Sixth District Has a Nice Discussion of Probate Code Provisions Allowing Fee Recovery in Trust Administration Activities (Even After Trustee Is Discharged).
Estate of Gill, Case No. H03629 (6th Dist. May 4, 2012) (unpublished) is a case where an attorney son trustee had to fight some trust administration diversion claims brought by two of his brother beneficiaries of a parent’s trust. (We bloggers would note that probate and family disputes seem to bring out very poignant emotions in litigants.)
Above: Wolf attacking animal. Charles Livingston Bull, artist. 1874-1932. Library of Congress.
Trustee son was vindicated when the probate court determined that there was no diversion of trust moneys, eventually awarding him $213,274.18 in attorney’s fees for the trust administration disputes (about a $92,000 or 30% reduction in the requested fees).
Brothers appealed, but the appellate court said “not so fast,” you did not overcome the hard-to-surmount abuse of discretion review standard for the fee award.
The appellate court noted that fee entitlement is allowed in numerous Probate Code provisions, including those allowing for attorney’s fees incurred by a trustee after discharge. (See, e.g., §§ 16247, 16243, 15684(a), 15644 [the latter being applicable even after discharge].) The problem for brothers is that they could not show that the fee award was an abuse of discretion, given the findings that had been no misadministration of the trust (meaning the fees were incurred for trust rather than personal purposes) and that the amount awarded after a 30% reduction was some mistake (a claim forfeited by brothers due to the lack of a developed argument on the subject). See Kasperbauer v. Fairfield, 171 Cal.App.4th 229, 234-235 (2009) [abuse of discretion standard applicable].
BLOG UNDERVIEW--Son was also awarded $123,277 in fees for his personal services over a 17 year span, which totaled about $7,300 per year. Son introduced testimony from a probate referee showing these fees were reasonable, supplemented by the fact that normal trustee 1% administration fees based on the trust corpus would have totalted $510,000. This one shows that some good deeds do not get punished.