no liabilities. 28 3 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 12. Transactions. The following transactions as in in the Schedule of Accounts (Exhibit B) may appear as unusual or otherwise require explanation: a. Annuity. The Annuity Income listed on pages 19-20 of Schedule A — Receipts is the income from the $1,800,000 annuity as referred to in Paragraph #6b page 2 of this petition in the amount of $83,485.98. b. Trustee Fees. Fremont Bank and Merrill Lynch fees listed under Administrative Expenses on pages 1 - 4 of Schedule C Disbursements. 1 Fremont Bank Trustee Fees are entries characterized as “Trust Department Fee— ML Shadow” and total $$17,629.81. These fees are within the parameters of the 10 Trustee fee agreement as attached hereto as Exhibit C as approved by Court 11 Order dated July 22, 2013. 12 IL Merrill Lynch Fees are entries characterized as “Investment Advisory Fee” and 13 total $19,119.48. 14 13. Bond. Pursuant to Probate Code §15602 and to the terms of the Trust, a corporate fiduciary 15 acting as Trustee shall not be required to furnish bond. 16 14. No Affiliate Relationships. During the accounting period, neither the Trustee nor its attorney 17 of record had any family or affiliate relationship with any agent hired by Petitioner as Trustee. 18 Iv. TRUSTEE FEES 19 15. Confirm Trustee Fees. Petitioner has managed and administered the beneficiary’s Trust estate 20 frugally and without waste, collecting income and principal, investing the sums available for 21 investment, retaining and disposing of property and investments, and apply or disposing of the income 22 or corpus of the trust estate as required by law, the governing instrument and the order of the Court, 23 as detailed in the schedules attached to this petition. Petitioner’s annual fee for the administration of 24 special needs trusts is 1.25% of the market value on the first million, and .90% on the next million, 25 pursuant to the Fee Schedule approved by Court Order dated July 22, 2013. Fees are recalculated 26 based on the market value at the end of each month. 27 28 4 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 16. Per Court order dated July 22, 2013, permission was granted to FREMONT BANK to pay itself interim Trustee fees which are to be confirmed by the Court at the time of the accountings. Petitioner has received compensation in the amount of $17,630.11. Petitioner seeks an Order of this Court confirming payment of Trustee fees to Petitioner in the amount of $17,630.11. Vv ATTORNEY FEES 17. Petitioner retained the services of HALL LAW FIRM, P.C. on March 26, 2016 in all matters conceming the Trust in which it was necessary to have advice of counsel in the proper administration and conduct of the Trust, including the establishment of the Trust and the preparation of this account and report. 10 18. Attomey’s Fees - HALL LAW FIRM, P.C. Petitioner now seeks an order of this court to 11 authorize and direct the Trustee to pay to HALL LAW FIRM, P.C. the amount of $3,950.00 for 12 attorney’s fees and $316.55 in costs, representing the reasonable value of legal services to the Trustee. 13 A detailed description of those services is set forth in the Declaration of MERCY L. HALL attached 14 hereto as Exhibit D. 15 19. Petitioner now seeks an order of this court to authorize and direct the Trustee to pay HALL 16 LAW FIRM, P.C. compensation for up to 4 hours of additional attorney services at the rate of $450 17 per hour and for up to 4 hours of additional paralegal services at the rate of $200 per hour for paralegal 18 services required to subsequent to filing the current petition. A detailed description of those additional 19 services will be set forth in a supplemental declaration supporting the request for additional fees to 20 be filed in a timely manner prior to the hearing on this matter. 