Can the Trust Pay for My Lawyer? A Trustee's Guide to Hiring Legal Counsel in California
By Richard Watson, Esq. & Jacqueline Watson, Esq.
By Richard Watson, Esq. & Jacqueline Watson, Esq.
The letter arrived on a Tuesday, six days after the funeral, and it changed everything.
Maria Delgado had spent the better part of two weeks doing the quiet, unglamorous work of grief. She answered sympathy cards. She returned casserole dishes to neighbors. She sat at her mother's kitchen table—the same oak table where, thirty years earlier, her mother had signed the family trust—and sorted through a lifetime of papers, looking for insurance policies and bank statements and anything else that might help her make sense of what came next. Maria's mother had named her trustee. She had accepted the role the way most people do: out of love, without quite understanding what it meant.
Then the letter came. Certified mail, return receipt requested. Her brother, David, who had barely spoken to their mother in the last five years, had hired a lawyer. He was challenging the trust. He was demanding an accounting. He was, in the dry and clinical language of the legal system, contesting the trustee's authority to administer the trust estate.
Maria read the letter twice, set it down on the oak table, and asked herself the question that nearly every trustee in her position asks first: How am I going to pay for a lawyer to deal with this?
It is a deceptively simple question. And the answer, as with most things in the California Probate Code, is: it depends. The short version is this: yes, in most cases, the trust can pay for the trustee's lawyer. California law gives trustees broad authority to hire legal counsel and to pay those fees from trust assets. But that authority is not a blank check. It comes with sharp boundaries, and a trustee who crosses them may end up paying not just her own legal bills, but the other side's too.
This article explains where that authority comes from, where it ends, and what a trustee like Maria needs to know before she picks up the phone and calls a lawyer.
Where the Power Comes From
The first thing Maria should do—before she hires anyone, before she responds to her brother's lawyer, before she does anything at all—is pull out the trust document and read it. Carefully. Because the trust instrument itself is the primary source of a trustee's powers. (Prob. Code, § 16200.) Most well-drafted trusts contain a provision that explicitly authorizes the trustee to hire attorneys, accountants, and other professionals, and to pay them from trust assets. If Maria's mother's trust has such a provision, Maria's question is largely answered before she ever opens a statute book.
But suppose the trust document is silent on the subject, or suppose it's one of those bare-bones documents that says very little about the trustee's powers at all. This is where the California Probate Code steps in. The Legislature has given trustees a set of default powers that apply unless the trust instrument says otherwise, and three of those powers are directly relevant to Maria's situation.
First, Probate Code section 16247 gives the trustee the power to hire attorneys, accountants, and other agents to advise and assist her in carrying out her administrative duties. This is the most basic building block: the law recognizes that most trustees are not lawyers or accountants, and that they need professional help to do the job right.
Second, Probate Code section 16243 gives the trustee the power to pay reasonable compensation to employees and agents she hires for the care, administration, and protection of the trust. This is the flip side of the hiring power. It would make little sense to authorize a trustee to hire a lawyer and then deny her the ability to pay one.
Third, and perhaps most important for a trustee in Maria's position, Probate Code section 16249 gives the trustee the power to prosecute or defend actions, claims, or proceedings for the protection of trust property and of the trustee in the performance of her duties. This is the statute that says, in effect: if someone sues you over the trust, you have the right to defend the trust—and yourself—in court.
Courts have confirmed that these statutory powers are more than theoretical. In Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 235, the Court of Appeal held that Probate Code section 16247—the power to hire attorneys to assist in the administration of the trust—authorized the court to order attorney compensation paid from trust assets. The case involved a removed trustee who had hired counsel to prepare and defend his accounting, services that did not directly increase the trust's value. The court allowed the fees anyway, reasoning that the Probate Code is, in the court's words, "studded with provisions authorizing the trustee to hire and pay … attorneys to assist in trust administration." The statutory authority is broad, and it is real.
So far, so good. Maria has the authority—from the trust document, from the Probate Code, and from case law—to hire a lawyer and to pay that lawyer from trust assets. But here is where the story takes a turn.
The Catch
The power to hire a lawyer with trust money is real. But it is not absolute.
