Can Executors Use Estate Funds for Defense

Emily just received a terrifying email from her brother, David. He’s the executor of their mother’s estate, and a disgruntled aunt is filing a lawsuit, claiming Mom’s will is a forgery. David wants to hire a lawyer—a good one—but is worried about depleting the estate’s assets to pay for it. He’s asking if he can even use estate funds for the defense.

This is a common concern, and thankfully, the answer is generally “yes,” but with very important qualifications. As an estate planning attorney and CPA with over 35 years of experience, I’ve seen countless estates ensnared in litigation. What many executors don’t realize is that defending the estate is a legitimate fiduciary duty, and often required by law.

What Types of Legal Expenses Are Typically Covered?

Generally, estate funds can be used to pay for legal fees and costs associated with defending the validity of the will itself. This includes:

• Will Contests: If someone challenges the legality of the will’s signing, witness requirements, or allegations of fraud.
• Trust Disputes: If the trust is attacked for ambiguities or improper administration.
• Probate Complications: When issues arise concerning asset valuation, creditor claims, or beneficiary disputes.
• Accountings: Preparing and defending formal accountings filed with the court.

These costs can quickly add up. A complex will contest can easily run tens of thousands of dollars – or even more. That’s where my CPA background becomes critical. Proper estate planning anticipates potential challenges and structures assets to minimize tax implications and maximize the assets available for defense. The step-up in basis afforded by proper estate valuation, for instance, can free up capital that would otherwise be lost to capital gains taxes if assets were sold to cover legal bills.

When Can an Executor Not Use Estate Funds?

This is where things get tricky. The Probate Code § 8250 makes a crucial distinction between defending the estate and defending the executor’s personal actions.

An executor is generally entitled to use estate funds to defend the validity of the will (Probate Code § 8250). However, if they are defending against their own removal for misconduct, they may have to pay their own legal fees unless they win.

For example, if David is accused of self-dealing or embezzlement, the estate cannot pay his attorney’s fees for defending against those charges. He’s acting in his own self-interest, not in the best interest of the estate. If he successfully defends himself, he might be able to seek reimbursement from the estate, but that’s not automatic.

Another important point: Fees must be “reasonable.” The court will scrutinize excessive or unnecessary legal expenses. Documentation is key—keep detailed records of all invoices, and obtain court approval for significant expenses when possible.

What if the Executor Made a Mistake?

Sometimes, an executor’s errors lead to litigation. For instance, if David improperly distributed assets or failed to pay taxes on time, the estate might be sued. In this case, the estate can still generally use funds for defense, but it’s likely the beneficiaries will have a stronger claim for seeking accountability from David personally.

What About Disputes Between Beneficiaries?

Unfortunately, estate funds usually cannot be used to pay for legal battles between beneficiaries. If Emily wants to sue David over a disagreement about asset distribution, she’s responsible for her own legal fees. This is why clear communication and a transparent estate administration are so vital.

• Beneficiary Disputes: Disagreements among heirs typically require individual counsel at each party’s expense.
• Internal Conflicts: Litigation stemming from personal grievances or interpretations of the will.
• Lack of Estate Interest: These types of disputes don’t directly defend the validity of the estate itself.

What causes California probate cases to spiral into delay, disputes, and extra cost?

The path through California probate is rarely a straight line; it requires precise adherence to statutory deadlines, accurate asset characterization, and strict fiduciary compliance. Without a clear roadmap, what begins as a standard administrative proceeding can quickly dissolve into a costly battle over interpretation, valuation, and beneficiary rights.

A stable probate administration outcome usually follows from clarity, consistency, and readiness for court review, especially when multiple stakeholders and competing interpretations are involved. When documentation supports enforcement and timelines are respected, families are less likely to face preventable escalation.

Verified Authority on California Probate Litigation

• Double Damages (Bad Faith Taking): California Probate Code § 859
  The “nuclear option” of probate litigation. If the court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to the estate, the judge may assess liability for twice the value of the property, in addition to recovering the asset itself.
• Grounds for Removal of Executor: California Probate Code § 8502
  This statute lists the specific legal reasons a judge can fire a Personal Representative. Common grounds include wasting or mismanaging assets, neglecting the estate (moving too slow), or having an incurable conflict of interest with the beneficiaries.
• The “850 Petition” (Title Disputes): California Probate Code § 850
  Probate litigation often revolves around ownership. This powerful petition allows the probate court to solve title disputes without filing a separate civil lawsuit. It is used when an asset is titled to a third party but belongs to the estate (or vice versa).
• Presumption of Undue Influence (Caregivers): California Probate Code § 21380
  To prevent elder abuse, California law makes it incredibly difficult for paid caregivers to inherit from their patients. The law presumes the gift was the result of undue influence, forcing the caregiver to prove their innocence in court, often requiring a “Certificate of Independent Review.”
• Civil Discovery Rules Apply: California Probate Code § 1000
  Probate is not just administrative; it is a court of law. This code section confirms that the standard rules of civil practice apply. This means litigators can use interrogatories, depositions, and demands for production of documents to build their case against a rogue executor.
• Extraordinary Fees (Litigation Costs): California Probate Code § 10811
  Litigation is not covered by the standard statutory fee. Attorneys can petition the court for “extraordinary fees” for litigation services (e.g., defending a will contest or recovering stolen property). These fees are billed hourly and must be approved by the judge.