21 20. Pursuant to Court Order dated December 8, 2017, Petitioner also seeks an order of this court 22 to confirm $1,279.00 for fees paid on account in the amount of $1,127.00 for up to two (2) additional 23 hours of attorney service and up to eleven (11) additional hours of paralegal service and $152.00 for 24 filing fees advanced attached hereto as Exhibit E. 25 Mill 26 Mill 27 Mill 28 5 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 VI. NOTICE 21. Notice. There have been no requests for special notice. The persons entitled to notice of hearing on this petition include the Beneficiary and members of the Trust advisory committee. Petitioner is also providing notice to several government department as follows: e ERIC PIERCE, Beneficiary, 3716 Chant Ct. Modesto, CA 95355 e JULIE ROGERS, Grandmother and Trust Protector, 3716 Chant Ct. Modesto, CA 95355 e DEPARTMENT OF HEALTH CARE SERVICES, DIRECTOR’S OFFICE, MS 4720, P.O. Box 997413, Sacramento, CA 95899-7413 DEPARTMENT OF STATE HOSPITALS, DIRECTOR’S OFFICE, 1600 9" Street, 10 Sacramento, CA 95814 11 Mill 12 Mill 13 Mill 14 Mill 15 Mill 16 Mill 17 Mill 18 Mill 19 Mill 20 Mill 21 Mill 22 Mill 23 Mill 24 Mill 25 Mill 26 Mill 27 Mill 28 6 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 1 | WHEREFORE, Petitioner requests, that: 2 1 The Court find that notice of hearing has been given as required by law; 3 2 The Court make an order approving, allowing, and settling the attached account and report of 4 the ERIC PIERCE SPECIAL NEEDS TRUST as filed; The Court confirm payment by and to FREMONT BANK for Trustee fees in the amount of $17630.11 from the ERIC PIERCE SPECIAL NEEDS TRUST, as compensation for services rendered as Trustee for the Trust during the accounting period; The Court authorized and direct the Trustee to pay HALL LAW FIRM, P.C. $3,950.00 for attorneys’ fee and $316.55 in costs rendered to the petitioner during the account period; 10 The Court confirm payment of $1,279.00 to HALL LAW FIRM, P.C. for fees paid on account 11 for up to two (2) additional hours of attorney service and up to eleven (11) additional hours of 12 paralegal service; 13 The Court authorized and direct the Trustee to pay HALL LAW FIRM, P.C. for up to 4 14 additional hours of attorney services at $450/hour and up to 4 additional hours of paralegal 15 service at $200/hour as needed for preparation and appearance at Court and any follow-up 16 necessary upon receipt of order; and 17 For such other relief that the Court deems proper. 18 19 DATED: November 18, 2020 a= Chota fe FREMONT BANK, 20 BY: Stephen Ink PRR 21 22 Its: — A Senior Lead Trust Officer Petitioner and Trustee 23 24 25 DATED: November 18, 2020 = Wath LL, Esq 26 Attorney Petitioner and Trustee 27 28 6 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 VERIFICATION Stephen Ink St declare I am the petitioner in the above-entitled matter and I declare that I have read the foregoing FOURTH ACCOUNT & REPORT OF TRUSTEE OF THE ERIC PIERCE SPECIAL NEEDS TRUST; PETITION TO SETT ACCOUNT; TO CONFIRM CAREGIVER FEES; TO CONFIRM TRUSTEE FEES; AND TO FIX AND ALLOW ATTORNEY FEES & COSTS, and the requests designated therein, and know its contents. The account, which includes the report and the supporting schedules, is true of my own knowledge, except for the matters stated therein on my information and belief, and as to those matters, I believe them to be true. The account contains a full statement of all charges 10 against me and all credits to which I am entitled in the estate during the account period. 11 I declare under penalty of perjury under the laws of the State of California that the foregoing 12 is true and correct. Executed in the City of Fremont California. 13 Chex MOT fof 14 DATED: aa 11/18/2020 LE BY ~-- fA FREMONT BANK, 15 16 BY Stephen — SUSE SE Ink 17 Its Senior ae Re Lead Trust ee Officer Se Petitioner and Trustee 18 19 20 21 22 23 24 25 26 27 28 7 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 10 11 12 EXHIBIT “A” 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 PETITION TO APPROVE FOURTH ACCOUNT AND REPORT OF TRUSTEE ERIC PIERCE SPECIAL NEEDS TRUST CASE No. #445058 { ATTACHMENT TO PETITION AND/OR ORDER ¥OR MINOR'S COMPROMISE FOR: ERIC PIERCE ~ DOB; 04/09/2010 ment: In consideration of the Petition and/or Order for Minor’s Compromise, attached hereto, Lexington Insurance Company (the “Insurer”), on behalf of County of Stanislaus (the “Défendant”), agrees to settle thely claim for Eric Pierce, a minor, by and through his Guardian ad Litem, Renae Jefferson (the “Plaintiff”) according