Every dollar a trustee spends on legal fees is a dollar that does not go to the beneficiaries—the people the settlor created the trust to protect. Courts know this. Beneficiaries know this. And a trustee who forgets this fundamental fact will find herself in serious trouble. The authority to pay legal fees from trust assets is always tethered to a single, overriding principle: the expenditure must benefit the trust and its beneficiaries, not the trustee personally.
The Court of Appeal explained this principle in Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221, 1229–1230. The underlying rule that guides the court in allowing costs and attorney fees from a trust estate, the court held, is that such litigation must be a benefit and a service to the trust. When a trustee hires a lawyer to defend the trust itself—to fend off a creditor's claim, to recover misappropriated trust property, to seek the court's guidance on how to interpret an ambiguous trust provision—those legal fees are properly paid from trust assets, because the litigation serves the trust's interests.
But when a trustee hires a lawyer to advance the trustee's own personal interests—or the interests of only some beneficiaries at the expense of others—those legal fees are the trustee's personal responsibility. The trust did not benefit from the trustee's partisanship, and the trust should not have to pay for it.
The court in Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1462–1464 drew this line with particular clarity. The case involved a family torn apart by competing trust instruments. The settlor's 1999 trust left everything to his wife, who was not the mother of his children. In 2001, the children took the settlor to a new lawyer and had a different trust instrument prepared, one that left everything to them. After the settlor died, the daughter named as trustee under the 2001 trust—who was herself a beneficiary of that instrument—used trust funds to pay for attorneys who defended the validity of the 2001 trust. The Court of Appeal held that those fees were not properly chargeable to the trust. The trustee, the court found, "ha[d] not participated in this litigation as a neutral trustee to defend the trust and protect its assets; rather, she ha[d] consistently pursued her own interests and those of her siblings." When a trustee takes sides in a dispute between beneficiaries, the trust's checkbook stays closed.
The distinction can be subtle, and it is worth pausing to see how it plays out in practice.
Drawing the Line
The following examples show how courts have generally drawn the boundary between litigation that benefits the trust and litigation that benefits only the trustee.
| Litigation Benefiting the Trust | Litigation Benefiting the Trustee Personally |
|---|---|
| Defending against a creditor's claim on trust assets | Defending against a well-founded claim of self-dealing or breach of trust |
| Prosecuting a claim to recover misappropriated trust property | A trustee-beneficiary who takes sides in a dispute over which trust instrument is valid (Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1462–1464) |
| Seeking court instructions on how to interpret an ambiguous trust provision | Defending an action to remove the trustee for misconduct |
| Defending a beneficiary's challenge to a distribution decision made in good faith | A trustee who takes a non-neutral position in a dispute between beneficiaries, even without a personal financial stake (Zahnleuter v. Mueller (2023) 88 Cal.App.5th 1294, 1307) |
There is a common thread in the right-hand column. In each of those scenarios, the trustee has stopped acting as a neutral fiduciary and started acting as a partisan—championing certain interests over others, or defending the trustee's own position rather than the trust's welfare. When that happens, the costs belong to the trustee, not the trust.
The Duty That Underlies It All
The benefit-to-the-trust rule is not an arbitrary technicality. It flows directly from the most fundamental obligations any trustee owes: the duty of loyalty and the duty of impartiality.
Under California law, a trustee must administer the trust solely in the interest of the beneficiaries. (Prob. Code, § 16002, subd. (a).) And when multiple beneficiaries have competing interests, the trustee must not take sides.
The Court of Appeal's recent decision in Zahnleuter v. Mueller (2023) 88 Cal.App.5th 1294, 1305–1307 illustrates just how seriously courts take this duty. In that case, the trustee was the settlor's brother, a man named Thomas who held no personal beneficial interest in the trust whatsoever. But Thomas's daughters did. When a beneficiary named Katherine challenged a trust amendment, Thomas used trust funds to defend the amendment—the same amendment that happened to benefit his daughters and other family members at Katherine's expense. The court surcharged Thomas $200,000 for the attorney fees he had spent, holding that he had failed to remain neutral in a dispute between beneficiaries. What makes the case striking is that Thomas was not lining his own pockets. His daughters were the ones who stood to gain. But the court held that the duty to remain neutral applies regardless of whether the trustee has a personal financial stake. A trustee who takes sides in a beneficiary dispute bears his own costs. Period.
