Key Takeaways
- Yes, a trustee can face criminal charges, including jail time, for stealing trust property in California.
- Theft, embezzlement, and misappropriation of trust assets may be prosecuted under California Penal Code §§484–503.
- Criminal penalties are separate from civil remedies, such as surcharges, removal, and the recovery of stolen assets.
- Beneficiaries who suspect theft should act quickly to prevent further loss and protect trust assets.
- The Grossman Law Firm represents beneficiaries statewide in trustee-theft investigations and litigation.
Trust beneficiaries often ask a critical question: Can a trustee go to jail for stealing from the trust? Under California law, the answer is yes. A trustee who misappropriates trust assets violates their fiduciary duties and may face both civil and criminal consequences. At The Grossman Law Firm, we regularly help beneficiaries address suspected theft and take steps to recover trust property.
Understanding how California courts treat trustee theft and what beneficiaries can do about it is the first step in protecting your inheritance.
What Counts as Trustee Theft Under California Law
A trustee is a fiduciary who must manage trust assets solely for the benefit of the beneficiaries. When a trustee uses trust property for personal benefit, hides transactions, transfers assets to themselves, or otherwise misappropriates trust funds, that conduct may constitute:
- Embezzlement
- Theft
- Misuse or diversion of trust property
- Self-dealing
- Unauthorized withdrawals or transfers
Actions like these breach the trustee’s fiduciary duties under the California Probate Code, including the duties of loyalty, impartiality, prudence, and proper administration.
If you want to understand additional forms of misconduct that may indicate a breach, see our guide: 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties.
Criminal Penalties for Trustee Theft
Can a trustee actually go to jail?
Yes. Trustee theft can be charged under California Penal Code provisions governing theft, embezzlement, and fraudulent conversion. Criminal prosecution is handled by the district attorney, not the probate court.
Penalties may include:
Imprisonment
Depending on the amount stolen and the specific charge, penalties may involve county jail or state prison.
Fines and Restitution
A trustee may be ordered to repay stolen amounts plus penalties.
Criminal Conviction
Conviction can carry long-term consequences, including loss of professional licenses.
Removal from the Trustee Role
Although removal is a civil remedy, criminal activity almost always results in the trustee’s removal.
California courts take trustee theft seriously because fiduciary duties are foundational to the administration of trusts. Misappropriating assets is not merely a “breach,” it is often a prosecutable crime.
Civil Liability and Breach of Fiduciary Duty
Criminal penalties do not replace the trustee’s civil liability. Even if the district attorney does not file charges,beneficiaries may pursue civil remedies in probate court.
Civil consequences can include:
- Surcharge (a financial judgment against the trustee)
- Repayment of stolen or misused assets
- Interest and lost income caused by the breach
- Removal or suspension of the trustee
- Appointment of a successor trustee
- Court-ordered accounting
A trustee’s breach of fiduciary duty can cause long-term financial harm to beneficiaries. California Probate Code §§ 16420–16440 outlines remedies that beneficiaries may seek, including recovery of trust property and holding the trustee personally liable for resulting losses.
What Beneficiaries Should Do If They Suspect Theft
Beneficiaries should act promptly. Delay often leads to continued losses, concealment of transactions, or dissipation of trust assets.
1. Request a Formal Accounting
California trustees must provide a legally compliant accounting upon request once the trust becomes irrevocable.
2. Document Suspicious Activity
Red flags may include:
- Missing bank statements
- Unexplained withdrawals
- Property transferred without explanation
- The trustee refuses to communicate
3. Consult a Trust Litigation Attorney
The probate court process is complex, and beneficiaries cannot rely on the trustee to investigate on their own. The Grossman Law Firm helps beneficiaries uncover misconduct, freeze assets when necessary, and petition the court for relief.
4. Consider Filing a Petition
Depending on the facts, beneficiaries may ask the court to:
- Compel an accounting
- Suspend or remove the trustee
- Surcharge the trustee for damages
- Order return of misappropriated trust assets
Acting early protects the trust’s value and strengthens your legal position.
Related Resources
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FAQ
Can a trustee really go to jail for stealing?
Yes. Theft and embezzlement of trust property can lead to criminal charges under California law.
Is criminal prosecution required to remove a trustee?
No. Removal is a civil remedy and does not depend on criminal charges being filed.
What if the trustee claims it was a “mistake”?
Intent matters for criminal charges, but the probate court may still order a surcharge or removal for any misuse of trust assets.
Can beneficiaries recover stolen funds?
Often, yes. The court may order repayment, impose financial penalties, or retrieve improperly transferred assets.
What if the trustee refuses to provide an accounting?
Beneficiaries can petition the court to compel one.
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. If you suspect a trustee has stolen trust property or mismanaged trust assets, immediate action is essential. Waiting allows the problem to grow—in these cases, it is best to act swiftly to protect your inheritance.
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 March 19, 2024