to the schedule as follows : Guaranteed Expected Payout Payout Periodic Payments made payable to The ric Pierce Special Needs Trust (the “Payee”) according to the schedule as follows (the "Periodic Payments"): 1. Guarantee lonthly Payment; $3,000 paid monthly, guaranteed for 19 years and 3 months, compounding annually at 3% Conmnencing 01/15/2013 with the last guaranteed payment.03/15/2032 $ 919,989 $ 919,989 (See attached Yield INustraiion) 2. Monthly Lifetime Payments $5,700 paid monthly, for the life of Bric Pieree, guaranteed for 20 years, compounding annually at 3% Commencing 04/15/2032 with the last guaranteed payment 03/15/2052, (See attached Yield INustration) $2,757,922 SUL271 soit The total cost for above Perioiie Paynients is $1,800,000. All sums set forth herein constituts damages on account of personal physioal injuries or physical sickness, within the meaning of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended, During the life of Evie Pierce, the payments shaill be made to.The Brie Pieree Special Needs Trust, If ‘upon the death of Eric Pierce any guaranteed payments have not yet been made, then the remaining payments shall be male to the designated beneficiary. Plaintiff's Rights to Payment: ‘The Plaintiff acknowlodges that the Periodic Payments canuiot be decelerated, deferred, increased or decreased by the Plaintiff or any Payoe ard no part of the payniénts onlled for lerein nor any assets of the Defendant and/or the Insurer is to be subject to exenuition or legal process for any obligation in any manner, nor shall the Plaintiffor any Payee have the power to sell, mortgage, encumber, or anticipate the Periodic Payments, ox aniy part thereof, by assignment or-otherwise, Consent to Qualified Assignment! . ‘The Plaintiff acknowledges:and agrees that the Defendant and/or the Insurer may make a” Qualified Assignment" within the meaning of Seotion. 130(¢), of the Internal Revenue Code of 1986, as amended, of the Defendant's and/or the Insurer’s liability to make the Periodic Payments set forth herein, Specifically, Lexington Insurance Company (the "Assignor"), as the lability insurance carrier for the Defendant and as the-payor of the consideration reoited herein, shall assign its obligation to make thé Perlodic Payments called for above in this Attachment for Minor's Compromise fo BHG Structured Settlements Ino, (the "Assignec"’), The Assignee's obligation for payment of the Periodic Payments shall be no greater than that of the Defendant arid/or the Insiirer (whether by judgment or agreement) immediately preceding the assignment of the Periodic Payinénts obligation, BAG Structured Settlements, Inc.’s obligation as Assignee will be fully guaranteed by Colunibia Insurance Company and Berkshire Hathaway Life Instiraice Company of Nebraska, Berkshire Hathaway Life Insurance Company of Nebraska has réveived high ratings from A, M, Best, (A++) and Standard & Poor's, (AA+), (See attaclied ratings sheets), \ Such agslgament shall be accepted by the Plaintiff without right of rejeotion and shall completely release and discharge the Defendant and/or the Insurer from the. Periodic Payments obligation assigned to the Assignes, The Plaintiff recognizes that the. Assignee shall be the sole obligor with:respect to the Periodic Paymonts obligation, and that all other releases with respect to the Periodic Payments obligation that pertain to the Hability of the Defendant and/or the Insurer shall thereupon become final, tirevocable, absolite, and non-oontingent. Right to Purchase an Annuity ‘The Defendant and/or the Insurer; itself or through ifs Assignee, reserves the right to fund the liability to make the Periodic Payments by purchasing a "qualified fimding asset”, within thé meaning of Section 130(d) of the Code, in the form of an annuity policy from Borkshiro Hathaway Life Insurance Company of Nebraska, ‘The Assighee shall be the sole owner of the atnully policy and shall have all rights of ownership, The Assignee may have Berkshire Hathaway Life Insurance Company of Nebraska mail payments directly to the Payee, The Plaintiff shall be responsible for maintaining the acouracy of the current mailing address and mortality information for