Table of Contents
What Is a Trustee in California?
Core Fiduciary Duties of a Trustee
Types of Trusts a Trustee May Manage
Day-to-Day Responsibilities of a Trustee
Common Pitfalls and Trustee Liability
How The Grossman Law Firm Can Help
Key Takeaways
- Trustees have the legal authority and a fiduciary duty to manage trust assets for the beneficiaries in accordance with the trust’s terms.
- California law imposes strict standards on trustees, including duties of loyalty, impartiality, and transparency.
- Trustees must regularly account, report, and communicate with beneficiaries.
- Breaching fiduciary duties can result in removal or personal liability.
- The Grossman Law Firm helps beneficiaries understand their rights and hold trustees accountable when they fail to meet legal standards.
What Is a Trustee in California?
A trustee is the person or institution legally responsible for managing and administering a trust for the benefit of the beneficiaries. In California, a trustee must follow both the terms of the trust document and the California Probate Code.
A trust is typically created when the settlor (also called the trustor or grantor) transfers property into a trust. The trustee then takes control of those assets and manages them according to the trust’s instructions.
At The Grossman Law Firm, we help beneficiaries understand what their trustee should and should not be doing. If you haven’t received copies of the trust or aren’t getting updates, that could be a warning sign that your trustee isn’t fulfilling their obligations.
Core Fiduciary Duties of a Trustee
Under California law, trustees owe beneficiaries several key fiduciary duties. These legal obligations ensure transparency, fairness, and accountability.
Primary Duties Include:
- Duty to Administer the Trust: Follow the trust’s instructions and act in accordance with the law.
- Duty of Loyalty: Act solely in the beneficiaries’ best interests, not for personal gain.
- Duty of Impartiality: Treat all beneficiaries fairly, regardless of their interests.
- Duty to Account: Provide regular and accurate accounts to beneficiaries.
- Duty to Furnish Information: Respond to reasonable beneficiary requests for information.
- Duty to Avoid Conflicts of Interest: Prevent any action that benefits the trustee at the expense of the trust.
- Duty to Disclose: Inform beneficiaries about material facts that affect their rights or interests.
Related Resource: 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties
Types of Trusts a Trustee May Manage
Trustees in California may be responsible for different types of trusts, each with specific legal requirements.
Common Types Include:
- Revocable Living Trusts: Created during the settlor’s lifetime, and can be changed or revoked. The settlor often serves as the initial trustee.
- Irrevocable Trusts: Cannot be modified after creation; the trustee must strictly follow the trust’s terms.
- Testamentary Trusts: Established through a will and take effect after the settlor’s death, often during probate.
Each type of trust imposes different responsibilities and reporting duties on the trustee.
Day-to-Day Responsibilities of a Trustee
Serving as a trustee involves ongoing management and careful decision-making. Daily responsibilities typically include:
- Asset Management: Protecting and prudently investing trust property.
- Recordkeeping: Maintaining detailed records of transactions, correspondence, and trust activity.
- Beneficiary Communication: Keeping beneficiaries informed and responding to reasonable requests.
- Accounting & Reporting: Preparing annual or periodic accounting and required tax filings.
- Distribution of Assets: Making timely and accurate distributions according to the trust’s terms.
- Conflict Resolution: Managing disputes between beneficiaries in an impartial and professional manner.
Trustees who neglect these responsibilities risk violating the law and harming beneficiaries.
Common Pitfalls and Trustee Liability
Even well-intentioned trustees can make costly mistakes. Common violations include:
- Failing to provide the required accounting
- Favoring one beneficiary over another
- Mismanaging trust investments or assets
- Ignoring tax obligations or deadlines
- Failing to disclose potential conflicts of interest
California courts can remove trustees, surcharge them for losses, or hold them personally liable for breaching their fiduciary duties.
If you believe your trustee is misbehaving, The Grossman Law Firm can help you review the trust, identify breaches, and take appropriate legal action.
Related Resources
- Overview of California Trust Litigation
- Can a Trustee Be Removed for Mishandling Assets?
- Irrevocable Trust Beneficiary Rights in California
- Duties of a Trustee of an Irrevocable Trust
- Trustee Duties: Understanding the Trustee Standard of Care
- 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties
- Can’t Afford a Probate or Trust Attorney?
FAQ
What happens if a trustee doesn’t follow the trust?
They can be removed, sued, or ordered to repay damages to the trust and beneficiaries.
Can a trustee also be a beneficiary?
Yes. However, the trustee must still act impartially and avoid conflicts of interest.
How often should a trustee communicate with beneficiaries?
Trustees must respond to reasonable requests and provide regular updates, especially when accounts are due.
Can beneficiaries remove a trustee?
Yes. Beneficiaries can file a petition in probate court to remove a trustee for cause, such as misconduct or breach of fiduciary duty.
Is a trustee entitled to payment?
Yes. Trustees are generally entitled to reasonable compensation unless the trust specifies otherwise.
How The Grossman Law Firm Can Help
If you’re a California beneficiary who believes your trustee isn’t fulfilling their duties—or you’re unsure what those duties are—don’t wait to seek legal guidance. Delays can result in lost assets, missed distributions, or diminished trust value.
At The Grossman Law Firm, we’ve spent decades helping beneficiaries enforce their rights, hold trustees accountable, and recover what’s rightfully theirs.
Call (888) 443-6590 or fill out our Get Help Now form.
Our Intake Specialists can evaluate your case to assess your situation at no cost to you. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published: October 17, 2023