Eva had used her authority as trustee to sell his mother’s home. Eva’s daughter was the buyer. She had put ten percent down and Eva had provided a 10-year note secured by a deed of trust for the remaining purchase price. Eva gave her daughter the money for the down payment. The price was below fair market value, and his mother owed substantial capital gains taxes that could have been avoided if she had held the property until she died.
The only ones who benefitted, Dave’s lawyers would argue, were Eva and her daughter. Eva’s attorney said the transaction was reasonable because Eva was paying an interest rate higher than what Dave’s mother would have received from most other investments.
Many months after the transaction, a court appointed neuropsychiatrist deemed his mother incapable of testifying at trial.