Contingency fee agreements in California probate litigation and trust litigation cases
You have not received your rightful inheritance, you know you need to sue but you don’t have the money to fund your California probate litigation or trust litigation. What do you do? Look for a lawyer who accepts cases on a contingency fee basis.
A contingency fee agreement is a type of retainer agreement in which an attorney agrees to litigate your case without being paid until money or property is distributed to you. This can occur because the case settles, a judgment is rendered after trial, or an appeal has been won. When the case is concluded the lawyer is paid back all the money he or she advanced to pursue the lawsuit (e.g. filing fees, deposition costs, travel, certified copies of documents, court reporter fees, etc.) and gets a percentage of whatever is recovered. The percentage will vary but in California is usually between 33 1/3% – 50%.
Most law firms who do probate litigation and trust litigation only want to be paid for their work on an hourly basis. However, some firms will take cases on a contingency fee if the case is large enough (usually $500,000 or more) and the facts strongly support your case. Just because a firm offers contingency fee agreements does not mean every case can or will be taken on that basis.
Contingency fee agreements are well suited to will and trust contests. Typically, in a will or trust contest one or more children have been disinherited or have had their inheritance greatly reduced and one child is will receive the entire estate, or nearly all of it, under the challenged will or trust. In these cases, the child who will receive the bulk of the estate is in possession or control of the assets and can use them to hire an attorney to defend the challenged will or trust. The children who are contesting the will or trust have to use their own financial resources to fund their litigation. If they don’t have the financial resources to hire an attorney on an hourly basis then they are left with two choices. First, don’t file the case. Second, find a lawyer who will take the case on a contingency fee.
Contingency fee agreements can also work well where the beneficiaries want the executor or trustee to be removed. At first glance, this may appear to be a poor fit for a contingency fee agreement. In practice, this is often not the case. The executor or trustee removal is usually sought because the trustee is wrongfully taking trust or estate assets for themselves or is incompetently managing the assets. In either scenario, the beneficiaries have not received their inheritance and probably won’t until the current trustee is removed and a new trustee is installed. This type of probate or trust litigation can be time-consuming and expensive, just like a will contest or trust contest, and requires the litigants to take a risk on the outcome of the case. The executor or trustee has the benefit of using probate or trust assets to pay for their defense. The beneficiaries seeking removal have to pay the litigation cost out of their own pockets. This often leads beneficiaries to observe their inheritance is being used to pay for the executor or trustee’s lawyer but they have to pay out of their own pockets for their own lawyer. Beneficiaries who can’t or don’t want to fund the litigation but want a trustee or executor removed have the same choices as those contesting a will or trust: don’t file or get a lawyer to take the case on a contingency fee.
While most people in this position understand the merits and drawbacks of a contingency fee agreement, some people will protest that giving up a percentage of their inheritance is “too expensive.” It appears they have never done the calculation they actually confront. Namely, they can receive 100% of nothing or one-half to two-thirds of whatever is recovered.
There is no one right way to pay for the cost of probate or trust litigation. Each person must evaluate their own case and circumstances to determine if an hourly rate or contingency fee makes the most sense for them.