Stuart

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background Frank, Pam Horton, and Cheryl Sarchet are the adult children of decedent Franklin Gerald Stuart. Franklin and Carolyn Kay Stuart were married in June 1977. Pam, Frank, and Cheryl are Carolyn’s step-children. In September 1996, Franklin and Carolyn, acting as settlors and co- trustees, created a marital trust named the Franklin Gerald and Carolyn Kay Stuart Family Trust (Stuart Trust). Franklin and Carolyn were to act as initial co-trustees, with the survivor continuing as the sole trustee after the first spouse’s death. Frank, Pamela, and Cheryl were named as successor beneficiaries and first successor trustees. One of the assets held by the Stuart Trust was a four-unit apartment building located in San Leandro (the Property). At the death of the first spouse, the Stuart Trust directed that standard decedent and survivor (“A-B”) trusts would be created if needed for tax purposes (i.e., if the trust estate exceeded the federal estate tax exemption).2 The relevant Stuart Trust provision stated that upon the death of either Franklin or Carolyn, an irrevocable decedent’s trust would be funded “with the lesser of one half…