Carpy v. Alfaro

Full title: JOHN CARPY, Petitioner and Appellant, v. KEVIN ALFARO, as Trustee, etc.…

Court: California Court of Appeals, First District, Fifth Division

Date published: Jun 15, 2010

A123716, A123719 (Cal. Ct. App. Jun. 15, 2010)

Opinion

JOHN CARPY, Petitioner and Appellant, v. KEVIN ALFARO, as Trustee, etc., Respondent. JOHN A. CARPY, Petitioner and Appellant, v. CHARLES G. CARPY et al., as Trustees, etc., Respondents. A123716, A123719 California Court of Appeal, First District, Fifth Division June 15, 2010

NOT TO BE PUBLISHED

Napa County Super. Ct. Nos. 2638094, 2638096

Bruiniers, J.

These consolidated appeals involve two trusts established by Charles A. and Ann Carpy (Charles and Ann), the parents of appellant John Carpy (John), ¹ for the benefit of themselves and their five children.² Following Charles’s death in August 1996, one of the trusts was divided into one revocable and three irrevocable trusts, and John (along with the other four children) became a contingent beneficiary of the irrevocable trusts. John is also both a trustor and a beneficiary of the Carpy Winery Trust as it was restated following Charles’s death.

1 Because many of the parties are related and share a last name, we refer to them by first names for purposes of clarity. We intend no disrespect.

2 There are four children of the marriage of Charles and Ann, and one child who is the issue of a prior marriage of Ann.

John suffers from chronic mental illness and claims that he has been ostracized by his family.³ John claims that he informally requested information about the assets and administration of the trusts after his father died, but was repeatedly rebuffed. In 2007, he filed the underlying petitions for accountings of the trusts.

3 During the pendency of the underlying proceedings, John apparently filed an action for support as an indigent adult child in family court.

In response to John’s petitions, the trustees of each trust filed accountings, to which John objected. John sought formal discovery of extensive documentation concerning the assets of all of the trusts, including documents concerning management of businesses in which the trusts held or had held interests. The trustees objected to the breadth of the requests. The trial court acknowledged John’s right to discovery related to his objections, but agreed that his requests were overbroad and directed him to file more specific objections to the accountings, and to narrowly tailor his discovery demands to those objections. The court ultimately denied his motion to compel discovery and approved the accountings. We conclude that the trial court applied an unduly narrow interpretation of the scope of information that a beneficiary is entitled to receive under the Probate Code. Further, the court failed to recognize and exercise the discretion provided to it under the Probate Code to determine what information was reasonably necessary for protection of the beneficiary’s interests in the trusts. Accordingly, we reverse and remand for the court to consider those issues.

I. Background

Because of the complex nature of the estate plan implemented by the trusts in issue here, and due to the contentious family dynamic evidenced in the disputes relating to the trusts, it is necessary to review the history of this matter in some detail.

The Carpy Trust and Subtrusts

In 1989, Charles and Ann created The Carpy Trust, which was revocable during the joint lifetimes of trustors (and original trustees) Charles and Ann. The original trust corpus consisted of both community property and separate property of the trustors which was listed in a “Schedule A, ” but which is not included in the record.

Under the terms of the trust instrument, upon the death of the first trustor the surviving trustor would become sole trustee and the trust estate would be divided into three separate trusts (referred to by the parties as “subtrusts”): a revocable Survivor’s Trust, an irrevocable Marital Qualified Terminable Interest Property Trust (Marital QTIP Trust), and an irrevocable Exemption Trust. The revocable Survivor’s Trust would consist of the surviving trustor’s separate property in the trust estate, his or her community property interest in the trust assets, the trustors’ residence, and all personal and household belongings. The Exemption Trust would consist of “a pecuniary amount equal to the maximum sum that can be allocated to a trust that does not qualify for the federal estate tax marital deduction to any extent, without producing any federal estate tax, after taking into account: [¶] [a]ll available deductions[, ]” allowable credit, the net value of all other property in the deceased trustor’s estate. The Marital QTIP Trust would consist of the remainder of the trust estate. In the event that the trustors still owned the residence at 2401 Main Street, St. Helena (2401 Main Street) [an asset of the revocable Survivor’s Trust], the Carpy children (as a group) had a right of first refusal with respect to any sale of the residence. During the surviving trustor’s lifetime, all net income from the irrevocable subtrusts would be paid to the surviving trustor, with the ability to invade the principal of the subtrusts for his/her benefit as necessary. In addition, the trustee of the Exemption Trust had the discretionary power to invade principal “for the health, maintenance, support and education of the issue of the Trustors.”

Upon the surviving trustor’s death, the remainder of the Survivor Trust would become irrevocable and would be distributed “to such one or more persons or entities... and on such terms and conditions, either outright or in trust, as the surviving spouse shall appoint by a will” or, in the absence of such appointment, to the Exemption Trust. The remainder of the Marital QTIP Trust was subject to a special power of appointment and would be distributed to “one or more of the group consisting of Trustors’ issue and on such terms and conditions, either outright or in trust, as the surviving spouse shall appoint by a will” or, in the absence of such an appointment, to the Exemption Trust. The remainder of the Exemption Trust was also subject to a special power of appointment and would be distributed to “one or more of the group consisting of the deceased spouse’s issue on such terms and conditions, either outright or in trust, as the surviving spouse shall appoint by a will” or, in the absence of such an appointment, in “as many equal shares as there are children of the Trustors then living and children of the Trustors then deceased leaving issue then living.”

In summary, under the terms of The Carpy Trust, Ann, as the surviving spouse/trustor, receives regular distributions of all income from each of the subtrusts during her lifetime, can invade principal (in the discretion of the trustee), and has a special power of appointment over the remainder of each of the subtrusts among one or more of the children or their issue. Additionally, the trustee (Ann or her successor) has the discretionary power, during Ann’s lifetime, to invade the principal of the Exemption Trust for the “health, maintenance, support and education” of any of the children. The Carpy children will share in their parent’s estate, if at all, either by: a) discretionary payments from the Exemption Trust for “health, maintenance, support and education” during Ann’s lifetime; b) discretionary testamentary disposition through Ann’s will; or c) per stirpes distribution of whatever estate residue may exist from the Exemption Trust following Ann’s death if she fails to exercise her power of appointment.

Prior to Charles’s death the Carpy children, including John, were contingent remainder beneficiaries of the revocable Carpy Trust, and following Charles’s death, John and his siblings were contingent remainder beneficiaries of the designated irrevocable subtrusts. In essence, John (as the other Carpy children) can only take from The Carpy Trust estate (unless the trustee elects to make an inter vivos gift) to the extent that Ann chooses to make a testamentary disposition in his favor, or to the extent that Ann fails to make an alternative disposition.

The Carpy Winery Trust

In 1995, Charles, Ann and the five children created The Carpy Winery Trust (Winery Trust). All seven individuals, including John, were both trustors and beneficiaries of the trust, and three (Charles, Ann, and one of John’s siblings) were the designated trustees. The original trust instrument is not in the record, but a restatement of the trust, executed after Charles’s death, in May 1998 (Restatement), recites these facts.⁴

4 The Carpy Winery Trust Restatement also recites that after Charles’s death in 1996, his community property interest in the Carpy Winery Trust was distributed to the Carpy Trust, and was subsequently contributed back to the Carpy Winery Trust.

As articulated in the Restatement, the trust purpose of the Carpy Winery Trust was to provide for continuity in the management of the trustors’ interests in the Freemark Abbey Winery limited partnership. All of the trustors were limited partners in Freemark Abbey Winery and the trust estate consisted of their respective partnership interests.⁵ Each trustor’s interest in the trust was revocable at the option of that trustor. During each trustor’s lifetime, net income from a trustor’s proportionate interest in the trust was to be distributed to that trustor, supplemented by principal (a) as necessary for the trustor’s health, maintenance, and support in the opinion of the trustee, or (b) as requested in writing by the trustor. Upon the death of a trustor, his or her interest was to be distributed to that trustor’s designated beneficiary. The trust’s limited partnership interests were liquidated by a sale of the winery in 2001, and a final distribution of cash trust corpus from the sale proceeds made to the beneficiaries on August 25, 2005.

5 The individual interests of the trustors are not identified, but the aggregate family interest in the partnership held by the Winery Trust was 25.45 percent.

The Prior Accountings and John’s Requests for Trust Information

In March 2003, the trustees filed an Account and Report of Trustee and Petition for its Settlement (First Account) for both the Carpy Trust and the Carpy Winery Trust in Napa County Superior Court, commencing two special proceedings, In re The Carpy Trust, case no. 26-20490, and In re The Carpy Winery Trust, case no. 26-20489 (the “2003 Accountings”). Surviving spouse Ann Carpy was the trustee of the Carpy Trust at the time of the filing.

Attached to the First Account of the Carpy Trust were four exhibits consisting of financial reports for the period August 19, 1996, through October 31, 2002, on (a) The Estate of Charles A. Carpy, an administrative trust established to account for the assets held in the Carpy Family Trust between Charles’s death and distribution of assets to the revocable Survivor’s Trust⁶ and to the irrevocable subtrusts, and (b) three irrevocable subtrusts: The Chuck Carpy Marital Deduction Trust (the Marital Deduction Trust [QTIP]), the Carpy GST Exempt Trust (GST Exempt Trust), and The Carpy Exemption Trust (Exemption Trust).⁷ The First Account of the Carpy Winery Trust is not included in the record provided, but an exhibit to the Final Account of that trust that is in the record consists of financial reports on the Carpy Winery Trust for the period August 19, 1996, through October 31, 2002.

6 The revocable Survivor’s Trust was not part of the accounting, and is not at issue in this proceeding, although, as discussed post, at least some of John’s discovery requests seek information relating to the Survivor’s Trust.

