Pizarro v. Reynoso

Probate court did not err in charging the interests of two trust beneficiaries for the fees incurred by the trustee in defending against their unwarranted charges which were brought in bad faith and supported by false testimony, but the court did err by imposing personal liability on the beneficiaries for sums exceeding the amount of their interest in the trust.  Following Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328, this decision upholds a probate court’s order charging the interests of two trust beneficiaries for the fees incurred by the trustee in defending against their unwarranted charged brought in bad faith and supported by false testimony.  However, the decision reverses the judgment insofar as it imposed personal liability on the two beneficiaries for the payment of the trustee’s fees.  The court’s equitable power to surcharge a beneficiary’s interest in the trust stops at the limit of that interest.  The court cannot impose personal liability beyond the beneficiary’s interest in the trust.

California Court of Appeal, Third District (Nicholson, Acting P.J.); January 18, 2017; 2017 WL 192726

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