New Trust Case: Beneficiary Can Recover Attorneys' Fees

Leader v. Cords (California Court of Appeal, 4th District, March 23, 2010)

Trust beneficiaries brought an action against the trustee for his failure to make trust distributions. The trustee refused to make trust distributions until a collateral dispute between the trustee and the beneficiaries was globally resolved. At least in part the collateral dispute involved jewelry that was not part of the trust estate. The trial court ordered the trustee to distribute one half of the trust estate to the beneficiaries and the other one half to himself.

The beneficiaries then petitioned to recover their attorneys’ fees under Cal. Probate Code section 17211(b), which the trial court denied. The appellate court reversed, holding that recovery of attorneys’ fees under section 17211(b) should be viewed broadly. Section 17211(b) can allow recovery of attorneys’ fees in a contest or dispute over a trustee’s account. In this case the beneficiaries brought an action for breach of fiduciary duty based on the trustee’s failure to distribute trust assets. Viewing section 17211(b) broadly, the appellate court held that the beneficiaries were entitled to recover their attorneys’ fees under section 17211(b) because the trustee’s account disclosed the trust’s assets and liabilities showing that the beneficiaries were entitled to a distribution for which they petitioned. In other words, the beneficiaries were entitled to recovery of attorneys’ fees under section 17211(b) because their petition for distribution and breach of fiduciary duty at least in part related to the trustee’s account.

Regards,
Dave Tate, Esq.
http://davidtate.us