Shelton v. Larson, Case No. G050935 (4th Dist., Div. 3 July 13, 2016) (Unpublished).
In this first one, trustee’s fees and attorney’s fees incurred by trustee were denied altogether in disputes with trust beneficiaries, further complicated by the fact that the probate court never determined the trustee engaged in willful misconduct or gross negligence. This one got reversed and remanded because trustees generally are awarded attorney’s fees in contests involving accountings or beneficiary objections, unless some bad conduct is involved—not the situation here, so some fees were justified. (See, e.g., Prob. Code, §§ 16243, 15684(a).) Justice Thompson penned the 3-0 panel decision.
Mechanics Bank v. Hink, Case No. A145963 (1st Dist., Div. 5 July 13, 2016) (Unpublished).
This second case involved a situation where a trust income beneficiary successfully litigated a challenge to her status and entitlement to trust payments by a remainder beneficiary. The lower court granted about $66,000 in attorney’s fees to income beneficiary, payable out of the trust principal. The remainder beneficiary challenged the fee award, which was a good challenge (at least for the time being). The appellate court overturned the award, finding no equitable basis for it given that the result only benefitted the income beneficiary—meaning that such a beneficiary usually bears her own fees in the absence of recognized challenges to trustee actions, which were not involved here. However, this one was remanded to see if fees should be paid from trust income pursuant to a discretionary payment provision in the trust instrument, an issue not confronted below. (Estate of Marre’s, 18 Cal.2d 191, 192-193 (1941).)