Senator Feinstein’s Family Feud Over Money Set for Private Talks

A judge ordered a high-stakes family feud over the finances of US Senator Dianne Feinstein, the powerful 90-year-old California Democrat, to be moved out of court for private negotiations.

(Bloomberg) — A judge ordered a high-stakes family feud over the finances of US Senator Dianne Feinstein, the powerful 90-year-old California Democrat, to be moved out of court for private negotiations.

Since early this summer, the fight has been playing out publicly between the families of two of San Francisco’s storied power brokers: Feinstein, who built a political dynasty over decades, and her wealthy husband Richard Blum, the co-founder of private equity firm Blum Capital Partners, who died last year and left much of his fortune to her in a marital trust. 

At a hearing Monday in San Francisco, retired Judge Roger T. Picquet told lawyers for both sides, “I love making decisions, don’t get me wrong.” But private mediation, he said, where the two parties work our their differences outside of court, often produces more satisfying results. 

“If any case deserves an honest appraisal of mediation, this case does,” he said.

The dispute centers on how trustees are handling the Blum marital trust, whose beneficiaries include his three daughters from his prior marriage. Feinstein’s daughter from an earlier marriage, Katherine Feinstein, has attacked those trustees in lawsuits, claiming in part that they engaged in “elder financial abuse” for withholding $169,055 in medical expenses requested by her mother. 

Deteriorating Health

While the judge urged a settlement, the hearing signaled the two sides have a long way to go to resolve their differences. If the case ends up going to trial, it threatens to tear apart Feinstein’s family as her health has deteriorated after a bout of shingles, forcing her to be absent from the Capitol for months this year and prompted calls from some in her own party for her to resign.

Katherine Feinstein has argued that the trustees haven’t properly funded the trust or made required distributions because they “intend to benefit Richard Blum’s daughters, who stand to inherit millions of dollars that should go to Senator Feinstein.” 

Katherine Feinstein, a former San Francisco judge, has asserted power of attorney for her mother. She wants to force the trustees to sell the senator’s share of a $5.6 million beach house in a gated community in Marin County, north of the city.

Read More: Dianne Feinstein Briefly Hospitalized After Fall at Her Home

The trustees have argued they did nothing wrong because they were still considering the senator’s other sources of income and support before deciding whether to pay her costs, including health care. 

They say Feinstein also wanted the trust to pay $9,166 in monthly salary for her security guard and caretaker. She is worth more than $50 million and gets about $1 million in income a year, including $500,000 from another trust set up by Blum, according to an Aug. 30 court filing.

‘Daughter’s Avarice’

Steven P. Braccini, a lawyer representing the trustees, told Bloomberg News the lawsuits filed by Katherine Feinstein have nothing to do with her mother’s needs “and everything to do with her daughter’s avarice.” The trustees acted “ethically and appropriately at all times,” Braccini said. “The same cannot be said for Katherine Feinstein.”

Claims that the trustees refused to pay her mother’s medical expenses are untrue, he said in a court filing. They’re designed to “create a media spectacle and distract from the only relevant inquiry,” which is “who are the duly appointed trustees of the 1996 marital trust?” he said.

Beyond shingles, the senator’s medical complications included encephalitis, which is swelling of the brain. In July, she appeared confused and had to be prompted to vote by an aide during a committee meeting. She won’t seek re-election next year.

At Monday’s hearing, Picquet asked Braccini why the senator hasn’t received any payments from the trust since Blum died in February 2022. Braccini said the marital trust is “extremely complicated” and he doesn’t yet know the liability for estate taxes. 

Financial Information

The hearing primarily focused on Katherine Feinstein’s demand for the trustees to sell the house in Stinson Beach. Hartog said it should be sold immediately because it’s not producing income for the trust because it’s expensive to maintain. 

In response, Braccini said the trust must consider whether renting is a better option. Braccini said that task is tougher because Katherine Feinstein has barred the trustee from the property. 

At the end of the hearing, the judge said he’d consider handing the matter over to a mediator, if both sides seemed receptive. 

“I’m not going to do it if both parties are sitting there with arms crossed,” he said. 

The senator’s daughter appeared to budge, indicating she was open to talks. Picquet ordered the two sides to mediation by Dec. 11 and to report back to him by Jan. 22. 

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