7 An additional subtrust created, apparently for tax purposes, and is identified in the accounting as the GST (Generation Skipping Tax) Exempt trust. The trustee asserted authority to do so as a tax election under the General Administrative Provisions of the Carpy Trust agreement. John contested the trustee’s authority to create this trust.

At the time of the 2003 Accountings, John apparently asked for more information about certain assets listed in The Carpy Trust accounting, including interests in entities called C. Carpy & Co., Carpy & Conolly, and The Wine Country Inn (Wine Country Inn).⁸ The Marital Deduction Trust held interests in each of these entities. The Exemption Trust and the GST Exemption Trust each held only fractional interests in Carpy & Conolly. On April 25, 2003, the trustees’ counsel responded by letter directing John to contact these entities directly if he wanted additional information. It is not clear whether John ever did so. In November 2003, John wrote to Steven Buehl, counsel for the Freemark Abbey Winery requesting documents related to the winery partnership.⁹ Two days later, the trustee’s counsel responded to John’s attorney as follows: “Enclosed find a copy of a letter faxed to me by Steve Buehl, who is both the brother-in-law of John Carpy and a partner of [a law firm]. [¶] I suggest that you put a stop to this chicanery before Steve lifts his hand to dictate a response. [¶] We will not participate in any settlement conference or in any other form of facilitated meeting with John unless this behavior comes to a halt.” Both 2003 petitions were subsequently dismissed by the trustees prior to any final action on the petitions by the court.¹⁰

8 John contends that he has sought information about the trust “for the past decade” but could not get it from the family. The record provides us only with information as to the requests we discuss here.

9 He requested a copy of the partnership agreement and any amendments thereto, a list of managing and limited partners, meeting minutes, correspondence, documents provided to partners, any documents signed by the beneficiaries of The Carpy Winery Trust agreeing to the sale of the partnership in 2000, and the content of a Legacy note that was to be paid in 2004.

10 The trustees represented that the petitions were dismissed after John had fired his then attorney.

In September 2006, the trustee of the Carpy Trust¹¹ filed a “Petition Instructing Trustee” (case no. 26-35055) asking the court to (1) determine that an account and report shall be filed for the subtrusts limited to the requirements of Probate Code 1060 et seq., ¹² and (2) determine that the Carpy Winery Trust had been terminated and determine whether an account for that trust was required. No action had been taken in that case as of June 2007.

11 In 2005, Ann resigned as trustee of the Carpy Trust and Dale M. Brown became successor trustee pursuant to the terms of the Carpy Trust document. In January 2008, Kevin S. Alfaro became successor trustee of both the Carpy Trust and its three irrevocable subtrusts.

12 All statutory references are to the Probate Code unless otherwise indicated.

The Instant Actions: John’s Petitions for Accountings

On June 11, 2007, John filed petitions for accountings of the Carpy Trust (In re The Carpy Trust, case no. 26-38094) and the Carpy Winery Trust (In re The Carpy Winery Trust, case no. 26-38096) which are the bases for these consolidated appeals.¹³

13 John also filed a petition for an accounting of a John Carpy Trust (case no. 26 38098), based on a tax return that was prepared for such a trust. The trustee later explained that Charles and Ann had filed tax returns under each of their children’s names for subtrusts that were actually part of The Carpy Trust or The Carpy Winery Trust, so despite the tax return “there never has been a trust for John Carpy.” The issue was left open until John could confirm these representations. John has not appealed from any trial court orders in that action, so the issue is not before us.

Second Account of The Carpy Trust

On November 13, 2007, the trustee of the Carpy Trust filed a Second Account and Report of Trustee and Petition for its Settlement (Second Account). Attached to the Second Account was a copy of the 2003 The Carpy Trust First Account and its exhibits, as well as three new exhibits consisting of financial reports on the subtrusts for the period November 1, 2002, through September 30, 2007. The 2003 reports reflected the value of Charles administrative estate (1/2 of the community) at the time of his death at $4,877,196. The bulk of the detail in the exhibits in both accountings dealt with assets and transactions in the Marital Deduction Trust. The Marital Deduction Trust established on Charles’s death was valued at $4,415,629.41 at its inception, at $3,872,786.79 as of October 31, 2002, and at $4,276,969.02 as of September 30, 2007. The GST Exempt Trust corpus consisted of a 10.52 percent interest in “Carpy & Conolly”¹⁴ valued at $448,285.79 on December 31, 1998. As of October 31, 2002, income of $20,000 had been distributed to Ann, and there was a little over $10,000 cash accumulated. As of September 30, 2007, the assets of the GST Exempt Trust consisted of the Carpy & Conolly interest, plus about $16,000 in cash, with a total value of $464,725.76. An additional $5,202 of income had been distributed to Ann Carpy since the earlier accounting.

14 Carpy & Conolly was represented to be a real estate joint venture formed by Charles, Ann, and two others that originally held three parcels of property. The interest distributed to the Exemption Trust consisted of a portion of Charles and Ann’s 50 percent interest in a single parcel of real estate at 8891 Conn Creek Road, St. Helena (identified as the “Rutherford Property”). John alleges that a vineyard business is conducted on the Rutherford property. See discussion of Supplement to Amended Second Account post.

The Exemption Trust was initially funded on December 31, 1998, with a distribution from Charles’s estate of a 12.94 percent interest in “Carpy & Conolly” valued at $551,670.76. As of October 31, 2002, $27,000 income had been distributed to Ann Carpy, and the trust corpus was valued at $562,047.65. As of September 30, 2007, the assets of the Exemption trust consisted of the same Carpy & Conolly interest, plus about $18,000 in cash, with a total value of $569,592.80. A total of $6,400 had been distributed to Ann Carpy since the earlier accounting.

Account of the Carpy Winery Trust

On November 30, 2007, the trustees for the Carpy Winery Trust filed a Final Account and Report of Trustees and Petition for its Settlement (Final Account). Attached to the Final Account was an exhibit consisting of financial reports on the trust for the period August 19, 1996, through October 31, 2002, followed by financial reports on the trust for the period November 1, 2002, through September 30, 2007.

The Final Account values the trust’s 25.45 percent interest in Freemark Abbey Winery at about $3.9 million at the time of Charles’s death. Between 1996 and 2002, the trust earned about $388,000 in income from the winery and in interest. In 2001, it realized $3.7 million in gains from the sale of the winery, increasing the trust’s value to more than $8 million. Between 1997 and 2005, the trust distributed about $2.25 million in equal shares ($450,000) to each of the five children, about $30,000 to Ann, about $2.8 million to the Marital Deduction Trust, and about $2.6 million to the Survivor’s Trust.¹⁵ Following the sale, the trust continued to hold the same 25.45 percent proportionate interest in an installment note from the winery sale. The note was redeemed on August 4, 2004, and the final distribution was made to the beneficiaries on August 25, 2005. After losses, expenses and distributions, the trust had no property on hand as of September 30, 2007.

15 These distributions were presumably in proportion to the respective limited partnership interests of the beneficiaries. John does not contend otherwise. Nothing in the record before us reflects anything more detailed than the aggregate interest of 25.45 percent held by the trust.

John’s Objections

On January 7, 2008, John filed objections to both accountings. He presented no specific objection to the accounts submitted, but stated that he needed “the opportunity to examine underlying support documentation in order to determine the accuracy of the accounting[s], ”¹⁶ and he requested specified “[u]nderlying support documents, ” including the instruments that created, amended or restated the trusts; appraisals of trust assets; documentation of sales of assets; notifications to beneficiaries; documentation of business operations for businesses held by the trust in whole or in part; and, as to the Carpy Winery Trust, bank statements and cancelled checks.¹⁷

16 John also objected to the Carpy Trust accounting because it included the First Account (from 2003), which had never been approved by the court. Trustee responded to this objection by promising to incorporate the First Account into an amended Second Account that would cover the entire accounting period from August 19, 1996, through September 30, 2007. The trustee filed this account in April 2008, as explained further post.

17 John requested the following documents in the Carpy Trust proceeding:

The Discovery Dispute

The trustees complained that John had made no substantive objections to the accountings and argued that his “attempt to use his objections as an opportunity to conduct informal discovery should be stricken.” At a January 10, 2008 consolidated hearing on both matters, trustees’ counsel further argued John sought information as to business entities which the trusts did not manage, and was on a “fishing expedition to look for potential breaches of trust.” Trustee’s counsel contended that some of the requests were unduly burdensome or should be directed to other entities. Both sides asked for the court’s assistance in informally resolving the discovery issues. The court suggested that the issues should be resolved without “full-blown litigation” and directed the parties to meet and confer on the issues. It set a further status conference for January 22, 2008, for a report on the parties’ meet-and-confer efforts.

At the January 22 hearing, trustees’ counsel said she had spoken with John’s counsel, that she was still looking for certain documents he had requested, and that most of the requested documents were not in the trustees’ possession. John again asked for the court’s assistance in resolving the discovery dispute. The court scheduled a conference for February 15 to attempt to mediate the disputes and offered the parties the opportunity to file briefs. No record is included here from any proceedings on February 15, 2008.

The parties filed briefs on the discovery issue on February 8, 2008. Trustees’ counsel, citing Forthmann v. Boyer (2002) 97 Cal.App.4th 977 (Forthmann), argued that discovery could be ordered only if specific objections were filed.¹⁸ John argued that Forthmann was distinguishableon the ground that the party seeking discovery there had filed no objections, and argued that detailed objections were not required in light of the court’s duty to protect the estate and insist that an accounting be complete and clear. John explained that he “simply seeks information to identify the initial Trust assets and seeks an accounting that provides a trail that follows the Trust assets to their current status.”

18 Trustees’ counsel also objected on the ground that the trial court violated a court rule when it granted a continuance for a purpose other than allowing John to state more specific objections to the accounting. However, respondents do not renew this argument on appeal.

