Can a Trustee Sell Trust Property Without Beneficiaries’ Approval?
Table of Contents
- Key Takeaways
- Can a Trustee Sell Trust Property Without Beneficiaries’ Approval?
- Legal Limits on a Trustee’s Power to Sell
- When Beneficiaries Can Challenge a Sale
- Trustee Duties When Selling Trust Property
- What to Do if You Suspect Mismanagement
- FAQ
- Related Resources
- How The Grossman Law Firm Can Help
Key Takeaways
- A California trustee may sell trust property without beneficiary approval if the trust document grants that authority.
- Trustees must always act in the best interests of the beneficiaries. They cannot sell property for personal gain or at a price below market value.
- Beneficiaries can challenge any sale that breaches fiduciary duties or violates the California Probate Code.
- The Grossman Law Firm represents beneficiaries when trustees misuse their power to sell trust assets.
Can a Trustee Sell Trust Property Without Beneficiaries’ Approval?
Under California law, a trustee generally has broad authority to manage and sell trust property—but fiduciary duties limit those powers. Whether a trustee can sell property without beneficiary approval depends primarily on the trust’s terms and California Probate Code §16226, which permits trustees to sell real or personal property unless the trust document restricts that authority.
If the trust expressly authorizes the sale, the trustee does not need to obtain the beneficiaries’ consent. However, even when authorized, every sale must serve the best interests of the beneficiaries and comply with the trustee’s duty of loyalty and impartiality.
At The Grossman Law Firm, we frequently handle cases involving trustees who sell trust real estate or investments without proper notice or who appear to benefit personally from the transaction. These actions can justify legal intervention or even the removal of a trustee.
Legal Limits on a Trustee’s Power to Sell
- The trust document: Some trusts require appraisals, notice to beneficiaries, or approval from the co-trustee before selling property.
- California Probate Code §16004: Prohibits a trustee from using trust property for personal benefit or engaging in self-dealing.
- Fair market value standards: Trustees must sell property at a fair and reasonable price.
- Duty to inform: Trustees must keep beneficiaries “reasonably informed” about significant trust transactions, including major sales.
Suppose a trustee sells property to themselves, a relative, or an associate for less than market value. In that case, that may be considered self-dealing, which is a serious breach of fiduciary duty.
When Beneficiaries Can Challenge a Sale
Beneficiaries may challenge a sale if any of the following occur:
- The trustee sold property below fair market value.
- The sale personally benefited the trustee or someone close to them.
- The trustee failed to notify beneficiaries or provide a proper accounting.
- The sale violated the trust terms or the trustee’s duty of impartiality.
Suppose the court finds that the trustee breached their fiduciary duty. The court can reverse the sale, surcharge the trustee (order repayment of failures), or remove the trustee altogether.
Trustee Duties When Selling Trust Property
When selling trust property, trustees are legally required to:
- Obtain an independent fair market value appraisal.
- List or market the property to attract competitive offers.
- Disclose material information to beneficiaries if the sale affects their interests.
- Keep accurate records of all sales documents and proceeds.
- Avoid conflicts of interest and any appearance of self-dealing.
Failure to follow these steps can expose a trustee to litigation under the California Probate Code and potentially lead to personal liability.
What to Do if You Suspect Mismanagement
If you believe the trustee improperly sold trust property:
- Request a copy of the trust and any accounting related to the sale.
- Ask for documentation such as appraisals, sale contracts, and escrow statements.
- Consult a trust litigation attorney before directly confronting the trustee.
At The Grossman Law Firm, we help beneficiaries determine whether a trustee’s actions have violated fiduciary duties and pursue legal remedies, including recovering losses or removing the trustee if necessary.
Frequently Asked Questions
Can a trustee sell trust property to themselves?
No. It is prohibited under Probate Code §16004 as self-dealing and violates the trustee’s fiduciary duty.
Do beneficiaries have to be notified before a trustee sells property?
Not necessarily. Some trusts do not require pre-sale notice, but trustees must provide information upon request and disclose the sale in their periodic accountings.
Can a trustee sell property after the death of the trust creator?
Yes, if the trust authorizes it. Once a trust becomes irrevocable, the trustee must follow its terms when managing and distributing assets.
Can beneficiaries stop a sale before it happens?
Yes. Beneficiaries may file a petition in probate court to temporarily restrain the sale or suspend the trustee’s powers if the transaction appears improper.
Related Resources
- Overview of California Trust Litigation
- How to Get Your Trustee to Distribute Your Inheritance
- Tips for Determining the Damages for a Breach of Fiduciary Duties
- 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties
- Can’t Afford a Probate or Trust Attorney?
How The Grossman Law Firm Can Help
At The Grossman Law Firm, we assist beneficiaries and heirs throughout California in enforcing their rights in probate and trust litigation. Whether your trustee sold property without approval or failed to account for the proceeds properly, our team can help you take legal action to protect your inheritance.
Call (888) 443-6590 or complete 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 5, 2025