Third District Finds Advance Payment of Fee by Trustee for Trust Administration Work Was Proper.
Some judges, like the lower court, in the next case we discuss are under a misapprehension that trust administration attorney’s fees have to always be approved by the court and cannot be advanced by the trustee. That is simply not the law, according to the reversal of a lower court taking that very position in Bristol v. Clark, Case No. C062705 (3d Dist. Oct. 14, 2010) (unpublished).
There, trustee had advanced payment of some attorney’s fees for trust administration work performed by an attorney. The lower court did not like that because the advanced fees exceeded the amount of fees awarded in a prior probate proceeding producing a court-approved order for fee payment. The trial judge ordered the attorney to return the advanced legal fees. Attorney appealed, obtaining a reversal of the disgorgement order.
First, attorney did have standing because she would suffer a financial hit of an immediate, pecuniary, and substantial nature. (Marsh v. Mountain Zephyr, Inc., 43 Cal.App.4th 289, 293, 295 (1996).)
On the merits, the appellate panel concluded that the trustee did have authority to pay trust administration-related fees to attorney without prior court approval. Probate Code sections 16243 and 16249 authorize just that. Although other rules require prior court approval for payment of services rendered to the trustee in a personal capacity, the fees in this case related to trust administration work.