At a March 28, 2008 hearing, counsel for the trustee again objected that the discovery John was seeking was unduly burdensome, impacting the resources of the income beneficiary (Ann).¹⁹ The court again expressed concern that John’s requested discovery was “far too broad.” The court directed John’s counsel to “carefully tailor your discovery request, ” requested further briefing, and continued the matter for hearing to May 7, 2008.

19 The Amended Second Account of the Carpy Trust reported that Ann was paying all attorney fees of the trust, without request for reimbursement.

Amended Second Account

On April 11, 2008, the trustee for the Carpy Trust filed an Amended Second Account and Report of Trustee and Petition for Its Settlement (Amended Second Account), which consolidated the exhibits that had been attached to the Second Account to create a single accounting for each irrevocable subtrust that covered the period August 19, 1996, through September 30, 2007.²⁰

20 Upon filing the Amended Second Account, the trustee argued it had resolved John’s only valid objection to the Second Account and asked the court to approve the accounting without allowing John discovery.

May 7, 2008 Discovery Order

On May 7, 2008, the court made the following order in both matters: “[I]n light of the discussion in Forthmann v. Boyer [supra] 97 Cal.App.4th 977, finding that liberal discovery policies apply in probate proceedings, and that courts should err on the side of allowing appropriate discovery when a written objection has been filed, the court will not foreclose out-of-hand the possibility of allowing certain carefully tailored discovery to John Carpy. However, the requests set forth in the objections to the Second Account and Report are too broad and far reaching. Also, trustee has now filed an Amended Second Account and Report, incorporating the period covered by the First Account and Report filed in a separate action, but never approved. To the extent that he has objections to the Amended Second Account and Report, John Carpy is directed to file specific objections. He may then serve upon Trustee narrowly tailored discovery requests under the Discovery Act. The court does not intend to allow a fishing expedition into the Trust’s financial affairs, but any ruling by the court on what discovery will or will not be compelled will be reserved until brought before it on appropriate discovery motions, should those become necessary.”

May 22, 2008 Objections to Amended Second Account

On May 22, 2008, John filed objections to the Amended Second Account in the Carpy Trust matter. He objected generally on the grounds (1) that he “is informed and believes that certain assets of the Carpy Trust are not accounted for in the Amended Second Account”; (2) that he “is informed and believes that certain procedures established in The Carpy Trust have not been adhered to and certain assets of said trust are not accounted for in the Amended Second Account”; and (3) he “needs to have the opportunity to examine underlying support documentation relating to various assets of the Carpy Trust in order to determine the true value of the assets and the accuracy of the accounting.” He also made the following more specific objections to the accounting.

He averred that Ann, who was sole trustee from Charles’s death until October 2005, “failed to provide JOHN with a copy of the Carpy Trust, at the time of its funding in 1996; and that he did not receive a copy until four years later, in 2000; and that from the time he received a copy of the trust, the trustee ceased all communication with him.”

He further averred that, despite the purchase option in The Carpy Trust, the family residence at 2401 Main Street “was sold without JOHN having been advised of, nor given an opportunity to exercise, said first right of refusal.”

He produced two deeds showing trust ownership of real property that was not expressly included in the accounting. A September 1997 deed showed that Ann, as trustee of The Carpy Trust, granted her 50 percent interest²¹ in real property commonly known as 8891 Conn Creek Road, St. Helena (which John called “the Rutherford property”) to Carpy-Conolly I LLC, a California limited liability company. In the same deed, the holders of the remaining 50 percent interest in the property also transferred their interests in the property to Carpy-Conolly I LLC. An August 1998 deed showed that Ann, as trustee of The Carpy Trust, granted her undivided one-half interest in real property located in San Mateo County (apparently, 515 Stage Road, Pescadero) to herself, as trustee of the Marital Deduction Trust.

21 The deed describes Ann’s interest in the property as “an undivided forty nine and one half percent (50%) interest.” The discrepancy is not explained. The interests of other grantors mentioned in the deed total 50 percent, not 50.5 percent.

John continued: “JOHN has found no mention of Carpy-Conolly I LLC in the Amended Second Account or the transaction transferring the Rutherford property out of the Carpy Trust. This transaction raises significant questions about the Carpy Trust and the asset, Carpy-Connolly and why Carpy-Conolly I LLC is not identified as an asset of the Carpy trust. It also is not known and cannot be determined from the account whether the business of the vineyard that is on the Rutherford property... is included in the Carpy Trust, Carpy-Conolly, or how it is accounted for.” Regarding the Pescadero property, John wrote, “If the parcel remains in the Trust, it does not readily appear in the account and if it was sold, the proceeds of the sale do not readily appear.” Finally, he noted that the Amended Second Account includes an unexplained “change in treatment of a $57,775 payment to Carpy-Conolly. This fact emphasizes the need for discovery to proper[l]y analyze the Amended Second Account.”

John further stated on information and belief that C. Carpy & Co. “is a general partnership, owned by the Carpy Trust and members of John’s immediate family; its value is based upon the assets it holds, among which is the Wine Country Inn. JOHN cannot determine the actual value of C. CARPY & CO., nor its holdings without discovery.”

On May 28, 2008, the court filed an order in The Carpy Trust matter that stated, “The court has received objections to the Amended Second Account and Report of Trustee. Objector indicates his intention to seek discovery from trustee. This court has previously ruled that he may do so using ordinary civil discovery methods.”

June 2008 Discovery Requests

In June 2008, John served the trustees of both trusts with the requests from production of documents which are the focus of this appeal.

Regarding The Carpy Trust subtrusts, John requested the following documents for Carpy & Conolly, C. Carpy & Co. and the Wine Country Inn during the period of the accounting: documents related to the organization of the entity (including entities with similar names), profit and loss statements, balance sheets, documents showing assets and liabilities, federal and state income tax returns, and documents identifying the entities’ employees. He also requested documents related to the purchase, sale, or transfer of real property, including 2401 Main Street, St. Helena, California; 8891 Conn Creek Road, St. Helena, California; and 515 Stage Road, Pescadero, California, as well as appraisals and the escrow closing statement for 2401 Main Street. Finally, he requested the trust document and any amendments thereto, documents related to the creation of the subtrusts, documents related to loans made by the trust to any remainder beneficiary during the accounting period, the trust’s federal and state income tax returns, and any appraisals or valuations of any of the trust’s or subtrusts’ former or current assets.

Regarding the Carpy Winery Trust, John requested the partnership agreement and every accounting provided to the partners of Freemark Abbey Winery, as well as the following documents related to the trust: the original trust document and amendments or restatements thereto, state and federal income tax returns, cancelled checks made payable to John, profit and loss statements, balance sheets, documents showing assets, liabilities, and the trust’s employees, and documents related to the sale of the trust.

The trustees responded to the requests with objections and did not produce any of the requested documents. The trustee for The Carpy Trust objected to each of John’s requests on the ground that they were overly broad and not reasonably calculated to lead to the discovery of admissible evidence, and that they were “in the process of preparing a supplement to the Second Amended Account, which addresses the concerns raised by John Carpy in his objections to that account. Once the supplement is submitted, the currently pending objections will become moot. Consequently, this request cannot, by definition, be narrowly tailored to support any of his objections.” The Carpy Winery Trust trustees objected to John’s requests on the ground that they were overly broad and not reasonably calculated to lead to the discovery of admissible evidence or narrowly tailored to support specific objections. With respect to the request for trust documents, amendments and restatements, they further objected on the ground that the documents were attached to the Final Account. With respect to the requests for the trust’s tax returns, the trustees further objected on the ground that the documents were “protected by privacy rights and the attorney/client communication privilege.”²²

22 On July 14, 2008, trustees’ counsel asked John to voluntarily withdraw his discovery requests. Counsel argued the requests did not comply with the trial court’s May 7, 2008 ruling that they be narrowly tailored, that the requests regarding The Carpy Trust would be rendered obsolete by a soon-to-be-filed supplement to the Amended Second Account, and that the requests regarding The Carpy Winery Trust were not related to pending objections. John did not accede to this request.

Supplement to Amended Second Account

On July 28, 2008, the trustee for the Carpy Trust filed a Supplement to Amended Second Account and Report of Trustee and Petition for Its Settlement (Supplement) that responded to John’s objections regarding Carpy & Conolly, the Rutherford property, and the Pescadero property. It explained that Carpy & Conolly was a joint venture between Charles, Ann, and Joseph F. and Mathilde Conolly that owned three pieces of property at the time of Charles’s death: “(i) 8891 Conn Creek Road, St. Helena, CA (the ‘Rutherford property’); (ii) 515 Stage Road, Pescadero, CA (the ‘Pescadero property’); and (iii) ‘Carizza Plains, ’ King City, CA (the ‘San Luis property’).”

“Following the death of Chuck Carpy, on or about June 23, 1997, Ann Carpy and her brother-in-law, Joseph Conolly, formed Carpy-Conolly I LLC and subsequently transferred their respective interests in the Rutherford property (held in their respective revocable trusts) to it. The parties intended to transfer the other two properties into a second limited liability company, Carpy-Conolly II LLC, but never completed the transfers. A cancellation of the name ‘Carpy-Conolly II LLC’ is currently pending with the Secretary of State.” “As part of the post-death administration of The Carpy Trust, Ann Carpy allocated an undivided 50% interest in both the Pescadero property and the San Luis property to the [Marital Deduction Trust].”

Attached to the Supplement were revised pages for the exhibits to the Amended Second Account that separately listed Carpy & Conolly (i.e., Carpy-Conolly I LLC, which held an interest in the Rutherford property) and the Pescadero and San Luis properties as assets of the trust and subtrusts, rather than collectively identifying these real property interests as “Carpy & Conolly, ” as was done in the original exhibits.²³ Regarding the unexplained $57,775 payment to Carpy-Conolly in the Amended Second Account, the Supplement explained that it was an expense for repairs to the Pescadero property and that the revised exhibit pages listed it as an administrative expense in the Disbursements of Principal schedule for the Marital Deduction Trust.

