Paluda

BACKGROUND

Bob and Evangeline Hamblen established a revocable family trust in 1982. They named as beneficiaries their three children, Paluda, Peterson and a now-deceased son. After Evangeline’s death in 1996, Hamblen divided the trust into subtrusts, including Trust B, which is at issue.

1 Trust A was designed to hold the surviving spouse’s interest in the trust (Hamblen’s, as it turned out); Trust B was to hold an amount equivalent to the maximum federal estate

2 In November 2005, Peterson petitioned the trial court to remove Hamblen as trustee, to suspend his powers, to appoint a successor trustee, and for an accounting. The petition alleged that Hamblen had transferred assets valued at more than one million dollars from Trust B to a woman named Wagma Safi and had given Safi a joint tenancy interest in his home. In May 2006, Hamblen and the trust beneficiaries entered into a stipulated judgment. The stipulated judgment defined Trust B to include, among other things, a “promissory note . . . secured by a first deed of trust as to an undivided one-half interest [in]” the house he shared with Safi. By stipulation, the parties also agreed that Hamblen had resigned as trustee and…