Case Number: BC497249    Hearing Date: August 01, 2014    Dept: 97

Superior Court of California
County of Los Angeles
Department 97

ALLEN CUI, a minor, by and through his guardian ad litem, HAIDONG CUI, et al.
Plaintiffs,
v.

NO PARK, et al.,
Defendants.
Case No.: BC 497249

Hearing Date: August 1, 2014, continued from June 27, 2014

[TENTATIVE] ORDER RE:
PETITIONS TO APPROVE COMPROMISE OF DISPUTED CLAIMS OF MINORS
On June 27, 2014, the Court heard and provisionally granted the Petition of Claimant Allen Cui to approve compromise of disputed claim of minor, and the Petition of Claimant Alex Cui to approve compromise of disputed claim of minor, pending review by the probate department. Because these settlements provide for the creation of Statutory Minor’s Trusts, the matter was forwarded to the probate department.
The probate department reviewed the proposed Statutory Minor’s Trusts prepared for Allen Cui and Alex Cui, and found that they complied with all relevant Probate Code sections and California Rules of Court. Thus, except as discussed below, the proposed trusts are approved.
Of concern is appointment of the minors’ parents as trustees, as they will not qualify for the required bonds if they are appointed without limitations. The proposal of allowing the parents access to only a limited amount of cash so that they will qualify for bonds, leaves the substantial remaining assets under the exclusive control of Morgan Stanley. As Morgan Stanley would not be expressly subject to the Court’s jurisdiction, there would be no redress for decisions made by that entity.
The Court recognizes that the parents are trying to preserve the trust assets for their children, and that this may be the reason for opting not to appoint a professional fiduciary as trustee. However, the Court believes it is in the best interest of the minors to have a trustee who has discretion over all of the trust assets and who will bear full liability if anything goes wrong. For that reason, the Court will provide final approval for the trusts only if such trustee is appointed. Plaintiffs’ counsel is urged to discuss this matter with his clients and with Mr. Winslow, who should be able to assist in locating a professional fiduciary or financial institution to act as trustee.
If a financial institution is appointed, no bond is required. If a professional fiduciary is appointed trustee, and as a condition of the Court signing the order establishing the trusts, the Court requires the trustee to file a bond for each trust with the Court. The initial bond required for the Alex Cui trust will be $666,000 and the initial bond for the Allen Cui trust will be $1,062,000, as indicated in the Winslow declaration. The bonds must be filed by August __, 2014. To establish case numbers for the ongoing administration of the trusts, the trustee is ordered to file “Notice of Commencement of Proceeding for a Court Supervised Trust” for each of the trusts on Local Form PRO 044 with the probate department and to do so within 60 days after the Court’s signing of the order establishing the trusts. Separate case numbers will be required for each of the minor’s trusts. The trustee is ordered to attach a copy of the order establishing the trust and a copy of the bond to each of the PRO 044s.
The trustee is ordered to file the first accountings under the newly established probate case numbers no later than 12 months from the date of the order establishing the trusts. The probate department will set OSCs under each new case number upon the filing of the PRO 044s to track the Trustee’s compliance.