23 The trustees explained that, because Carpy & Conolly reported its taxable income as a general partnership (even though the parties had no formal partnership agreement), the trustees “elected to prepare the accounting consistent with the method for reporting taxable income on the joint venture (partnership) tax returns viz. identifying the separate holdings of Carpy & Conolly in the subsequently formed limited liability company and real property since the effect on the various schedules would be negligible.”

Objections to Supplement to Amended Second Account

On August 25, 2008, John filed objections to the Supplement. “Inasmuch as the Supplement does not answer the basic objections raised heretofore by the Objector, he asserts the same objections as made herein to the First, Second, and Amended Second Report of the Trustee.” He also objected to the trust’s creation of the generation skipping trust (the GST Exempt Trust), contending that there was no provision for the creation of such a subtrust in the original trust instrument. He argued further, “[T]he Trustee, through counsel, adamantly fails and refuses to give any information as to three key assets, the partnerships referred to as C. Carpy & Co., Carpy & Conolly, and Carpy Winery Trust. By inference, these assets consisted of very large holdings of prime vineyard interests. There are also real estate holdings in Pescadero and San Luis Obispo count[ies] (100 acres).... [¶] While it is certainly possible that... these assets will be found to have been managed ‘frugally and without waste[, ]’ there is simply no way to know this now, other than blind faith.”

At an August 27, 2008 court hearing, the court commented, “To me, it’s dragged on a long time and [the] only thing that I have seen, really, that had some meat on it was this GST. Nothing else seemed to be of concrete value.”²⁴ The court set an October 22 hearing to rule on an anticipated motion to compel, and directed the parties to once again meet and confer on the discovery dispute.

24 At the hearing, trustees’ counsel argued that the Carpy Trust document did authorize creation of a generation-skipping trust. John’s counsel told the court he had not previously heard opposing counsel’s explanation and asked for time to consider it. Although the issue was not discussed at later trial court hearings, John never withdrew his objection to the creation of the subtrust and we infer that the court rejected the contention in approving the accountings.

Motions to Compel

In September 2008, John moved to compel further discovery responses in both matters. He filed a separate statement in support of each motion. He argued generally that because each trust held assets that were operated by family members who were also beneficiaries or trustors (or both) of the trusts, he was entitled to review financial information about the value and management of those assets to determine whether the accounting was accurate and whether all beneficiaries were being treated fairly. In opposition, the trustees argued that John’s objections were still overbroad, that no new objections had been filed to the Carpy Winery Trust’s Final Account, and that John’s limited interest as a remainder beneficiary did not entitle him to the detailed financial information he was seeking.

October 15, 2008 Hearing and Denial of Motions to Compel

At an October 15, 2008 hearing on the motions, John’s counsel argued, “[T]he majority of the assets of the trust are concentrated in two real property holdings which are two limited partnerships. And we simply don’t have any information about them. [¶] It may be that they’re being administered in the most exemplary fashion and there’s nothing to worry about at all. It may be, however, that family members are able to participate other than John in the management of those companies, receiving part of the income stream and so forth.... [¶]... [W]e’re confronted with dozens of acres of prime vineyard land that are [listed as] one little line carried at the value that they represent the value 15, 20 years ago, we don’t know. And nothing about this operation at all.... [¶]... [¶]... [S]ome discovery is appropriate.” The trustees countered by emphasizing John’s limited interest in the Carpy Trust as a remainder beneficiary, and arguing that the proceedings for trust accountings were not the proper forum for gathering information about the partnerships.

The court ruled, “In looking at the separate statement and the objections and the requested documents, I’ve come to this conclusion. I’ve already held this won’t be a fishing expedition; it appears to [m]e the objector’s separate statement doesn’t do anything to correlate any objections that have been asserted or any claims that you may have to the requested documents. [¶] So I’m going to deny both motions.” The court filed a summary written order on October 29, 2008.

Court Approval of Accounts

On November 5, 2008, the court approved the Amended Second Account in the Carpy Trust matter, as supplemented, and the Final Account in the Carpy Winery Trust matter. On December 29, John filed a notice of appeal in each case from “10/31/08 ‘Notice of Entry of Order Denying Motion to Compel Discovery Responses.’ ”

II. Discussion

John argues the trial court erred when it approved the trustees’ accountings without permitting him adequate discovery. We agree. We are not unsympathetic to the trial court’s apparent frustration with John’s inability to focus his requests. But while we agree that John sought more information than he was entitled to receive, it also appears that he received less than he was due under the Probate Code, and that the trial court too narrowly construed the discretion available to it in considering his requests.

We first consider the trustees’ argument that the appeal should be dismissed because they were taken from nonappealable orders and because John forfeited his right to appeal the discovery orders. We reject these arguments. We then review the legal standards governing discovery motions and consider the scope of relevant discovery in a proceeding on a trust beneficiary’s petition to obtain a report and account from the trustee on the affairs of a trust.

A. Appealability

John’s notice of appeal in each case identifies the order appealed from as “10/31/08 ‘Notice of Entry of Order Denying Motion to Compel Discovery Responses.’ ” The trustees do not complain that the notice identifies a notice of entry of the discovery order rather than the discovery order itself. Rather, they argue the appeal must be dismissed because the discovery order is not appealable under Code of Civil Procedure section 904.1.

Although the discovery order was not directly appealable, it was reviewable on appeal from the final judgment. (Carlson v. Superior Court (1961) 56 Cal.2d 431, 435–436; Wooldridge v. Mounts (1962) 199 Cal.App.2d 620, 628 (Wooldridge).) Applying the well-established policy that notices of appeal should be construed liberally in favor of their sufficiency (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 20 (Walker)), we conclude the notice of appeal should be construed as an appeal from the judgment in each case.

Under the rule of liberal construction, a notice of appeal from a nonappealable order “ ‘can be interpreted to apply to an existing appealable order or judgment, if no prejudice would accrue to the respondent.’ ” (Walker, supra, 35 Cal.4th at p. 20.) In Walker, the trial court entered judgment on November 13, 2001, and denied the plaintiff’s motion for a new trial on January 3, 2002. (Id. at p. 18.) On February 4, 2002, the plaintiff filed a notice of appeal from the order denying her motion for a new trial, which was not an appealable order. (Id. at pp. 18–19.) The Supreme Court held the court of appeal erred by dismissing the appeal rather than construing it as an appeal from the final judgment. (Id. at p. 21.) “Walker has presented a colorable argument that she intended to appeal from the underlying judgment and that the [respondent], which filed a respondent’s brief on the merits in the Court of Appeal as well as a counter-designation of the record on appeal, would not be prejudiced by allowing the appeal to go forward.” (Ibid.) Moreover, the court had appellate jurisdiction over the appeal despite the defect in the notice of appeal, because the notice was filed within the time period for appealing from an existing appealable order or judgment. (Ibid.) The Court distinguished cases in which an appeal from a nonappealable order was dismissed where no appealable judgment or order had been entered. (Ibid.; see, e.g., Modica v. Merin (1991) 234 Cal.App.3d 1072, 1073–1075; Shpiller v. Harry C’s Redlands (1993) 13 Cal.App.4th 1177, 1178–1180.)

Here, the trial court denied John’s motions to compel in October 2008, and entered final orders approving the accountings in November. John’s notices of appeal, filed on December 29, were timely with respect to the final orders. There appears to be no doubt that John intended to appeal from the trial court’s final orders on the ground that the accountings should not have been approved without first compelling responses to John’s discovery demands so he could fully analyze the accountings and raise appropriate objections. The statement of appealability in John’s opening briefs stated, “Denial of a motion to compel discovery is appealable after the final judgment is entered. [Citation.] Without the clarification of the issues from discovery and just days after the court had denied discovery, the final judgment in this matter was entered....” Moreover, it appears the trustees will not be prejudiced by our construing the notice of appeal to be an appeal from the final orders, as they filed appellate briefs on the merits and counter-designations of the record on appeal. Therefore, we apply “the prevailing judicial policy of construing notices of appeal as referring to the proper order where, despite minor technical deficiencies, they in fact gave timely and adequate notice of the matter referred for appellate review.” (Conservatorship of Starr (1989) 215 Cal.App.3d 1390, 1393–1394, fn. omitted [construing notice of appeal from a minute order as an appeal from the formal appealable order]; see also Holden v. California Emp. etc. Com. (1950) 101 Cal.App.2d 427, 429–431 [construing notice of appeal from order granting motion to dismiss as an appeal from judgment of dismissal]; McClellan v. Northridge Park Townhome Owners Assn., Inc. (2001) 89 Cal.App.4th 746, 751 [construing notice of appeal from order granting motion to amend judgment as appeal from amended judgment]; Gu v. BMW of North America, LLC (2005) 132 Cal.App.4th 195, 202 [construing notice of appeal from order sustaining demurrer as appeal from judgment of dismissal].)

The trustees argue that John waived his right to appeal from the discovery order by failing to seek writ review of the order before judgment was entered. They cite Wooldridge, supra, 199 Cal.App.2d 620, which stated that, although discovery orders are reviewable on appeal of a final judgment, “appellate courts are much more reluctant to overturn the judgment of a trial court after the full trial of the action because of a procedural error unless such error is so prejudicial it constitutes a miscarriage of justice.” (Id. at pp. 628–629.) With respect to a particular argument that the opposing party’s objections to the discovery requests were filed late, the court wrote the argument “should have been raised... by writ of mandamus.... [Citation.] Since defendants elected to sit on their rights, the hearing of objections filed after the statutory period, if error, was not prejudicial. [Citation.]” (Id. at p. 629.)

However, a prerogative writ is not the favored method of reviewing discovery orders. “Ordinarily the aggrieved party must raise the issue on direct appeal from a final judgment. [Citations.] The premise upon which this general policy rests is that in the great majority of cases the delay due to interim review of discovery orders is likely to result in greater harm to the judicial process by reason of protracted delay than is the enforcement of a possibly improper discovery order.” (Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 5 (Sav-On Drugs).)

