Reasonable Attorneys' Fees may be Paid out of a Trust

    Being named the trustee of any trust is a serious obligation, one which may open you to litigation. In California, the Appellate Court recently ruled in 2010 that in order to recover attorneys' fees incurred during the course of litigation from the assets of the trust, the fees must be reasonable in amount, reasonably necessary for the conduct of the litigation and reasonably appropriate for the benefit of the trust. (Donahue v. Donahue (2010) 182 Cal.App.4th 259)
    In this instance, a trustee was taken to court for alleged breaches of trust where the trustee was represented by four attorneys and a paralegal from two separate firms.  While the Appellate court did not have sufficient details from the trial court to specify the amount of the fee award and its basis the Appellate court made the above stated  determination regarding the reasonableness and necessity of the fees incurred. Therefore, any trustee involved in serious litigation must keep stringent records and be able to justify a basis for their legal fees. If you live in the California area and have further questions about trustee responsibilities and litigation you should consult with an experienced probate and trust attorney.
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