Reserved power gave the settlor standing

The settlor of some chartiable remainder unitrusts retained the right to change the charitable beneficiaries, remove and replace the trustees, and to approve required annual accountings.

Three years after creation of the trusts, the court granted the settlor’s petition to remove the trustees but ruled that the settlor lacked standing to object to the trustees’ accounts because local law states that a “trustee or beneficiary” may initiate proceedings concerning the “internal affairs” of the trust.

The court in Patton v. Sherwood, 61 Cal. Rptr. 3d 289 (Ct. App. 2007), upheld the removal but reversed the dismissal of the objections holding that statutory language defining the beneficiary of a charitable trust to include any person entitled to enforce the trust applies to the settlor because of the retained power to approve accountings.