TrustTrust LitigationTrustee Duties

What Constitutes a Breach of Fiduciary Duty in California?

By March 10, 2026No Comments
breach of fiduciary duty California

Table of Contents

Key Takeaways

  • A fiduciary duty is one of the highest legal duties recognized under CA law.
  • The duty requires both an executor and trustee to act with loyalty, honesty, and good faith.
  • A breach may occur when a fiduciary engages in self-dealing, misuses trust assets, withholds important information, or fails to properly manage property.
  • When a breach occurs, California courts may impose remedies such as financial damages, removal, or repayment of profits obtained through improper conduct.

What Is a Fiduciary Duty?

A fiduciary duty is a legal obligation to the estate. It means an executor or trustee must put the beneficiaries first and handle the trust with honesty, loyalty, and sound judgment — not personal interest.
Under California law, fiduciary relationships arise when one party places significant trust and confidence in another. The fiduciary must then put the beneficiary’s interests ahead of their own. This is not a casual obligation. It is the law and enforceable in court.
The Grossman Law Firm represents beneficiaries all across California when trustees fail to meet their obligations. TGLF steps in to help. Attorney Scott Grossman is a litigation attorney focusing exclusively on probate and trust litigation, helping heirs and beneficiaries protect their rights.

Fiduciary Duties Under California Law

California courts generally recognize several core fiduciary duties applicable to trust and estate administration.
In California, trustees and other fiduciaries are expected to follow several core duties when managing trust or estate assets.

Duty of Loyalty

Fiduciaries must act in the best interests of the beneficiaries. They cannot place their own interests ahead of the trust. This includes avoiding self-dealing unless the transaction is fully disclosed and properly authorized.

Duty of Care

Fiduciaries are expected to manage trust assets with reasonable care and sound judgment. This generally includes maintaining accurate records, making prudent investment decisions, and taking steps to protect trust property.

Duty to Avoid Conflicts of Interest

Fiduciaries must also avoid situations in which their personal interests could interfere with their responsibilities to beneficiaries. If a potential conflict arises, it should be disclosed so beneficiaries can understand the situation and determine whether the fiduciary’s actions remain appropriate.

Examples of Breach of Fiduciary Duty in California

A breach of fiduciary duty can occur in many different ways. Sometimes the misconduct is intentional. Other times, it results from poor decisions, lack of oversight, or failure to follow the trustee’s legal responsibilities.

For a more detailed look at specific forms of misconduct, see our guide 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties, which outlines additional warning signs beneficiaries should be aware of.

Below are several examples that frequently appear in California trust and probate disputes.

Self-Dealing

Self-dealing occurs when a fiduciary enters into transactions that benefit the fiduciary rather than the beneficiaries.
For example, an executor might hire their own company to provide services to the estate at an inflated price.

Misappropriation of Assets

Misappropriation occurs when a fiduciary uses trust or estate assets for personal benefit.
Examples may include:
  • Unauthorized borrowing from the trust
  • Personal use of trust funds
  • Commingling trust assets with personal accounts

Failure to Disclose Important Information

Fiduciaries must keep beneficiaries reasonably informed about matters affecting their interests.
Withholding financial information, refusing to provide documents, or failing to disclose significant transactions may constitute a breach.

Negligent Management of Assets

A fiduciary who fails to properly manage trust assets may also violate their duties.
Negligence might involve:
  • Poor investment decisions
  • Failure to insure valuable property
  • Mishandling real estate or business assets
When these actions cause financial loss to the trust, beneficiaries may pursue legal remedies.

Consequences of a Fiduciary Breach

When a fiduciary violates their duties, California probate courts have several tools available to address the misconduct.

Liability for Damages

A fiduciary may be required to reimburse the trust or beneficiaries for losses caused by their actions. This may include lost income or depreciation in asset value.

Removal of the Fiduciary

If a trustee or executor has violated their obligations, the probate court may remove them from their role and appoint a replacement fiduciary.

Repayment of Improper Profits

If the fiduciary personally benefited from the breach, the court may order them to return those profits to the trust or estate.

Potential Criminal Liability

In cases involving fraud, theft, or embezzlement, the fiduciary may also face criminal consequences in addition to civil liability.
If you suspect a trustee or other fiduciary may have violated their duties, it may be helpful to speak with an experienced California trust litigation attorney about your options.

FAQ

Can a trustee be removed for breach of fiduciary duty?

Yes, California probate courts may remove a trustee who has violated their duties or mismanaged trust assets.

Can beneficiaries recover losses caused by a fiduciary breach?

In many cases, yes, beneficiaries may seek recovery of financial losses caused by the fiduciary’s misconduct.

How The Grossman Law Firm Can Help

At The Grossman Law Firm, we help beneficiaries and heirs throughout California enforce their rights in probate and trust litigation.
Call (888) 443-6590 or fill out our Get Help Now form.
Our Intake Specialists can evaluate your case at no cost to you. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published May 20, 2024