the Payee with the Assignee. : Non-Assignment None of the Periodic Payments and no tights to or interost In any of the Periodic Payments (all of the foregoing being,hereinafter colleotively referred to as “Payment Rights”) can be i Accelerated, deferred, increased or deoreased by any recipient of any of the Periodic Payments; or il, Sold, assigned, pledged, hypothecated or otherwise transferred or: encumbered, either directly or indirectly, unless such sale, assignment, pledge, hypdthecation or other transfer or encumbrances (any such transaction being hereinafter referred to as a “Tyaisfer”) has been approved in advance in a “Qualified Order” as defined fh Section 5891(b)(2) of the Code (a “Qualified Order) and otherwise complies with applicable state law, including without Imitation any applicable state structured settlement protection statute. iil. No Plaintiff or Successor Payee shal{ have the power toaffect any Transfer of Payment Rights except as provided in sub-paragraph (ii) above, and any other purported Transfer of Payment Rights shall be wholly void, If Payment Rights under this Agreement become the subject of a Transfer approved in accordance with sub-paragraph (ii) above, the rights of any direct or indirect transferee of such Transfer shall be subject to the terms of this Agreement and any dofense or claim in recoupment arising hereunder, Plaintiff's Beneficiary , Any payuiehts 16 be made afterthe death of Erle Pierce, pursuant to the terms of this Attachment for Minor’s Compromise, shall be made to Julié Rogers, as his legal Guardian, or such person or entity as shall be designated in writing to the Assignee. If'no person or'entity is so designated, or If the person designated is not living at the time of Eric Pierce’s death, such payments shall be made to the estate of Eric Pierce. No such designation, nor any revocation thereof, shall be effective unless it is in writing and delivered fo the Assignee. The Designation must bein a form acceptable to the Assignee before stich payments are made, but in no event shall the request of the payee be unteasonably withheld or denied, Following Eric Pievoe’s death, upon written instruction to BHG Structured Settlements, Ino, (“BHGSS”), the remalning and unpaid payments Shown in this Attachment for Mirior’s Compromise paid by Berkshire Hathaway Life Insurance Company af Nebraska, shall be commuted in exchange for a timp sum equal to 95% of the present value of the unpaid payments, as calculated by Berkshire Hathaway Life Insurance Company of Nebraska ("BHLN"), Such payments may constitute a specific portion of or all of the guaranteed payments shown in this Attachment for Minor's Compromise pald by Berkshire Hathaway Life Insurance Company of Nebraska and are not in addition to such payments. Sf firic Pierce has transferred a portion of any specific payment to any other person pursuant to an order ofa court under applicable state law, the amount so transferred will first be considered to be part of that portion of said-payment that is not included in this AttachmentJor Minor's Compromise paid by Berkshire Hatha\vay Life Jnsnranee Company of Nebraska (“Commutation Payments"), Ifthe amount transferred cannot be. fully satisfied exclusive of the Commutation Payments, any remaining amount necessary to satisfy said transfer shall be deemed to have been removed, The presen! value af the payments subj ’ cot to commutation will be computed by BHLN at a discount rate equal to the yleld of the highest yielding U.S. treasury strip available on the date of death of Erie Pierce, plus 200 basis points. ‘The appropriate yleld shal] be the annual effective yield as reported in the WallStreet Journal (or an equivalent souree of such information). Ifthe date of death of the Eric Pierce is not a business day, BHLN will use the yield reported on the following business day. The Commutation Payment will be determined as of ihe Commutation Date. The Commutation Date shall be a dale not later than 30 days after: veacipt by BAGSS of proof af death of Erie Pierce Any remaining portion af payments riot subject to cominutation will hot be cominuted nor paid in a. lump sum, but will continue to be paid on the specified