When a Trustee Sued Personally Cannot Bill the Trust for Personal Defense: The McKinley v. Harris Case

This is a where a trust beneficiary files a lawsuit against a trustee in both her official capacity and her individual, personal capacity the Trustee wins the dismissal of the lawsuit, and then asks the probate court to make the trust pay for her personal attorney fees.

Can a trustee who is sued in her individual capacity recover personal defense fees using the probate court's broad equitable powers? A 2026 California court case called McKinley v. Harris answers with a firm no.

What Happened in the McKinley Case?

Andrew McKinley was a beneficiary of a family trust that held two hotels in San Clemente. His sister, Erin Harris, served as a co-trustee alongside her husband.

Andrew filed a petition under Probate Code section 850, accusing Erin and her husband of delaying trust administration and attempting to sell the hotels to fund personal business opportunities. Importantly, Andrew sued Erin in both her capacity as a trustee and in her individual capacity.

After some legal maneuvering, Andrew withdrew his recorded lis pendens and dismissed his petition without prejudice.

Following the dismissal, Erin filed two separate motions for attorney fees. One motion sought fees incurred in her official capacity as a trustee. A second motion—the focus of this case—sought over $83,000 in attorney fees she personally incurred in her individual capacity defending against Andrew's claims. She argued that the probate court had broad equitable powers to award her fees out of trust assets because Andrew's petition was allegedly filed in bad faith.

The probate court denied her individual fee motion, ruling that it lacked the authority under equity or statute to award personal attorney fees to a trustee sued in an individual capacity. Erin appealed.

What Did the Court Decide?

The California Court of Appeal affirmed the lower court's decision, ruling against the trustee.

The appellate court clarified the limits of a probate court's equitable powers:

• Probate courts protect the trust, not personal assets: While a probate court has broad equitable power to protect a trust estate and allocate fees incurred for the benefit of the trust, it does not have the power to protect a trustee's personal assets or pay for a trustee's private defense.

  
  

• Bad-faith fee-shifting requires a direct threat to the trust: Existing legal precedents allow probate courts to charge a bad-faith beneficiary's share of the trust when that beneficiary brings an unfounded proceeding against the trust. However, when a lawsuit targets a trustee in her individual capacity rather than the trust itself, those equitable rules do not apply.

  
  

• The American Rule governs: Under California law, each party must bear its own attorney fees unless a specific statute or contract provides otherwise. Because Erin could point to no statute, contract, or trust provision authorizing a fee award for her individual defense, her request failed.

  
  

The court emphasized that a trustee sued personally must look elsewhere for indemnification or personal defense funding rather than treating the trust as a personal slush fund for individual litigation.

The Big Lesson

A probate court's equity powers are designed to safeguard trust estates and administer estates according to law—not to bail out trustees who incur personal legal bills defending themselves in their individual capacities.