We thus reject the trustees’ arguments that these appeals should be dismissed.

B. Motions to Compel

John does not challenge here the court’s approval of the accountings on any substantive defect in the proof presented to the court. Rather he contends that the denial of his motions to compel further responses to his requests for production of documents precluded him from being able to contest the showing made by the trustees.

The trial court’s denial of John’s motions to compel can only be overturned if the court abused its discretion. (Save Open Space Santa Monica Mountains v. Superior Court (2000) 84 Cal.App.4th 235, 245–246.) “ ‘Where there is a basis for the trial court’s ruling and the evidence supports it, a reviewing court will not substitute its opinion for that of the trial court. [Citation.]’ [Citation.] The trial court’s determination will be set aside only when it has been established that there was no legal justification for the order granting or denying the discovery in question.” (Ibid., quoting Johnson v. Superior Court (2000) 80 Cal.App.4th 1050, 1061.) The burden rests on the complaining party to demonstrate from the record that such an abuse has occurred. (Forthmann, supra, 97 Cal.App.4th at p. 985.)

However, “Appellate courts must keep liberal policies of discovery statutes in mind when reviewing decisions denying or granting discovery. (Pacific Tel. & Tel. Co. v. Superior Court (1970) 2 Cal.3d 161, 171.) Absent a showing that substantial interests will be impaired by allowing discovery, liberal policies of discovery rules will generally counsel against overturning a trial court’s decision granting discovery (ibid.) and militate in favor of overturning a decision to deny discovery. (Ibid., quoting Greyhound Corp. v. Superior Court (1961) 56 Cal.2d 355, 378–379 [‘in passing on orders denying discovery appellate courts “should not use the trial court’s discretion argument to defeat the liberal policies of the statute” ’].)” (Forthmann, supra, 97 Cal.App.4th at p. 987; see also Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1497; but see Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223 [danger of overreaching discovery is particularly great with respect to orders requiring production of documents].)

“ ‘ “[T]he scope of discretion always resides in the particular law being applied, i.e., in the ‘ “legal principles governing the subject of [the] action....’ Action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an “ ‘abuse’ ” of discretion.” ’ [Citations.]” (Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 833.) In other words, judicial discretion must be measured against the general rules of law and, in the case of a statutory grant of discretion, against the specific law that grants the discretion. (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393.)

1. Beneficiaries’ Rights to Information from Trustees

a. Mandated Information

John filed his petitions for accounting pursuant to sections 16060 et seq. and 17200, subdivision (b)(7).²⁵ The trustee of a revocable trust generally has no duty to report or account to the trust beneficiaries and the beneficiaries have no right to receive such accountings. (Johnson v Kotyck (1999) 76 Cal.App.4th 83, 87; § 16064, subd. (b) [trustee not required to report information or account to “a beneficiary of a revocable trust, as provided in Section 15800, for the period when the trust may be revoked”].) Section 16060 et seq. imposes a broad duty to report, on request, information and account to beneficiaries of irrevocable trusts: “[O]n reasonable request by a beneficiary, the trustee shall provide the beneficiary with a report of information about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relevant to the beneficiary’s interest, including the terms of the trust.”²⁶ (§ 16061; see also § 16060 [“trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration”].) A trust “beneficiary” is a person to whom a donative transfer of property has been made and “who has any present or future interest, vested or contingent.” (§ 24, subd. (c).)

25 In addition to citing section 16060 et seq., John cited section 16062, subdivision (a) in the Carpy Trust case and section 16061 in the Carpy Winery Trust case. Section 16062 requires annual reports to beneficiaries under certain circumstances. The trust instrument here provided for annual accountings by the trustee only when both of the original trustors no longer served as trustees, and then for the accounting to be provided to the trustor(s) then surviving. The residual beneficiaries were to receive the annual accounting only if both trustors were deceased.

26 A trustee is not required to report to the extent that the trust instrument waives the report or account. (§ 16064, subd. (a).) Since neither party argues that the right to an accounting has been waived under § 16064, we do not consider that issue.

Sections 16060 and 16061 codify trustees’ common law duty to report to beneficiaries. (See Wells Fargo Bank v. Superior Court (2000) 22 Cal.4th 201, 207–208, & fn. 1 (Wells Fargo), [citing Union Trust Co. v. Superior Court (1938) 11 Cal.2d 449, 460–462, and Strauss v. Superior Court (1950) 36 Cal.2d 396, 401–402].) The duty of the trustee under sections 16060 and 16061 is to keep beneficiaries “reasonably informed” (§ 16060) and to provide “a report of information” (§ 16061). (Wells Fargo, at p. 207.) The trustee’s duty to furnish information to beneficiaries is articulated in the Restatement Third of Trusts, as follows: “(1) Except as provided in § 74 (revocable trusts) or as permissibly modified by the terms of the trust, a trustee has a duty: [¶] (a) promptly to inform fairly representative beneficiaries of the existence of the trust, of their status as beneficiaries and their right to obtain further information, and of basic information concerning the trusteeship; [¶] (b) to inform beneficiaries of significant changes in their beneficiary status; and [¶] (c) to keep fairly representative beneficiaries reasonably informed of changes involving the trusteeship and about other significant developments concerning the trust and its administration, particularly material information needed by beneficiaries for the protection of their interests. [¶] (2) Except as provided in § 74 or as permissibly modified by the terms of the trust, a trustee also ordinarily has a duty promptly to respond to the request of any beneficiary for information concerning the trust and its administration, and to permit beneficiaries on a reasonable basis to inspect trust documents, records, and property holdings.” (Rest.3d Trusts, § 82, pp.180-181 (Restatement).) “Under the general rule of Subsection (2), a trustee ordinarily has a duty, with reasonable promptness, to provide information that is requested regarding the trust property or its administration by any beneficiary, a right not limited to fairly representative beneficiaries. The trustee is also to grant access to books and records of the trust, and to permit inspection of the trust’s property holdings, on a reasonable basis, at reasonable hours and intervals, to any beneficiary, including with the participation of the beneficiary’s accountant, attorney, or other advisor. On petition by the trustee or a beneficiary, however, a court may limit the frequency or extent of such inquiries by one or more of the beneficiaries, weighing the remoteness or substantiality of their interests in the trust against the burdens, intrusiveness, and privacy considerations that may be involved.” (Ibid., com. e, pp.186-187.) “[T]he beneficiary is always entitled to such information as is reasonably necessary to enable [the beneficiary] to enforce [the beneficiary’s] rights under the trust or to prevent or redress a breach of trust.” (Ibid., reporter’s notes, com. a(2), p.192, italics added.)

As to the irrevocable Marital Deduction Trust [QTIP]), the GST Exempt Trust and the Exemption Trust, John qualifies as a beneficiary entitled to information from the trustee on request under sections 16060 and 16061.²⁷ He was both a trustor and a beneficiary of the Carpy Winery Trust, with a power to revoke as to his interest, and therefore entitled to receive reports from the trustee under section 15800.

27 In the trial court, trustees’ counsel argued that John did not have a right to the information he sought in his discovery requests because he was merely a remainder beneficiary. Respondents do not renew this argument on appeal. It is clear that remainder beneficiaries enjoy the right to trust information as provided under section 16061. (See Esslinger v. Cummins (2006) 144 Cal.App.4th 517, 528 (Esslinger).) The Trustees are correct however that, as we discuss post, John has no right to seek discovery about assets of the revocable Survivor’s Trust. The person holding the power to revoke a revocable trust holds the rights otherwise afforded to beneficiaries under the Probate Code. (§ 15800.)

b. Probate Court Discretion

The probate court is granted broad equitable powers in responding to a beneficiary’s request for an accounting. A beneficiary may petition the court pursuant to section 17200 to compel “the trustee to report information about the trust or account to the beneficiary, if (A) the trustee has failed to submit a requested report or account within 60 days after written request of the beneficiary and (B) no report or account has been made within the six months preceding the request.” (§ 17200, subd. (b)(7).)

“ ‘The matter of determining the appropriate equitable relief to be granted to a beneficiary is generally left to the good judgment of the trial court.’ [Citation.]” (Evangelho v. Presoto (1998) 67 Cal.App.4th 615, 623–624; see also Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 237 [the probate court has the power to settle all disputes relating to the trust matters that come before it]; Schwartz v. Labow (2008) 164 Cal.App.4th 417, 427 [probate court has “ ‘inherent power to decide all incidental issues necessary to carry out its express powers to supervise the administration of the trust’ ”].)

A “report or account” is not limited to an accounting required by section 16062, but may include any report or account the court in its discretion deems appropriate. (Esslinger, supra, 144 Cal.App.4th at pp. 526, 528 [although a remainder beneficiary was not entitled to a § 16062 accounting, he was entitled to an “account” in the court’s discretion under §§ 16061, 17200, subd. (b)(7)].) However, “[t]he administration of trusts is intended to proceed expeditiously and free of judicial intervention, subject to the jurisdiction of the court” (§ 17209), and “[t]he court may dismiss a petition if it appears that the proceeding is not reasonably necessary for the protection of the interests of the trustee or beneficiary” (§ 17202). The court also has the power to limit the frequency or extent of a beneficiary’s inquiries “weighing the remoteness or substantiality of their interests in the trust against the burdens, intrusiveness, and privacy considerations that may be involved.” (Restatement, supra, § 82, com. e, p. 187.)

c. Discovery in Accounting Proceedings

“[T]here is no question but that the discovery procedures found in the Code of Civil Procedure are available for use in probate proceedings.” (Forthmann, supra, 97 Cal.App.4th at p. 987; see § 1000 [“[e]xcept to the extent that this code provides applicable rules, the rules of practice applicable to civil actions, including discovery proceedings... apply to, and constitute the rules of practice in, proceedings under this code”].) Discovery is expressly provided in “special proceeding of a civil nature.” (Code Civ. Proc., § 2016.020, subd. (a).) Probate matters, including petitions for accountings, are special proceedings of a civil nature. (Coberly v. Superior Court (1965) 231 Cal.App.2d 685, 690 (Coberly).) When a beneficiary raises an objection to an accounting, the beneficiary is entitled to discovery relevant to the objection. (Mota v. Superior Court (2007) 156 Cal.App.4th 351, 355–356; Forthmann, supra, 97 Cal.App.4th at p. 985; Coberly, supra, at p. 690; see also Wells Fargo, supra, 22 Cal.4th at pp. 205–206 [ruling on discovery dispute in action arising from petition for accounting where beneficiaries filed objections]; Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1127–1128 (Moeller) [ruling on discovery dispute in action arising from petition for accounting where successor trustee filed objections].) But the party providing the accounting is also entitled to the concomitant safeguards of those rules against abuse of discovery and absence of good cause. (Forthmann, supra, at p. 985; Coberly, supra, at p. 691.)

