Short answer: sometimes — but only when the defense clearly benefits the underlying trust- not the amendments that favor one beneficiary over the other.
California courts draw a hard line between defending the trust and defending the person’s interest in the trust. You can look at these two cases to see what happens when trustees cross that line.
How two cases shaped the rules for trustee legal defense
California law holds trustees to strict fiduciary standards. They can only use trust money to protect the existence of the underlying trust, not themselves or amendments subsequent to the underlying trust. This rule started with Whittlesey v. Aiello and was reinforced in Zahnleuter v. Mueller.
Whittlesey v. Aiello (2002) set the standard
Dorian M. Aiello served as the successor trustee of the James Bertram McAdams Trust. He used trust funds to defend a trust amendment that increased his own share.
The court said no.
- The defense helped the trustee
- The court denied his request to use trust money for legal fees
- He had to repay the trust out of pocket
This case set the rule: trustees cannot use trust funds to defend actions that benefit them personally.
Zahnleuter v. Mueller (2023) Reinforced the Rule
Thomas Mueller became trustee under the third amendment to the Mueller family trust. That amendment changed how assets would be distributed among family members.
A beneficiary challenged the amendment. Mueller used trust funds to defend it.
The court said no citing the following:
- The trustee supported one group of beneficiaries over others
- He failed to stay neutral during the dispute
- The trust did not authorize him to defend amendments
- The court invalidated the amendment and upheld a surcharge for the legal fees
Even though Mueller had no personal stake in the outcome, the court ruled that trustees must act as neutral parties. Defending one version of the trust over another broke that duty.
Trust funds defend the existence of the trust, not the modifications that favor the trustee’s interest in a subsequent amendment
Trustees must act for the trust’s benefit not their own. Use trust funds for legal defense only with court approval or risk personal liability and breach of fiduciary duty. Likewise, estate planners and fiduciaries should proactively address these issues in trust documents. Seek legal advice before engaging in litigation.