Dispute over Feinstein family fortune intensifies as lawyers argue

Sen. Dianne Feinstein’s family feuds over the extreme wealth left by her late husband, Richard Blum, were on full display in a San Francisco courtroom for the first time Monday, before a judge ruled orders private mediation that will extend the case into next year.

As multiple motions filed in court in recent months already show, the dispute involves millions of dollars in assets and several valuable properties, including a multimillion-dollar beach house north of San Francisco and a mansion in the city worth more than $20 million. Blum died in February 2022.

Katherine Feinstein, the senator’s daughter from a previous marriage and who has power of attorney for her 90-year-old mother in legal matters, argued that her mother owed millions of dollars in disbursements from Blum’s estate and that she had need this money now to cover medical costs. Blum’s administrators said his estate was incredibly complex and investment-related, and they needed more time to assess his assets, tax obligations and debts before making substantial disbursements.

The hearing provided no answers as to how those assets will ultimately be disbursed, but made one thing clear: the various parties — the Democratic senator from California, her daughter, the trustees overseeing Blum’s estate and the three daughters de Blum from a previous marriage – do not see eye to eye and continue to communicate poorly behind closed doors, even on the most basic issues.

Neither the senator nor the administrators appeared in court. Katherine Feinstein appeared via video link, as did the Blum sisters’ attorney.

Retired San Luis Obispo County Superior Court Judge Roger Picquet, specially assigned to hear the case after San Francisco judges recused themselves from the case, began the hearing by asking the parties whether the mediation was acceptable to everyone or whether it would “misrepresent people”. weapons” by commanding it.

Usually, when such cases cannot be mediated privately and a judge must intervene, neither party leaves happy, Picquet said.

Steven P. Braccini, a lawyer for the Blum trustees, said he agreed the case “required private mediation” but that Katherine Feinstein — a former San Francisco judge — “disagreed.” .

John Hartog, an attorney for the Feinsteins, immediately pushed back, saying Braccini was “mistaken” and that his clients were “more than happy” to mediate.

But, he added, the Feinsteins also wanted other things in the meantime.

Hartog asked Picquet to order trustees to sell the couple’s Stinson Beach home — in which the senator and Blum’s estate each own a 50 percent stake — and place the proceeds in an escrow account so the interest can be won while the mediation takes place.

He also asked Picquet to order the trustees to provide a full account of their work handling the estate so far, so that the proposed mediation can be more productive.

The requests echoed arguments Katherine Feinstein made on behalf of her mother in the underlying petitions, in which she claimed her mother had been left in the dark over trust matters and wanted to sell the Stinson Beach property because she didn’t use it anymore and didn’t want to. continue to pay for maintenance.

Hartog said trustees have a fiduciary duty to make “unproductive properties productive,” which requires the sale of the Stinson Beach home. Failure to do so, Hartog said, would have detrimental tax implications for the senator.

“There’s no question that it costs money to maintain the property,” Hartog said.

Braccini responded by asserting that Katherine Feinstein has produced no evidence to date as to why selling the Stinson Beach house was the appropriate decision to make financially, so her arguments fail.

He said trustees were still trying to determine Blum’s estate tax and debts. He said the appraisal of the Stinson Beach house was also made difficult because Katherine Feinstein or someone on her behalf had “excluded (the trustees)” from the house – something Hartog denied.

Braccini said Katherine Feinstein used the argument that her mother, who was wealthy and independent, needed disbursements from Blum’s estate to pay for medical bills as a “pretext” to demand out-of-pocket costs, and that there was no had “no evidence of what the senator wants” on file.

Feinstein’s health has been a major political issue in recent months, with critics suggesting she is too frail to do her job. She was hospitalized earlier this year with shingles and also suffered from encephalitis, a brain swelling that caused her to miss dozens of votes. She still requires care and has repeatedly appeared confused in public, but is now back in Washington and expected to continue helping Democrats confirm President Biden’s proposed liberal judges as voting members of the powerful Judiciary Committee. Senate.

The dispute over her husband’s assets has exposed Feinstein’s private affairs in the latest chapter of a long, otherwise distinguished political career. She has been a member of the Senate since 1992 and was previously mayor of San Francisco.

Feinstein’s office declined to make her available to speak about the litigation, calling it a private matter.

Picquet asked several questions during Monday’s hearing, including whether it was reasonable for Feinstein to expect some sort of disbursement — even if it didn’t come from the sale of the Stinson Beach house — given that more than a year has passed since her husband’s death. .

To that, Adam Pines, attorney for the Blum sisters, said the Stinson Beach property was “unique” and there were other ways to disburse funds to the senator without selling the house.

For example, Pines said, Feinstein currently owns about 83 percent of his primary residence in San Francisco — a three-story mansion on the steps of Lyon Street, just off the Presidio, that has been appraised at more than $21 million – while Blum’s estate owns the remaining stake.

The Blum estate’s minority share in the Lyon Street house is worth more than its 50 percent share in the Stinson Beach house, Pines said, and what is owed in out-of-pocket expenses to the senator could perhaps be paid in the form of an additional percentage of property on Lyon Street. house rather than through the sale of the Stinson Beach house.

Pines’ argument suggested that the Blum sisters had an interest in keeping the Stinson Beach house.

After hearing all parties, Picquet refused to order the sale of the house, but ordered private mediation and ordered the trustees to provide the Feinsteins with at least a partial account of the estate and their work until present to resolve it.

“We have to account for a certain credibility,” Picquet said.

In consultation with the parties, Picquet also set a timetable requiring mediation to be concluded by December 11, unless an extension is requested, and a second hearing to be held on January 22. That timeline will apply to the three separate motions filed in the case, he said.

Lawyers for the trustees and the Feinsteins declined to comment after the hearing.