The trustees rely on Forthmann, supra, 97 Cal.App.4th 977, to argue that a beneficiary is entitled only to discovery which is narrowly tailored to specific objections to an accounting. We do not believe that Forthmann can be read so narrowly. In Forthmann, the proceeding was initiated by a trustee seeking approval of an accounting; beneficiaries became parties to the proceeding only if they filed a response or objection to the accounting. (Id. at pp. 981–982, & fn. 5, 988; §§ 1043–1044.) The trial court had previously held that the beneficiary, Boyer was authorized to conduct discovery as to all financial matters relating to the accounting (and into a prior year’s account). (Forthmann, at p. 982.) In allowing Boyer to conduct limited discovery, the trial court did so on the assumption that Boyer would first file his proposed response and objections to the accounting. (Ibid.) Boyer never filed any objections to the accounting (because he was concerned an objection would trigger a no-contest clause in the trust and disqualify him as a beneficiary). (Id. at pp. 982–983, 985.) The trial court refused to grant Boyer an additional seven month continuance of an already twice-continued hearing on the trustees’ petition for approval so that he could conduct discovery to evaluate whether or not to file objections. (Id. at pp. 980, 983.) The appellate court upheld the probate court’s denial of the continuance in the absence of any filed objections. (Id. at p. 985.) “Until [the beneficiary] actually filed objections, there was no contested proceeding that would require an assignment for trial and the conduct of discovery. [Citation.]” (Ibid.) The court held that the trial court “cannot be faulted for slamming the door on this transparent fishing expedition” and that, in the absence of specific objections “there is no way to determine what discovery, if any, was ‘relevant to the subject matter involved in the pending action.’ ” Since Boyer “never tendered any issues, raised any issue requiring resolution or sought to become an actual party to a contested proceeding, the trial court was entirely justified in denying his request and approving the account.” (Ibid.) The court therefore held that the filing of a formal objection or response was a necessary predicate to the conduct of any discovery with respect to the accounting. (Id. at p. 988.)

Here, in contrast, John commenced the underlying proceedings and was a party from the outset. We do not quarrel with the holding of Forthmann that a beneficiary must present objections before seeking to pursue statutory discovery procedures, nor do we disagree with the premise that when discovery is sought it must be relevant to the issues properly before the court. Here John did file objections to the accountings the trustees filed in response to John’s petition. We must also recognize that “[t]he pertinent term is ‘discovery, ’ not ‘confirmation.’ ” (City of King City v. Community Bank of Central California (2005) 131 Cal.App.4th 913, 931.) A party is generally entitled to discovery upon a showing, not that he knows what he will find, but that it is reasonable to expect the proposed discovery to yield pertinent and otherwise admissible evidence. (Ibid.) A court still has the power to protect a responding party against discovery that is “unreasonably cumulative or duplicative” (Code Civ. Proc., § 2019.030, subd. (a)(1)), and to prevent abuse of discovery. (City of King City v. Community Bank of Central California, supra, 131 Cal.App.4th at p. 933; Forthmann, supra, 97 Cal.App.4th at p. 985.)

Further, Forthmann does not hold that the only way a beneficiary can obtain information from a trustee is through formal objections to an accounting and pursuit of discovery on the issues raised by those objections. Forthmann did not address a trustee’s duties to provide information on request to beneficiaries under section 16060 et seq., and did not consider the trustee’s obligations to respond to a petition by a beneficiary to obtain information to which he is otherwise entitled under those statutes and in a petition proceeding under section 17200.

d. The Rulings on the Motion to Compel

A party may move to compel further responses to a request to inspect documents on the ground that an objection in the response is without merit or too general. (Code Civ. Proc., § 2031.310, subd. (a)(3).) The moving party must “set forth specific facts showing good cause justifying the discovery sought by the demand, ” and must “be accompanied by a meet and confer declaration under Section 2016.040.”²⁸ (Code Civ. Proc., § 2031.310, subd. (b)(1) & (2).) On the good cause requirement of Code of Civil Procedure section 2031.310, absent a claim of privilege, the party seeking discovery meets his or her burden simply by a fact-specific showing of relevance. (Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98 (Kirkland), citing Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2001) Discovery, ¶¶ 8:1495 to 8:1495.10, pp. 8H-24 to 8H-26; see Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) Discovery, ¶¶ 8:1495 to 8:1495.10, pp. 8H-34 to 8H-36.) This is so because “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action....” (Code Civ. Proc., § 2017.010.) Once good cause is shown, the burden shifts to the opposing party to justify his or her objection. (Kirkland, at p. 98.)

28 Code of Civil Procedure section 2016.040 requires the meet-and-confer declaration to “state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.” The trustees argue that John failed to fulfill the meet and confer requirement. In declarations filed in support of John’s motions to compel, John’s counsel averred that on August 27, 2008, he “met personally with [trustees’ counsel] in an effort to resolve the issues raised by this motion. The parties were unable to reach an agreement....” In response, trustees’ counsel averred that on August 27 “the Court sent us out into the hallway to try to settle the dispute. Although we had a general discussion as to whether Objector was entitled to the documents and/or whether the documents requested would prove relevant to the ‘objections’ to the Supplement..., no agreement was reached. Moreover, and significantly, there was no meet and confer as to any of the specific requests or items in dispute. [¶]... [John’s counsel] said that he would contact me about the discovery responses later that afternoon. I heard nothing from him again with respect to discovery until receiving the subject motion to compel.” John replied that at the August 27 meeting, trustees’ counsel “stated that Trustee simply will not provide any documents and the Objector was not entitled to receive or review any documents.... With such a blanket refusal, there were no negotiations possible. In addition, this very issue had already been addressed numerous times.... Trustee’s Counsel has never changed her position....”. The trial court never expressly ruled on the meet and confer issue, and we cannot resolve the parties’ factual dispute on appeal. Because we reverse the trial court on the merits of the discovery motions, this procedural issue may be addressed on remand.

The trial court implicitly found that John had failed to meet his burden of showing good cause for production of the documents he sought. In doing so it focused on John’s failure to “correlate any objections that have been asserted or any claims that you may have to the requested documents.” As we have discussed, however, we believe that the trial court applied an unduly narrow definition of “good cause” in this context, and failed to address John’s right to requested documents not just under the discovery statutes, but under the requirement of the Probate Code as well. It erred in doing so.

e. Information John is Entitled to Receive under the Probate Code

The types of information a beneficiary is ordinarily entitled to receive are enumerated in section 16063, including a statement of receipts and disbursements of principal and income and a statement of the assets and liabilities of the trust.²⁹ The trustee’s broader duty is to keep beneficiaries “reasonably informed, ” which means giving the beneficiaries complete and accurate information when requested and at reasonable times, and to tell the beneficiaries what is reasonably necessary in order to enable the beneficiaries to enforce any rights under the trust or to prevent or redress a breach of trust. (§ 16060; Restatement, supra, § 82.) The trial court therefore has the obligation to ensure that a beneficiary receives the information to which he or she is statutorily entitled to receive, and also has broad discretion to decide what additional information is (or is not) “reasonably necessary for the protection of the interests of the trustee or beneficiary” (§ 17202; Esslinger, supra, 144 Cal.App.4th at p. 528). It is this discretion that the trial court failed to acknowledge, and so far as the record reflects, apparently failed to exercise.

29 The information to which a remainder beneficiary is entitled on request under section 16061 is the information that is normally incorporated in an annual account under section 16063. (See Hartog & Dirkes, California Trust Practice (Matthew Bender 2009), § 8.06[4], pp. 8-30.2(5)-8.30.2(6).)

Recognizing the very real possibility (at least under the family circumstances evidenced in this record) that John may ultimately receive nothing whatever from any of the irrevocable trusts, John is nevertheless entitled to be “reasonably informed” and to the information that is “reasonably necessary” to enforce his contingent rights under the trust. This includes information about the assets, liabilities, receipts and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relative to the beneficiary's interest. (Hartog & Dirkes, California Trust Practice (Matthew Bender 2009), § 8.05[1] &[2], p.8-30.2(1), italics added.) Further, a proceeding to approve a trustee’s accounts “is the proper time and place for a beneficiary to raise the issue of the trustee’s neglect of duty or failure to properly discharge its office. [Citations.] Indeed failure to challenge the trustee’s accounting at that time would in all probability preclude any challenge at a later date and make everything in the accounts res judicata. [Citations.]” (Coberly, supra, 231 Cal.App.2d at p. 688; see also Estate of Howard (1976) 58 Cal.App.3d 250, 257.)

In assessing what information is reasonably necessary to enforce his contingent rights, and the information about the administration of the trusts that relates to his interests, we also observe that: 1) John has no present interest in the current income of any trust other than the Carpy Winery Trust, and 2) as the trustees correctly observe, John seeks in several instances information as to the operation of businesses in which the various trusts appear to hold only minority or passive interests. Beyond the information the Probate Code requires that John be provided, we emphasize that the trial court retains the broad discretion to determine, in light of these circumstances, what other requested information relates to John’s interest as a contingent remainder beneficiary and is reasonably necessary to permit him to protect that interest.