due date(s) for such payment(s) and 10 the Benefislary, Discharge.of Obligation The ‘obligation of the Assignee to make each Periodic Payment to the Payee designated fo receive such payment shall automatically be discharged uipon.the mailing ofa valid éheok in the amount of'such payment to the address of sich Payee named it this Attachment for Minor’s Compfomise or upon completion of an electronic funds transfer in the amoutit of such payment. Upon notice from the Payes that a payment was not received, the Assignee will initiate reasonable stop payment action and, upon confirmation that tle finds were not négotisited or deposited, the Assignee will process a'teplacement payment, ' This process involves the herein referenced Insurer, on behalf of the Defendant, issuing a check payable to BHG Structured Settlements Ino, and signing the Qualified Assignment atid Release do oument to assign. their obligation for these payments to the Assignee, ( ATTACHMENT TO PETITION AND/OR ORDER YOR MINOR'S COMPROMISE FOR: BRIC PIERCE ~ DOB; 04/09/2010 ments th consideration of the Petition and/or Order for Minor*s Compromise, attached hereto, Lexington Insurance Company (the “Insurer”), on behalf of County of Stanislaus (the “Défendant”), agrees to settle thelr claim for Bric Pierce, a minor, by and through his Guardian ad Litem, Renae Jefferson (the “Plaintifi”) according to the schedule as follows : Guaranteed Expected Payout Payout Periodic Payments made payable to The Erie Pierce Special Needs Trust (the “Payee”) according to the schedule as follows (the "Periodic Payments”): » Guaranteed Monthly Paymenis $3,000 paid monthly, guaranteed for 19 yoars and 3 months, compounding annually at 3% Commencing 01/15/2013 with the last guaranteed payment.03/15/2032 $ 919,989 $ 919,989 (See attached Yield Iusiration) 2. Monthly Lifetime Payments $5,700 paid monthly, for the life of Bric Pierce, guaranteed for 20 years, compounding annually at 3% Commmenoing 04/15/2032 with the last guaranteed payment 03/15/2052, (See attached Yield Iustration) $2,757,922 $11,271,011 The total cost for above Perioiie Paynients is $1,800,000, All sums set forth herein constituts damages on account of personal physical injurles or physical sickness, within the meanitg of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended, During the life of Evie Pierce, the payments shall be made to. The Hric Pierce Special Needs Trust, Uf upon the death of Eric Pierce any guaranteed payments havé not yet been made, then the remaining ‘payments shall be made to the designated beneficiary. Plaintiff's Rights. to Payment: ‘The Plaintiff acknowledges that the Periodic Payments causiot be Acceleriited, deferred, increased or decreased by the Plaintiff or any Payee and no part of the paysients dalled for'herein nor any assets of the Defendant and/or the Insurer is to be subject to exenition oy legal process for any obligation in any manner, nor shall-the Plaintiffor any Payeo have the power to sell, mortgage, onoumber, or anticipate the Periodic Payments, or any part thereof, by assignment or-otherwise, Consont to Qualified Assignment’ The Plaintiff acknowledges.and agrees that the Defendant and/or the Insurer may make a "Qualified Assignment" within the meaning of Seotion 130(c),’of the Internal Reyenuo Coté of 1986, as amended, of the Defondant’s and/or the Insurer’s Mability to make the Periodic Payments set forth horein, Specifically, Lexington Insurance Company (the "Assignor"), as the liability insurance carrier for the Defendant and as the payor of the consideration recited herein; shall assign its obligation to make the Perlodic Payments called-for above in this Attichment fot Minor’s Compromise to BHG Structured Settlements Inc. (the "Assiguec"). ‘The Assignee's obligation for payment of the Periodic Payments shall be no greater than that of the Defendant and/or the Insiirét (whether by Judgment or agreement) immediately preceding the assignment of the Periodic Payments obligation, BHG Structured Settlements, Inc.’s obligation as Assignee will" be fully guaranteed by Columbia Insurance Company and Berkshire Hathaway Life Insurance Company of Nebraska, Berkshire Hathaway Life Insurance