Think of it this way. A trustee is not the owner of the trust's money. A trustee is its steward. The money in the trust belongs, in every meaningful sense, to the beneficiaries. When a trustee uses that money to fund litigation that favors one set of beneficiaries over another—or that defends the trustee's own conduct—the trustee is asking the very people who stand to be harmed to foot the bill. No court will permit that.
This does not mean that every claim against a trustee makes her legal fees a personal expense. It means that the nature of the claim matters. If a beneficiary files a baseless lawsuit and the trustee defends herself in good faith, the trust can generally pay for that defense, because defeating a frivolous claim protects the trust. But if the trustee has abandoned her role as a neutral fiduciary—if she has taken sides, or acted in her own interest, or failed in her duties—then the trustee's legal defense is her own problem.
What a Trustee Should Do
For a trustee like Maria, the practical takeaways are straightforward.
First, read the trust document carefully before you hire anyone. Look for the provision that addresses attorney fees and the trustee's authority to hire professionals. Understand what powers the settlor gave you—and what limits the settlor may have placed on those powers. The trust instrument is the first and best place to look for answers. (Prob. Code, § 16200.)
Second, consult with an experienced trust litigation attorney early in the process. The line between litigation that benefits the trust and litigation that benefits only the trustee is not always obvious, and the consequences of getting it wrong are severe. A trustee who pays personal legal fees from trust assets may be surcharged—ordered to reimburse the trust, out of her own pocket, for every dollar she should not have spent. A knowledgeable attorney can help you understand where you stand before you write the first check.
Third, keep meticulous records. Document every legal expense. Note the purpose of every invoice, the nature of every service rendered, and how that service benefited the trust. If a beneficiary later challenges your legal fees—and in contested trust matters, someone almost always does—your records are your best defense. The burden of justifying each disbursement falls on the trustee, and a trustee who can point to detailed, well-organized records is a trustee who has shown the kind of care and transparency that courts reward.
The Double-Edged Sword
Maria Delgado's situation is more common than most people realize. Across California, thousands of family members serve as trustees of their loved ones' trusts. Many of them are not lawyers or accountants or financial professionals. They are sons and daughters and spouses who said yes to a responsibility they did not fully understand, and who now find themselves navigating a legal landscape that can feel bewildering and hostile.
The law gives these trustees a meaningful power: the authority to hire competent legal counsel and to pay for that counsel from trust assets. It is a power that exists for a good reason—because the trust, and the beneficiaries it serves, are better off when the trustee has access to sound legal advice. A well-advised trustee makes better decisions, avoids costly mistakes, and keeps the trust on the course the settlor intended.
But the power is a double-edged sword. It comes paired with an obligation just as strong: the duty to use that power for the benefit of the trust, and never for the trustee's personal advantage. A trustee who remembers this principle—who keeps the beneficiaries' interests at the center of every decision, including the decision to hire a lawyer—is a trustee who is far less likely to find herself on the wrong side of a surcharge petition.
Maria put the letter down on the oak table, poured herself a cup of coffee, and opened the trust document to the section on trustee powers. She did not have all the answers yet. But she knew where to start looking. That is more than most people have.
If you are a trustee facing litigation—or if you have just been named as trustee and want to understand your rights and obligations before a dispute arises—Watson Law can help. Our attorneys focus their practice on California trust and estate litigation, and they have extensive experience advising trustees on the complex questions of attorney fees, fiduciary duties, and trust administration. Contact Watson Law today for a consultation.
Disclosure: The story of "Maria Delgado" is a composite illustration created for educational purposes. No real names have been used, and any resemblance to actual persons or events is coincidental. This article is provided for general informational purposes only and does not constitute legal advice. Every trust and every dispute is different. Nothing in this article creates an attorney-client relationship. If you are a trustee or a beneficiary involved in a trust matter, you should consult with a qualified attorney who can evaluate your specific circumstances.
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