2. The Carpy Family Trust

In his January 2008 objections to the Carpy Trust accounting, John contended that he needed to “examine underlying support documentation in order to determine the accuracy of the accounting.”³⁰ The trial court instructed him to make more specific objections and to narrowly tailor his discovery requests to those specific objections. On May 22, 2008, John filed more detailed objections to the Amended Second Account. The trustee responded to some of these objections by filing its Supplement, and John then filed objections to the Supplement.

30 John also objected on the ground that the First Account included within the trustee’s Second Account had never been approved by a court. The trustee addressed that objection by filing an Amended Second Account on April 11, 2008, which combined the First Account and original Second Account into a single accounting for the period August 19, 1996 through September 30, 2007. The Amended Second Account rendered John’s first formal objection moot.

John’s objections to the accounting, and his discovery requests, largely pertain to: Carpy & Conolly and the Rutherford, Pescadero and San Luis parcels of real property; to C. Carpy & Co. and The Wine Country Inn; and to the sale of 2401 Main Street.³¹

31 Article Fourteenth of the Carpy Family Trust document provides: “After the death of the first of the Trustors to die and provided that the real property at 2401 Main Street, St. Helena, California (‘the residence’) is owned by the Trustors at the date of death of the first of the Trustors to die, Trustors’ children shall thereafter have the right of first refusal with respect to the purchase of the residence as follows: In the event the Trustee desires to sell the residence and obtains an offer for purchase of the residence, Trustors’ children in equal shares, or as otherwise agreed upon by them, shall have the right to purchase the residence at the purchase price and on the terms of sale of the offer. The trustee shall notify Trustors’ children of the offer by an instrument in writing, mailed or personally delivered to the children. The option to purchase must be exercised by the children by means of an instrument in writing delivered to the Trustee by mail or personal delivery within sixty (60) days of said notification.” (Italics added.)

The Supplement acknowledged that the trust owned parcels of real property, all of which were listed under “Carpy & Conolly” in the Amended Second Account and not separately identified. John alleges that the Rutherford property is a vineyard, that the Pescadero property is 1, 000 acres of unimproved land, and that the San Luis Obispo property is a 100-acre parcel. The trustee does not dispute these characterizations. The Supplement revised the accounting to list the trust’s interest in the Rutherford property as “Carpy-Conolly, ” and to list the trust’s interests in the Pescadero and San Luis Obispo properties separately. It also revised the allocation of these interests to the subtrusts. The Pescadero and San Luis properties were distributed in their entirety to the Marital Deduction Trust. The 50 percent interest in Carpy & Conolly (consisting of the Rutherford property) was distributed as follows: two percent to the Survivor’s Trust (worth $34,000), 39.176 percent to the Marital Deduction Trust (worth $666,000), 26.375 percent to the GST Exempt Trust (worth $448,375), and 32.449 percent to the Exemption Trust (worth $551,625). The only asset of the Exemption Trust, from which John is most likely to receive any ultimate distribution, is this fractional interest in the Rutherford property.

In his June 2008 request for inspection of documents, John asked for documents related to the organization of Carpy & Conolly, profit and loss statements, balance sheets, documents showing assets and liabilities, federal and state income tax returns, and documents identifying the entities’ employees. In support of his motion to compel, John wrote that because each businesses was “a family owned and/or controlled entity that is an asset of the trust, it is important for Objector to know how this entity operates, how the business has been conducted, how the profits and losses are calculated, what the assets were and presently are and how it reports its profits or losses in order for Objector to analyze and interpret the accounting filed by Petitioner.”

In his May 22, 2008 objections, John wrote that he believed C. Carpy & Co. (an asset of the Marital Deduction Trust) owned an interest in the Wine Country Inn. In his June 2008 request for production of documents, John requested documents for both C. Carpy & Co. and the Wine Country Inn during the period of the accounting: documents related to the organization of the entity (including entities with similar names), profit and loss statements, balance sheets, documents showing assets and liabilities, federal and state income tax returns, and documents identifying the entities’ employees. In his separate statement in support of his motion to compel, John alleged, “because [each entity] is a family owned and/or controlled entity that is an asset of the trust, it is important for Objector to know how this entity operates, how the business has been conducted, how the profits and losses are calculated, what the assets were and presently are and how it reports its profits or losses in order for Objector to analyze and interpret the accounting filed by Petitioner. Nothing in the account shows how any income or losses are calculated.”

The Supplement confirmed that the sole asset of C. Carpy & Co. was 50 percent of a 6.36 percent interest in the Wine Country Inn worth about $83,000. The Supplement also clarified that the separately-listed 0.15 percent interest in The Wine Country Inn worth about $3,900 (also an asset of the Marital Deduction Trust) was an ownership rather than a general partnership interest. The Amended Second Account reported that the Marital Deduction Trust received one $25,000 income distribution from its interest in C. Carpy & Co. during the accounting period (in 2002) and the Supplement did not revise this information.

Where a business is wholly operated by the trustee (and possibly in situations of significant management control), the Probate Code requires a trustee’s annual accounting pursuant to section 16062 to include a detailed schedule showing income and loss at the level of detail required by federal tax return schedules. (§§ 1061, 1062, subd. (c).) Where these statutory requirements do not directly apply, a beneficiary may still seek a report or account of business activities pursuant to section 17200, at a level of detail determined by the trial court in its discretion. (See Estate of Hershel (1959) 168 Cal.App.2d 658, 660 [while detailed accounting not required, beneficiary still has right to inspect trust records regarding its business interests].)

Both trust documents authorize the trustees to “participate in the operation of any business... at the risk of the trust estate which the Trustee considers appropriate or deems advisable.” The Probate Code similarly provides that a trustee has “the power to continue or participate in the operation of any business or other enterprise that is part of the trust property” (§ 16222, subd. (a)), and “the power to manage... trust property or any interest therein” (§ 16227). (See also Moeller, supra, 16 Cal.4th at p. 1132.) In exercising these powers, the trustee has the duty to “administer the trust solely in the interest of the beneficiaries” (§ 16002, subd. (a)), to deal impartially with the beneficiaries “in investing and managing the trust property” (§ 16003), to “take reasonable steps under the circumstances to... preserve the trust property” (§ 16006), and to “make the trust property productive under the circumstances and in furtherance of the purposes of the trust” (§ 16007). (See also Moeller, at p. 1132.) To the extent the partnership or business interests held by the trust carried with them powers to participate in the management of the partnership or business, the trustee had both the authority to exercise those powers and the duty to do so in the interests of the trust beneficiaries. The extent of any voting or management powers held by the trustees in any of the business entities is not self-evident from the trust documents or other evidence in the record. John has the right to determine the nature of the trusts’ partnership and business interests and, if those interests endow the trustee with management, voting or other powers related to partnership or business operations, to then seek a report or account or to inspect trust records to determine how those powers have been exercised.

a. Trust Documents

In his June 2008 request for inspection of documents, John asked for the Carpy Trust document and any amendments thereto, and documents related to the creation of the subtrusts. In a separate statement in support of his motion to compel, John wrote, “Objector is entitled to inspect the original of the trust in comparison to the copies provided by Petitioner.” Regarding the request for documents creating the subtrusts, he wrote that he was entitled to the documents because they affected his interest in the trust.

“Except as provided in Section 16064, ³² on reasonable request by a beneficiary, the trustee shall provide the beneficiary with... the terms of the trust.” (§ 16061, italics added.) “ ‘[T]erms of the trust’ means the written trust instrument of an irrevocable trust or those provisions of a written trust instrument in effect at the settlor’s death that describe or affect that portion of a trust that has become irrevocable at the death of the settlor. In addition, ‘terms of the trust’ includes, but is not limited to, signatures, amendments, disclaimers, and any directions or instructions to the trustee that affect the disposition of the trust. ‘Terms of the trust’ does not include documents which were intended to affect disposition only while the trust was revocable.” (§ 16060.5.) “When a revocable trust or any portion of a revocable trust becomes irrevocable because of the death of one or more of the settlors of the trust, ... the trustee shall provide a true and complete copy of the terms of the irrevocable trust, or irrevocable portion of the trust, to any beneficiary of the trust who requests it and to any heir of a deceased settlor who requests it.” (§ 16061.5, subd. (a), italics added.)

32 Section 16064 provides: “The trustee is not required to report information or account to a beneficiary in any of the following circumstances: [¶] (a) To the extent the trust instrument waives the report or account, except that no waiver described in subdivision (e) of Section 16062 shall be valid or enforceable. Regardless of a waiver of accounting in the trust instrument, upon a showing that it is reasonably likely that a material breach of the trust has occurred, the court may compel the trustee to report information about the trust and to account. [¶] (b) In the case of a beneficiary of a revocable trust, as provided in Section 15800, for the period when the trust may be revoked. [¶] (c) As to a beneficiary who has waived in writing the right to a report or account. A waiver of rights under this subdivision may be withdrawn in writing at any time as to the most recent account and future accounts. A waiver has no effect on the beneficiary’s right to petition for a report or account pursuant to Section 17200. [¶] (d) Where the beneficiary and the trustee are the same person.” None of these exceptions applies in this case.

These probate statutes entitle John to true and complete copies of that part of the original trust instrument that described or affected the portions of the trust that became irrevocable upon Charles’s death, as well as any instruments creating the irrevocable subtrusts following his death.

b. Loan Documents and Tax Returns

In his June 2008 request for inspection of documents, John asked for documents related to loans made by the trust to any remainder beneficiary during the accounting period, and also for the trust’s federal and state income tax returns. In separate statements in support of the motions to compel, John wrote, “How trust affairs are handled is relevant information to a beneficiary. If loans are made to beneficiaries, it is relevant to know the terms and whether there has been or is ongoing repayment. If no loans have been made, a statement to that effect will resolve this issue.” Also, the tax returns would allow him “to compare items such as income and expenses to determine accurate reporting.”

