Paley estate blames BofA in trust distribution tiff.

The estate of Jacob Paley, an early executive with 20th Century Fox, has sued Bank of America Corp., alleging that the bank mismanaged a $13.5 million trust and waited more than a year to distribute the assets to its executor.

The trust belongs to the estate of Jacqueline Paley Wolber, the daughter of Jacob Paley, who died in 2001 and left her husband, Richard Wolber, 67, of Lakewood, Colo., as executor.

Jacob Paley, the uncle of CBS founder William S. Paley, established the trust for his daughter in 1937, two years after the formation of 20th Century Fox.

Wolber claims Bank of America breached its fiduciary duty by taking too long to distribute the trust, charging excessive fees and sustaining $1.5 million in stock market losses during the period after Jacob Paley died but before the trust was distributed.

The case is scheduled for trial in Orange County Superior Court later this month.

Estate lawyers said such cases are rare because few beneficiaries sue trustees, which are legally allowed to use proceeds from the trust to defend themselves in court. In this case, Bank of America set aside $125,000 of the Paley trust for lawyers, Wolber claims.

Despite the rarity of lawsuits, it is not uncommon for trust distributions to lead to bruised feelings, because of the amount of money involved.

"The brokerage departments and trust companies are notorious for delays in turning over assets to successors or delaying distributions," said William Gamble, a private fiduciary and professor at Cal State Fullerton. Gamble, who once worked for Bank of America, is an expert witness for Wolber's side.

Bank of America claims it could not distribute assets of the trust until Jacqueline Paley's 1997 will withstood potential probate contests in both California and Colorado.

The bank also was aware that her children, whom she disinherited, are involved in separate litigation over another trust.

(In the 1990s, Jacqueline Paley's two children from an earlier marriage sued to exclude two adopted siblings from a separate trust. They won, and that case is currently on appeal. In her 1997 will, Paley earmarked about half the money in the Bank of America-held trust to animal rights groups and other charitable causes.)

"There were any number of unknown risks," said Randolph Godshall, a partner at Sheppard Mullin Richter & Hampton in Costa Mesa, who represents Bank of America. "There is a period of time where a trust is subject to a contest and no trustee in his right mind would ever make a distribution, even a partial distribution, during that contest period."

Lawrence M. Lebowsky, a lawyer for Wolber, said he believes Bank of America was driven by the desire to collect additional fees from the trust and was simply reluctant to give up the money. Banks typically calculate trust fees based on a percentage of assets, with pricing tiered for large accounts.

Bank of America is one of the nation's largest providers of trust services, with $52 billion under management.