Legal Battle Over Feinstein's Late Husband's Assets Heads to Mediation

A dispute between Sen. Dianne Feinstein and the trust overseeing her late husband Richard Blum’s sizable estate will head to mediation, a process both sides agreed to at a San Francisco court hearing on Monday.

The agreement means that, for now at least, the lawsuits over Blum’s estate will not be tussled over in court; instead, both sides will sit down privately with a mediator to try to reach an agreement.

At issue are three lawsuits filed by Feinstein’s daughter, Katherine Feinstein, on behalf of her mother that challenge the trust established after the 2022 death of Blum, a prominent San Francisco investment banker and Katherine Feinstein’s stepfather.

The main suit alleges that the trustees have refused to disperse money to Sen. Feinstein, including to pay for her recent medical bills. It also accuses the trustees of elder abuse — for withholding resources from Sen. Feinstein — and of pursuing a course of action that would ultimately result in improperly funneling millions of dollars to Blum’s daughters rather than to Sen. Feinstein.

The second suit seeks to name Katherine Feinstein as a trustee, while the third is aimed at forcing the trust to sell a vacation home in Stinson Beach owned by Blum and Sen. Feinstein.

At Monday’s hearing, Judge Roger Picquet urged the parties to enter into a process known as mediation, emphasizing that both sides would be happier with that outcome, as opposed to pursuing the case in court.

“I believe matters resolved by the parties themselves are often more satisfying than a jury making decisions,” said Picquet, a retired superior court judge from San Luis Obispo County who came to San Francisco to hear the case because Katherine Feinstein is a retired San Francisco judge, which posed a potential conflict of interest.

“If any case deserves an honest look or appraisal of mediation, this case does,” Picquet added.

Feinstein, 90, the oldest sitting member of Congress, has allowed her daughter to take the lead in this dispute, granting her power of attorney. Last week, the longtime Democratic senator told the San Francisco Chronicle that she delegated this authority to her daughter so she can focus on her work. But there are serious concerns about Feinstein’s health and mental acuity. This spring, soon after announcing she would not run for reelection in 2024, Feinstein was hospitalized for shingles and missed months of work.  And in August, she was briefly hospitalized again after suffering a fall at her home in San Francisco.

While most trust cases move forward without public attention, this one has been watched closely, both because of Feinstein’s age and political stature, and because Blum was extraordinarily wealthy; some estimates place his net worth north of $1 billion.

Lawyers for the trustees — former Blum business partners Michael Klein and Marc Scholvinck — immediately agreed to mediation. And while Feinstein’s attorney, John Hartog, also agreed, he asked the court, in the meantime, to compel the trust to sell the Stinson Beach property, arguing that the asset is “unproductive” financially and that Sen. Feinstein no longer wants it.

But Judge Picquet noted that renting out the property, as the trustees have suggested, could potentially be even more lucrative than it would be to sell it. Ultimately, he said, the question of what happens to that home, as well as another property co-owned by Blum and Feinstein in San Francisco, will all go before the mediator.

The mediation is set to take place in November, and the parties will be back in court in January to update the judge on its progress.