Loans to beneficiaries appear to be covered by the requirements for a formal accounting set forth in section 1061, which requires the accounting to list all disbursements and all distributions to beneficiaries. The accountings submitted to the court indicate no such loans were made. The trustee can readily confirm this. Similarly, it should be a simple matter for the trustee to produce or allow John to inspect the trust’s income tax returns for the period of the accounting, and the information is relevant to John’s interests as a beneficiary.

3. The Carpy Winery Trust

a. Failure to File More Specific Objections

As a preliminary matter, we consider the trustees’ argument that John’s discovery requests were properly denied because John never filed more specific objections to the Final Account in response to the trial court’s May 2008 order. Written objections to an accounting are required to be specific and state the items in the account that are deemed objectionable. (Estate of Wacholder (1946) 76 Cal.App.2d 452, 455; Estate of Kirkpatrick (1952) 109 Cal.App.2d 709, 713.)

Although John did not separately file a new set of objections specifically directed to the Final Account of the Carpy Winery Trust, he raised objections to that accounting in his August objections to the Supplement to the Carpy Trust accounting. In those objections, he complained that he had not been provided “any information as to three key assets, the partnerships referred to as C. Carpy & Co., Carpy & Conolly, and Carpy Winery Trust” and argued he needed additional information to determine whether the trustee managed these assets properly. (Italics added.) That is, he raised the same objection to The Carpy Winery Trust that he raised to Carpy & Conolly and C. Carpy & Co. Moreover, John filed a separate statement in support of his motion to compel further discovery responses by the Carpy Winery Trust. In that statement, he argued, “[B]ecause it was a family owned and/or controlled entity that was an asset of the trust, it is important for Objector to know how this entity operates, how the business has been conducted, how the profits and losses are calculated, what [are] the assets and how it reports its profits or losses in order for Objector to analyze and interpret the accounting filed by Petitioner. Nothing in the account shows how any income or losses for the winery are calculated.”

The trial court did not deny John’s motion on the ground that he failed to file new objections to the Final Account under the court’s May 2008 order. Instead, the court provided a single rationale for denying the motions as to both trusts. The court denied the motions because “the objector’s separate statement doesn’t do anything to correlate any objections that have been asserted or any claims that you may have to the requested documents.” As we have discussed ante, in making its ruling the trial court failed to consider what documents John was entitled to receive as a matter of right, and did not appear to recognize its discretion under section 17200.

b. Trust Documents

In his June 2008 requests for production of documents, John asked for the original trust document and amendments or restatements thereto. In his statement in support of his motion to compel, John noted that, contrary to the trustees’ representation, the original trust document was not attached to the Final Account. The trustees had produced only the 1998 restatement of the document. As noted ante, the Probate Code requires a trustee to provide a beneficiary with the terms of a trust. (§ 16061.) “If a trust has been completely restated, ‘terms of the trust’ does not include trust instruments or amendments which are superseded by the last restatement before the settlor’s death, but it does include amendments executed after the restatement.” (§ 16060.5, italics added.) Because the 1998 restatement was executed after the death of Charles, who presumably was one of the trust’s settlors, it appears that the section 16060.5 exception does not apply. Therefore, the trustee should have been ordered to produce the original trust document and amendments or restatements of that document for inspection.

c. Cancelled Checks

In his statement in support of his motion to compel, John wrote, “Objector questions the distributions reported on the [Final Account] as being paid to Objector, ” and he asked to inspect the cancelled checks to confirm the payments. This discovery demand is directly related to John’s objection and seeks information he is entitled to as beneficiary and trustor of the trust.

d. Freemark Abbey Winery Partnership Documents

John also requested the partnership agreement of the Freemark Abbey Winery and every accounting the partnership provided to its partners. In his statement in support of his motion to compel, John argued “because it was a family owned and/or controlled entity that was an asset of the trust, it is important for Objector to know how this entity operates, how the business has been conducted, how the profits and losses are calculated, what [are] the assets and how it reports its profits or losses in order for Objector to analyze and interpret the accounting filed by Petitioner. Nothing in the account shows how any income or losses for the winery are calculated.”

The trustee for The Carpy Winery Trust argued, “We are not the partnership. We simply were a method of holding title which no longer exists. And so it was a way... for the checks to be deposited in one place instead of the partnership issuing five or six checks and that’s all that that was about.” So far as the record reflects, the revocable Carpy Winery Trust always held only the limited partnership interests of the trustors/beneficiaries, which definitionally lacked management and control of the Freemark Abbey Winery.

Whether or not other family members may have held management or control positions in the winery partnership is not relevant to the question of whether the trust held such control. John is, however, still entitled to the trust documents relating to income, as well as reports and accountings, received by the trust from the winery partnership, and to documents received by, or executed by, the trust in connection with exercise of the limited partnership rights of the trust, and in connection with the sale of its interest in the winery.

e. Other Trust Financial Documents

John also sought state and federal income tax returns, ³³ profit and loss statements, balance sheets, documents showing assets, liabilities, and the trust’s employees, and documents related to the sale of the trust.

33 Regarding his request for the trust’s tax returns, John wrote that the trustees’ privacy and privilege objections did not apply to him, as he is both trustor and residuary beneficiary of the trust. The trial court did not rule on this claim of privilege and we will not do so for the first time on appeal.

The parties agree that the trust’s interests in Freemark Abbey Winery were sold in 2001. The Final Account shows the trust had no assets as of 2007, and the trustees informed the trial court that the trust “terminated on August 25, 2004, and a final income tax return for the Trust was filed the following year.” Because the trust has effectively terminated and this is a final accounting, John has a right to at least inspect trust records to confirm the information in the accounting. Having wound up its operations, John will have no future opportunity to exercise his right to information about the trust. The trial court’s blanket denial of John’s information requests was not justified.

With respect to all of the subject trusts, the court must ensure that John receives at least the basic information to which he is entitled as a beneficiary. The court must further consider the reasonableness of his other requests, as well as the burden on the trustees, in assessing what information is required for the protection of his interests, and must exercise its discretion accordingly.

III. Disposition

The orders approving the accountings are vacated, the order denying John’s motions to compel is reversed, and the matters are remanded for further proceedings consistent with this opinion. Each party to bear its own costs.

We concur: Jones, P. J., Needham, J.

“a. Documentation of receipts in 1989 and in 1996, by the Trust;

“b. Schedule ‘A’ at time of creation of Trust in 1989 and any and all changes to Schedule ‘A’ from 1989 until the death of Charles A. Carpy in 1996[;]

“c. All documents, including appraisals, relating to the fair market value of 2401 Main St., St. Helena, CA at time of sale[;]

“d. All documentation relating to the sale of the [sic] 2401 Main St., St. Helena, CA including the proceeds of the sale;

“e. All documents related to the notification to beneficiaries, including proof of receipt, of decision to sell the [sic] 2401 Main St., St. Helena, CA by the Trustee;

“f. Documentation related to the value of Carpy\Conolly and its assets including tax returns, bank statement appraisals, all grape contracts with wineries, vineyard management contracts, any lease agreements, and the distribution of all profits generated by the assets held by Carpy\Conolly to any and all its Partners from 1995 to the present;

“g. Documentation related to the value of C. Carpy & Co. and its assets including tax returns, bank statement appraisals, all grape contracts with wineries, vineyard management contracts, any lease agreements, and the distribution of all profits generated by the assets held by Carpy\Conolly to any and all its Partners from 1995 to the present;

“h. Any and all minutes of meetings and each accounting the Wine Country Inn provided to it’s [sic] Partners from 1995 through to the present[.]”

Regarding the Carpy Winery Trust, John requested:

“a. A copy of THE CARPY WINERY TRUST created in 1995;

“b. The Limited Partnership Agreement of Freemark Abbey Winery of which the Carpy Winery Trust was a partner;

“c. The complete annual accounting that Freemark Abbey Winery provided the Carpy Winery Trust each year from 1995 to date[;]

“d. Minutes of all partnership meetings of The Carpy Winery Trust from 1995 to date;

“e. All partnership tax returns prepared for The Carpy Winery Trust for each individual Trustor and/or beneficiary from 1996 to date;

“f. All canceled checks made payable to John Carpy from 1995 to date[;]

“g. All correspondence from Freemark Abbey Winery to its Partners from 1996 to date;

“h. All documents relating to the decision to sell The Winery Trust’s interest in Freemark Abbey Winery including the trustees’ notice to trustors and beneficiaries of the decision to sell and the acceptance of the offer to purchase;

“i. All documentation relating to any and all benefits, beyond the stated purchase price, provided to all limited partners of Freemark Abbey Winery and to all trustees, beneficiaries and trustors of the Carpy Winery Trust; and

“j. All bank statements and cancelled checks of the Carpy Winery Trust from 1995 to the present.”

In his May 22, 2008 objections, John wrote, “Article Fourteenth of the Carpy Trust gives JOHN, and his other siblings thereafter, a first right of refusal to purchase the Carpy family home in St. Helena. The home was sold without JOHN having been advised of, nor given an opportunity to exercise, said first right of refusal.” In his June 2008 request for inspection of documents, John asked for documents related to the purchase, sale, or transfer of real property, including 2401 Main Street, including appraisals and the escrow closing statement. In his statement in support of his motions to compel, John wrote that the property was sold without notification to him in violation of the terms of the trust document. John does not aver that he and his siblings jointly sought to exercise any right of first refusal, or that there was any agreement to exercise the right in anything other than equal shares, nor does he allege that he had any ability to purchase the property at the time that it was sold-he alleges that he receives public assistance.

This property was also not an asset of any of the irrevocable trusts. John is therefore not entitled to this information as a matter of right, but only subject to the court’s discretion. (See Evangelho v. Presoto, supra, 67 Cal.App.4th at pp. 623–624.)