Attorney’s fees are often one of the most misunderstood aspects of litigation, especially in the context of trust and estate disputes. Beneficiaries often come to us with frustrations over how the system works, and we addressed these concerns in the latest episode of our podcast, Ask 2 Lawyers. You can catch the full conversation on our YouTube channel here.
When you’re named as a beneficiary in a will or trust, it seems straightforward: you should receive the inheritance stated in black and white. But reality can be much more complicated. Disputes arise, trustees resist distributions, or other beneficiaries contest the terms—and you’re left hiring an attorney to fight for what’s yours. This process often leaves beneficiaries frustrated because even if they win, they face significant costs.
The American Rule on Attorney’s Fees
In the United States, each party pays their own attorney’s fees, win or lose. This principle, known as the American Rule, contrasts with the English Rule, where the losing party pays the winner’s legal fees. While this might seem unfair, it’s the foundation of our legal system.
If you’re entitled to $2 million under a trust but must spend $200,000 in attorney’s fees to secure it, you’re effectively left with $1.8 million. And that’s only if you win outright. In most cases, litigation doesn’t end with a simple trial win. Settlements and compromises often further reduce what beneficiaries ultimately receive.
Why Settlements Are Common
Settling a case has several advantages. First, it provides finality. Litigation can take years to resolve, especially in trust and estate cases where appeals are common. For example, we discussed the
Key v. Tyler case on the podcast—a trust dispute that lasted over a decade due to multiple appellate court rulings.
Second, settlements eliminate risk. Even with strong facts, no case has a 100% chance of success at trial. A judge or jury might rule against you for reasons beyond your control. By settling, you secure a guaranteed outcome rather than gambling on an uncertain future.
Finally, settlements save on costs. Trial preparation involves hiring expert witnesses, taking depositions, and preparing evidence—all of which add up quickly. For instance, engaging a forensic physician to testify on issues like capacity or undue influence can easily cost $100,000 or more.
Attorney’s Fees in Context
The issue of attorney’s fees isn’t unique to trust and estate litigation. In personal injury cases, plaintiffs often pay their lawyers a percentage of their recovery, typically around 40%. Similarly, in business disputes, each side bears their own legal costs unless a contract specifies otherwise. Unfortunately, standing up for your rights—no matter the legal field—usually comes with a price tag.
The Psychology of Litigation
One of the most intriguing aspects of litigation is the psychological impact of financial expectations. As we discussed, receiving $1 million should feel like a windfall. But if you expected $2 million and walk away with $1 million after legal fees and compromises, it can feel like a loss.
This phenomenon was explored by author Nassim Nicholas Taleb in his book Antifragile. Taleb explains that people perceive outcomes based on relative expectations rather than absolute results. The disappointment of “losing” half of a $2 million inheritance can overshadow the relief of gaining $1 million you didn’t have before.
A Different Perspective
One way to reframe the issue of attorney’s fees is to think of your inheritance as a gift that comes with challenges. It’s like inheriting a house worth $2 million but with a $500,000 mortgage. On paper, the gift is worth $2 million, but the reality is more complex.
While it’s frustrating to pay legal fees to claim what’s rightfully yours, the ultimate goal is to resolve the dispute and secure the best possible outcome. Sometimes that means compromising and accepting less than the full amount stated in the trust or will. In the end, achieving closure and moving forward with your life can be worth more than the money.
For a deeper dive into this topic, check out the full discussion on our Ask 2 Lawyers podcast episode here. We cover the nuances of attorney’s fees, settlements, and why litigation often unfolds the way it does. Don’t forget to subscribe to our channel for more insights into trust and estate law.
Albertson & Davidson, LLP has focused on trust and will litigation for over 18 years. We are the leading contingency trust and will litigation firm in the State of California. Our attorneys have successfully handled hundreds and hundreds of trust and will litigation cases and have obtained over $300 million in verdicts and settlements for our clients. We have the talent and we have the resources to handle your case.
