cost of attorneys california

Flipping the Charge: Determining the Costs of Attorneys

The price of attorneys and determining who pays them are important issues in trust disputes. When a beneficiary brings a lawsuit against a trust or trustee, the beneficiary needs to be aware that, in some circumstances, the trust’s costs of the suit might be chargeable against the beneficiary.

If a beneficiary’s suit is determined baseless and without merit, or in bad faith, courts have determined that attorneys’ fees and costs incurred by the trust can be charged against the beneficiary’s share of the trust assets.  This can happen even though attorneys’ fees and costs from these types of disputes have not typically been charged against the beneficiary’s personal non-trust assets. Similarly, even though the standard is that a trustee’s attorneys is paid by the trust, in a case where a trustee brings a lawsuit with an unjustified position, the trustee can also be required to pay his or her own attorneys’ fees and costs, rather than having them paid by the trust.

In a recent case, Pizarro v. Reynoso, the court expanded its authority to charge the beneficiary’s share of the trust.  In Pizarro, the court held that the trust’s attorneys’ fees and costs can be charged against the trust share of the beneficiary even when the beneficiary had not filed or brought the lawsuit.  In Pizarro, the beneficiary initially agreed with the trustee. However, during the suit, the beneficiary changed to a position against the trustee and offered false testimony.  The court held that this was an act of bad faith by the beneficiary, thus causing the trust to incur further monetary losses. The court held that offering false evidence in litigation is a bad faith litigation tactic.

You can find a more formal summary of Pizarro v. Reynoso here.

Trust disputes require careful evaluation regarding an attorneys’ fees and costs, who pays them, and how they are charged. If you are involved in a contentious trust or estate administration or litigation, please contact our experienced attorneys for the advice you need.

David Tate
dtate@rroyselaw.com
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