Litigation Paid Off? Recovering Your Attorney Fees from the Trust Under the Common Fund Doctrine

As a Beneficiary of a California Trust or Estate, discovering a Breach of Trust or realizing assets are missing can be deeply concerning. You know action is needed, but the prospect of expensive litigation and mounting attorney’s fees can be daunting, especially if other beneficiaries are sitting on the sidelines. The good news? Under specific circumstances, California law allows the very fund you helped create or protect to pay your legal bills, thanks to the Common Fund Doctrine.

As a Beneficiary of a California Trust or Estate, discovering a Breach of Trust or realizing assets are missing can be deeply concerning. You know action is needed, but the prospect of expensive litigation and mounting attorney’s fees can be daunting, especially if other beneficiaries are sitting on the sidelines. The good news? Under specific circumstances, California law allows the very fund you helped create or protect to pay your legal bills, thanks to the Common Fund Doctrine.

Typically, in American litigation, each party pays their own attorney’s fees, regardless of who wins (the “American Rule”). However, courts recognize this isn’t always fair, particularly in trust and estate matters. Imagine you spend significant time and money suing a third party to recover assets for the trust, or challenging a Trustee’s improper actions, thereby increasing the funds available for all beneficiaries. Should you alone bear the cost while everyone else reaps the rewards?

The Common Fund Doctrine provides an equitable exception. It allows a litigant whose efforts successfully create, preserve, increase, or “rescue” an identifiable fund of assets for the benefit of others to have their reasonable attorney’s fees and costs paid directly out of that common fund before it’s distributed. The rationale is simple: prevent the unjust enrichment of passive beneficiaries who benefit from the litigation without contributing to its expense.

Typically, in American litigation, each party pays their own attorney’s fees, regardless of who wins (the “American Rule”). However, courts recognize this isn’t always fair, particularly in trust and estate matters. Imagine you spend significant time and money suing a third party to recover assets for the trust, or challenging a Trustee’s improper actions, thereby increasing the funds available for all beneficiaries. Should you alone bear the cost while everyone else reaps the rewards?

The Common Fund Doctrine provides an equitable exception. It allows a litigant whose efforts successfully create, preserve, increase, or “rescue” an identifiable fund of assets for the benefit of others to have their reasonable attorney’s fees and costs paid directly out of that common fund before it’s distributed. The rationale is simple: prevent the unjust enrichment of passive beneficiaries who benefit from the litigation without contributing to its expense.

To successfully recover fees under the Common Fund Doctrine in California, you generally need to demonstrate these four elements to the Probate Court:

1. Identifiable Fund Created or Preserved: Your legal action must have resulted in a tangible, identifiable pool of assets (money or property) being brought into or preserved within the trust or estate.
2. Essential Efforts: Your efforts (and those of your attorney) must have been a primary and essential reason the fund was created or preserved. Simply participating isn’t enough; your action needs to be demonstrably causal.
3. Benefit to Non-Participants: The fund created or preserved must benefit others beyond just yourself – typically, other beneficiaries who did not actively participate in or financially contribute to the litigation that secured the benefit.
4. Not Acting as Fiduciary: You must have undertaken the litigation in your capacity as a beneficiary (or other interested person), not in your official role as the acting Personal Representative or Trustee (who have separate avenues for seeking fees as expenses of administration).

To successfully recover fees under the Common Fund Doctrine in California, you generally need to demonstrate these four elements to the Probate Court:

1. Identifiable Fund Created or Preserved: Your legal action must have resulted in a tangible, identifiable pool of assets (money or property) being brought into or preserved within the trust or estate.
2. Essential Efforts: Your efforts (and those of your attorney) must have been a primary and essential reason the fund was created or preserved. Simply participating isn’t enough; your action needs to be demonstrably causal.
3. Benefit to Non-Participants: The fund created or preserved must benefit others beyond just yourself – typically, other beneficiaries who did not actively participate in or financially contribute to the litigation that secured the benefit.
4. Not Acting as Fiduciary: You must have undertaken the litigation in your capacity as a beneficiary (or other interested person), not in your official role as the acting Personal Representative or Trustee (who have separate avenues for seeking fees as expenses of administration).

Courts sometimes use the phrase “benefit for all beneficiaries.” This can be confusing, especially if your lawsuit targeted another beneficiary (like forcing an Executor or Trustee who is also a beneficiary to return misappropriated funds). The key is that your action benefited the trust or estate as a whole by increasing the total assets available for distribution according to the governing instrument, even if the defendant beneficiary’s individual share is ultimately reduced. The focus is on enriching the common pot for the class of beneficiaries entitled to it.

Courts sometimes use the phrase “benefit for all beneficiaries.” This can be confusing, especially if your lawsuit targeted another beneficiary (like forcing an Executor or Trustee who is also a beneficiary to return misappropriated funds). The key is that your action benefited the trust or estate as a whole by increasing the total assets available for distribution according to the governing instrument, even if the defendant beneficiary’s individual share is ultimately reduced. The focus is on enriching the common pot for the class of beneficiaries entitled to it.

Generally, the fees recoverable under the Common Fund Doctrine are for the work done to create or preserve the fund itself. The doctrine typically does not allow you to recover additional attorney’s fees incurred specifically in litigating your entitlement to the fees (often called “fees on fees”).

Generally, the fees recoverable under the Common Fund Doctrine are for the work done to create or preserve the fund itself. The doctrine typically does not allow you to recover additional attorney’s fees incurred specifically in litigating your entitlement to the fees (often called “fees on fees”).

The Common Fund Doctrine empowers beneficiaries to act as “private attorneys general” for the trust or estate. It makes pursuing valid claims financially feasible by allowing the successful recovery of fees from the very benefit created, ensuring that those who step up to protect the integrity of the trust aren’t unfairly penalized financially while passive beneficiaries enjoy a free ride.

The Common Fund Doctrine empowers beneficiaries to act as “private attorneys general” for the trust or estate. It makes pursuing valid claims financially feasible by allowing the successful recovery of fees from the very benefit created, ensuring that those who step up to protect the integrity of the trust aren’t unfairly penalized financially while passive beneficiaries enjoy a free ride.

If you have successfully concluded litigation that resulted in the recovery or preservation of assets for a California trust or estate, you may be entitled to have your attorney’s fees paid from that fund. Navigating a common fund fee request requires demonstrating the necessary elements to the court.

Burrey Law Group has extensive experience representing beneficiaries in trust litigation and pursuing attorney fee recovery under the Common Fund Doctrine. We can evaluate your situation and advocate for fair reimbursement from the fund you helped secure.

Contact Burrey Law Group today for a confidential consultation.

If you have successfully concluded litigation that resulted in the recovery or preservation of assets for a California trust or estate, you may be entitled to have your attorney’s fees paid from that fund. Navigating a common fund fee request requires demonstrating the necessary elements to the court.

Burrey Law Group has extensive experience representing beneficiaries in trust litigation and pursuing attorney fee recovery under the Common Fund Doctrine. We can evaluate your situation and advocate for fair reimbursement from the fund you helped secure.

Contact Burrey Law Group today for a confidential consultation.