Trustees frequently need legal advice while administering a trust. Questions about interpreting the trust, selling property, responding to beneficiary requests, preparing an accounting, resolving tax issues, or defending litigation can all require professional assistance. For families in Ventura County, an important question is often whether the trustee must personally pay the lawyer or whether attorney fees may properly be paid from the trust.

California law generally gives a trustee authority to hire attorneys and other professionals to assist with trust administration. Probate Code section 16247 expressly authorizes a trustee to employ attorneys, accountants, appraisers, investment advisers, and other agents to advise or assist with administrative duties. A trustee is also generally entitled to reimbursement from trust property for expenses properly incurred in administering the trust.

That does not mean every attorney fee incurred by a trustee is automatically a proper trust expense. The purpose of the legal services matters. California trustee legal fees are more likely to be appropriate when counsel is advising the trustee about carrying out fiduciary responsibilities, protecting trust property, interpreting ambiguous provisions, addressing legitimate beneficiary disputes, or defending reasonable actions taken in the trustee's fiduciary capacity.

Problems can arise when the trustee's interests and the trust's interests diverge. For example, beneficiaries may object when trust assets are used primarily to defend alleged misconduct that benefited the trustee personally. Whether those expenses are ultimately chargeable to the trust can depend on the nature of the claims, the trustee's conduct, the benefit to the trust, the terms of the instrument, and any later findings made by the probate court. This is one reason trustees should maintain detailed legal invoices and records showing why professional services were required.

Beneficiaries sometimes assume that the existence of litigation means the trustee should immediately pay all attorney fees personally. That is not necessarily the rule either. Trustees have duties to administer and protect trust assets, and legitimate litigation may require a legal defense. The ultimate allocation of California trustee legal fees can therefore become an issue in an accounting, fee petition, surcharge proceeding, or other trust proceeding rather than being determined merely by which beneficiary filed the lawsuit.

Trustees should also distinguish attorney compensation from their own trustee compensation. The two involve different services and legal standards. Careful recordkeeping, properly categorized invoices, disclosure in accountings when appropriate, and a clear connection between the legal work and trust administration can significantly reduce later disputes over whether trust funds were properly used.

Key takeaways:

• California trustees generally have authority to retain attorneys when legal assistance is reasonably connected to trust administration.
• Payment from the trust is not automatically proper simply because the trustee hired the lawyer.
• Detailed records are important when beneficiaries later question whether legal expenses benefited the trust.

Helpful educational links:

• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=16247.
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=15684.
• https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=9.&chapter=4.&part=4.&lawCode=PROB

This article provides general information and is not legal advice. If a dispute has developed concerning attorney fees paid from a California trust, Call Westlake Law Group at (818) 444-2022. 30699 Russell Ranch Road, North Building, Suite 210, Westlake Village, California. Virtual consultations are available throughout Southern California.