Company of Nebraska has récéived high ratings from A, M. Best, (A+) and Standaid & Poor's, (AA), (See attached ratings sheets). t Such agstenment shall be accepted by the Plaintiff without right of rejection and shall completely release and discharge the Defendant and/or the Insurer from the Periodic Payments obligation assigned to the Assignee, The Plaintiff recognizes that the. Assignee shall be the sole obligor with respect to the Periodie Paymonts obligation, and that all other releases with respect to the Periodic Payments obligation that pertain to the lability of the Defendant and/or the Jnsuror shall theretpon become final, itrovooable, absolitte, and non-contingent. Right to Purchase an Annuity ‘The Defendant and/or the Insurer; itself or through its Assignee, reserves the right to fund the liability to make the Periodic Payments by purchasing a "qualified finding asset”, within thé meaning of Section 130(d) of the Code, in the form of an annuity policy fiom Berkshire Hathaway Life Insurancé Company of Nebraska, ‘The Assignee shall be the sole owner of the annuity policy and shall have all rights of ownership, The Assignee may have Berkshire Hathaway Life Insurance Company of Nebraska mail payments directly fo the Payee, The Plaintiff shall be responsible for maintaining the acouracy of the current mailing address and mortality information for the Payee with the Assignes. Nou-Assignment None of the Periodic Payments and no rights to or interost in any of the Periodic Payments (all of the foregoing being hereinafter colleotively referred to as “Payment Rights”) can be i Accelerated, deferred, incteased or déoreased by any recipient of any of thePeriodic. Payments; or fi, Sold, assigned, pledged, hypothecated or otherwise transferred or encumbered, either directly or indirectly, unless such sale, assignment, pledge, hypothecation or other transfer or encumbrance (any such transaction being hereinafter referred to as a “Traisfer”) has been. approved in advange in a “Qualified Order” ag define Section 5891(b)@) of the Code (a “Qualified Order”) and otherwise complies with applical ible state law, including without limitation any applicable state structured settlement protection statiite, Sil. No Plaintiff or Successor Payee shall have the power to affect any Transfer of Payment Rights except as provided in sub-paragraph (ii) above, and any other purported Transfer of Payment Rights shall be wholly void, If Payment Rights under this Agreeinent become the subject of a Transfer approved in accordance with sub-paragraph (i) above, the rights of any direct or indirect transferee of such Transfer shall be subject to the terms of this Agreement and ariy defense or claim_in recoupment arising hereunder, Plaintiff's Beneficiary : Any paynients to be made afterthe death of Bric Pierce, pursuant to the terms of this Attachment for Minor’s Compromise, shall be made to Julie Rogers, as his legal Guardian, or such person or entity as shall be designated in writing fo the Assignee. Ifno person or entity is so designated, or if the person designated is not living at the tine of Eric Plerce’s death, such payments shall be made to the estate of Erle Piero’. No such designation, nor any revocation. thereof, shall be effective urtless it is in wrlting and delivered to the Assignee. The Designation must bein a form acceptable to the Assignee before stich payments dre made, bit in no event shall the request of the payee be unreasonably witliheld or denied, Following Erle Pierce's death, upon written Instrnotion to BHG Structured Settlements, Ino, (“BHGSS”), the remaining and wnpaid payments Shown in this Attachment for Mirior’s Compromise paldl by Berkshire Hathaway Life Insw'ance Gompany of Nebraska, shall be commuted in exchange for a tump sum equal to 95% of the present value of the unpaid payments, as calculated by Berkshire Hathaway Life Insurance Company of Nebraska (“BHILN"). Such payments may constituie a specific portion of or all of the guaranteed payments shown in this Attachment for Minor's Compromise paid by Berkshire Hathaway Life Insurance Company of Nebraska and ave not In addition 10 such payments. Jf Eric Pierce has transferred a portion of any