Citation: 16 Cal. 4th 1124 (1997).
One-Sentence Takeaway: Unless the trust instrument provides otherwise, a successor trustee of a trust assumes the power to assert the attorney-client privilege as to confidential communications between an attorney and a predecessor trustee on the subject of trust administration, so long as the predecessor was acting in the official capacity of trustee rather than in personal capacity.
Summary: A 1997 California Supreme Court opinion in which the Court held that a successor trustee assumes ownership of the attorney-client privilege over documents “reflecting confidential communications between the predecessor and an attorney on matters of trust administration.” (Id. at p. 1127 (emphasis added).) The Court explained:
“It is likely that . . . in performing their day-to-day duties, trustees regularly have confidential communications with their attorneys about trust business (e.g., potential acquisitions and dispositions of property, lawsuits involving trust property). At any given time, therefore, many privileged communications that involve pending trust transactions are in existence. To allow for effective continuous administration of a trust, the right of access to these communications and the privilege to prevent their disclosure must belong to the person presently acing as trustee, because that person has the duty to conduct all pending trust business. Therefore, for a trust to continue to operate smoothly when a change of trustee occurs, the power to assert the attorney-client privilege must pass from the predecessor trustee to the successor.” (Id. at 1133.)
Notwithstanding its findings in favor of the successor trustee, the Moeller court specifically limited the scope of its ruling to only privileged communications that related to matters of trust administration: “Most importantly, the successor trustee inherits the power to assert the privilege only as to those confidential communications that occurred when the predecessor, in its fiduciary capacity, sought the attorney’s advice for guidance in administering the trust.” (Id. at p. 1134 (emphasis in original).) The Court further explained:
“[T]he instant case does not appear to be one in which [the predecessor trustee’s] fiduciary and personal capacities overlap. The papers [the successor trustee] demands from [the predecessor trustee] (e.g., agreements, billings, invoices) all seem to involve only matters pertaining to [the predecessor trustee’s] use of professional services in carrying out its administrative duties in managing the Moeller trust – specifically, handling the cleanup of the Los Angeles [trust] property and its related litigation. Nothing in the record suggests [the predecessor trustee] obtained any of those services in defense of actual or anticipated charges against it of misconduct by the beneficiaries of the Moeller trust.” (Id. at p.1135.)