Heathman

INTRODUCTION

Appellants Laura Lizer and Joel Smith are co-trustees of the Dean Martin Family Trust (the Trust). Respondent Gina Martin Heathman is one of the Trust’s current income beneficiaries. Lizer and Smith (the Trustees) appeal from a trial court order determining that Heathman’s proposed petition to modify the trustee compensation provision of the Trust would not trigger the Trust’s no contest clause.1 The Trustees are currently paid 1 percent of the average net value of the Trust’s principal, charged equally to principal and income on an annual basis. Due to significant increases in the value of certain Trust assets, the Trustees’ compensation under the current provision has mushroomed from approximately $133,867 in 1995, when Martin settled the Trust, to $811,903.44 in 2013. Heathman asserts this increase has substantially reduced the net income distributable to the nine income beneficiaries, while also consuming a considerable portion of the principal that should be preserved for future beneficiaries. Heathman’s proposed petition seeks to modify the Trust, with the consent of all current beneficiaries, to limit the Trustees’ compensation to no more than the market rate…