specific payment to any otlier person pursuant to an order ofa court under applicable state law, the amount so transfered will first be considered to be part of that portion of said:payment that is not included in this Attachment Jor Minor's Compromise paid by Berkshive Hathaivay Life Jnsurane’ Company of Nebraska (“Commitation Payments"), If the amount transferred cannot be fully satisfied exclusive of the Commutation Payments, any remaining amount necessary lo satisfy said transfer shall be deemed to have been removed, (i The. present value of the payments subject to commutation will be eompiited by BHLN at a discount rate equal to the yield of the highest yielding U.S. treasury strip available on the date of death of lirie Pierce, plus 200 basis points. The.appropriate yleld shall be the annual effective yield as reported in the Wall. Street Journal (or an equivalent souree of sich information), If the date of déath of the Erie Pierce is riot a business day, BHLN will use the yield reported on the following business day. The Commutation Payment will be determined as of the Commutation Date. The Commutation Date shall be a daie not later than $0 days after receipt by BHGSS of proof of death of Eric Pierce Any remaining portion of payments riot subject to commitation will not be commuted nor paid in a limp sum, but will continue to be paid on the specifled due date(s) for such payment(s) and 10 the Béneficiary, Discharge of Obligation The obligation of the Assignee to make each Periodic Payment to the Payee designated to receive such payment shall automatically be discharged tipon.the mailing of a-valid check in the amount of such payment to the address of stich Payee named iit this Attahmentt for Minor’s Compfomisé or upon completion of an electronic funds transfer in the amouiit of such payment. Upon notice from the Payes © that a payment was not received, the Assignee will initiate reasonablé stop payment action and, u pon confirmation that the finds were not negotiated or deposited, the Assignee will process a'teplacement payment. ——— ' This process involves ihe herein referenced Insurer, on behalf of the Defendant, issuing a check payable to BHG Structured Settlements Inc. and signing the Qualified Assignment arid Release do curbent to assign: their obligation for these payments to the Assignee, Modal Illustration of Benefits [Ron Ma 08 AB Guaranteed Expected Bonelit Description Benefit Benefit IRR Period Certain Annuit $3,000.00 payable monthly, guaranteed for 19 year(s) and 3 month(s), ‘oe ginning on 01/15/2013 at age 2, Increasing-at a rate of 3.00% compounded annually, with the last guaranteed payment on 03/15/2032 at age 21. $919,989 919,989 Payment Monthly 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 10 3,914 i 4,082 12 4,153 13 4,277 14 4,406 1s 4,538 16 A674 7 A814 18 4,959. 19 3,107 20 5,261 Any Jife contingent Expected Benefit or IRR calculations ave illysivated assnming-a normal life expectaney, The anmitant's life ex satanoy may be shorter thn the expected Ife span of an average person of the same age and gender die to heath and other mortality issues speelf le to the etunieltant, ( Modal Mlustration of Benefits [Ror Bork ERC) (ale; Date: 2 sth, 04/ 09/2 _] Guaranteed Expected Benolit Description Benefit Benefit 1 Life with Certain Annuity ~ $5,700.00 for life, payable monthly, guaranteed for 20 year(s), s beginning on 04/15/2032 at age 22, inoreasin; at a Yate of 3.00% compounded annually, ‘with the last guaranteed payment on 03/15/20. 2 at Hee 41, $1,837,033 $10,351,022 Monthly ent Kear Montht Amour i 5,700 26 11,935 5,871 27 12,293 6,047 28 12,661 6,229 29 13,041 6,415 30 13,432 6,608 31 13,835 74,221010 806 32 33 34 14,250 14,678 15,118 10 , 35 15,572 MW 7,660 36 16,039 12 7,890 37 16,520 13 8127 38 17,016 14 8,371 39 17,526 15 8,622, 40 18,052 16 8,880 al 18,594 17 9,147 42 19,151 18 9,421 43 19,726 19 9,704 44 20,318 20 9,995 45 20,927 21 22 10,295 10,604 46 47 21,55 5 22,202 23 10,922 48 22,868 24 11,249 49 23,554 a5 11,587 50 24,260 Any Iife contingent Expected Benefit or IRR-caleulattons are Wustrated assinting anornsal life expectancy; ‘The annuitant's iife ex) aclanoy may be shorter (han the expected life