An 85-year-old man who bobs between residences in Australia and the State of Washington is not an “elder” for purposes of California’s Elder Abuse Law, the Court of Appeal for this district has ruled, rejecting his bid for a new trial in an action against Wells Fargo Bank for allegedly causing a $13 million loss through mismanagement of his trust. Randolph Galt is 85 years old and resides in Australia and/or Washington State. He was one of the income beneficiaries of a California generation-skipping trust established by his grandfather. Wells Fargo became trustee of the Trust, including its various sub-trusts, in 1990. At that time, each sub-trust had its own family member manager. Galt was the life income beneficiary and manager of one such sub-trust. Galt brought the action for financial elder abuse, breach of fiduciary duty, breach of written contract and breach of the covenant of good faith and fair dealing. He alleged that respondents intentionally refused to follow the June 2007 instruction to allow his delegate to make all investment decisions for his sub-trust and that he consequently suffered substantial damage.

The opinion, by Judge Steven Perren of the California Court of Appeals, affirmed a judgment by the Santa Barbara Superior Court, which held that Galt lacked standing to pursue his action for financial elder abuse because of his non-residency. This decision was reported in The Metropolitan News, in “Man, 85, Isn’t an ‘Elder,’ Under Statute, C.A. Rules.”

California Health and Welfare Code §15610.27 defines an “elder” as “any person residing in this state, 65 years of age or older.” Further, the Court of Appeals said in its opinion, that “[b]y his own admission, Galt does not reside in this state; consequently, under the plain meaning of the statute, he is not an elder.”

Judge Perren went on to explain that “Galt argue[d] the definition of ‘elder’ must be liberally construed to promote the Elder Abuse Act’s salient goals, but the only way to reach the result he advocates is to ignore the unequivocal statutory requirement that, to qualify as an elder, the person must ‘reside in this state.’…This would be no different than ignoring the requirement that the person be at least 65 years of age. Just as we cannot broadly interpret the statute to encompass persons under age 65, we cannot interpret it to include non-residents.”

Although the trust is situated in California, that alone was an insufficient basis for permitting the action. Perren explained “[t]hat the Trust has ties to California is irrelevant. Galt cites no statutory or decisional authority suggesting his position as a Trust beneficiary or manager grants him residency status.”

Mismanaging a trust is a serious contention, and no one wants to lose all kinds of money and end up where Mr. Galt was. Speak with an experienced estate planning attorney about trusts and make sure that yours is done correctly.

For more information about estate planning, please visit my estate planning website.

Reference: Metropolitan News-Enterprise (September 24, 2015) “Man, 85, Isn’t an ‘Elder,’ Under Statute, C.A. Rules”