The Public Guardian of Los Angeles County has filed a complaint against Susan Talbot, seeking permission to sell a single-family home as part of wrapping up a special needs trust. The complaint was filed by the Public Guardian in the Superior Court of Los Angeles County on May 29, 2024, with Susan Talbot named as the defendant.
The case revolves around a special needs trust established for Richard Talbot, who had a mild developmental disability and was receiving public assistance. Richard's father, Arthur Talbot, created the trust in 2011 to ensure that Richard's inheritance would not disqualify him from receiving public benefits. Arthur passed away in 2012, leaving his property to Richard, which then became part of the trust managed by the Public Guardian.
Richard lived in a three-bedroom home in Hacienda Heights, California until his condition worsened and he was placed under conservatorship in 2016. He died intestate (without a will) on December 19, 2018. At the time of his death, the trust had outstanding debts amounting to $66,056.32 owed to the Public Guardian for trustee fees and related court costs. The trust's assets included $29,887.95 in cash and the house valued between $720,000 and $760,000.
Susan Talbot opposed the petition filed by the Public Guardian on July 14, 2021, which sought authorization to sell the house to pay off these debts and distribute any remaining funds to her as Richard’s sole heir. Despite filing multiple objections and proposals over four hearings held until October 12, 2022, Susan's arguments were ultimately rejected by Judge Michael C. Small.
Susan initially argued that selling the house would render her homeless and proposed creating another special needs trust for herself or transferring title with a lien for unpaid debts—both suggestions were denied due to legal constraints and financial impracticality. She also suggested that extensive repairs be made to increase the home's sale value or that she be paid outright for perceived loss in property value due to neglect; these proposals were dismissed either as procedurally inappropriate or unlawful.
Judge Small ruled that under California law and the terms of the special needs trust, it was within the Public Guardian’s authority to sell the house to settle outstanding debts since cash assets were insufficient. He also noted that any sale would require court confirmation and invited Susan to file a petition if she believed there should be an offset due to alleged mismanagement.
Susan appealed this decision but faced an uphill battle as all relevant facts were uncontested: The validity of the special needs trust; entitlement of fees for services rendered by both trustee and counsel; trustee’s powers under California law including property disposal; and existing debt exceeding available cash assets.
The appeal court upheld Judge Small’s decision stating no abuse of discretion occurred since all actions taken aligned with legal obligations towards managing and dissolving trusts while ensuring proper debt settlement before distributing remaining assets.
Representing Susan Talbot are attorneys Robert L. Kern and Russell A. Dalton Jr., while Dawyn R. Harrison serves as County Counsel along with Laura Quinonez (Assistant County Counsel) and Selina Thomasian (Deputy County Counsel) representing Los Angeles County Office of Public Guardian.
Case ID: B325728