What Are the Duties of a California Trustee?

The California Probate Code sets out several responsibilities trustees must follow when administering a trust.

Under California Probate Code §§ 16000–16015, these duties include acting in beneficiaries’ interests, protecting trust property, and properly managing trust affairs.

Follow the Terms of the Trust

Probate Code § 16000 requires trustees to administer the trust according to its terms and applicable California law.

A trustee cannot ignore distribution instructions just because they disagree or believe another arrangement would be better.

However, trustees must also comply with applicable legal requirements and any valid discretion the trust grants them.

Act in the Best Interests of Beneficiaries

Under Probate Code § 16002, trustees must administer the trust solely in the beneficiaries’ interests.

This duty of loyalty generally prevents trustees from placing their personal financial interests ahead of their responsibilities.

For example, a trustee who uses trust money to pay personal expenses may violate this duty.

Treat Beneficiaries Impartially

Probate Code § 16003 requires trustees to act impartially when a trust has multiple beneficiaries, considering their different interests.

Impartiality doesn’t necessarily mean treating everyone identically. Trustees must respect the different rights and distribution instructions established by the trust.

A trustee cannot improperly favor one beneficiary simply because they have a closer personal relationship.

Protect and Manage Trust Assets

Trustees must take reasonable steps to protect trust property and manage investments prudently.

California’s Uniform Prudent Investor Act, including Probate Code § 16047, establishes standards for investment decisions.

Trustees must also keep trust property separate from personal assets under § 16009.

Selling property at an unjustifiably low price, misusing trust funds, or failing to safeguard valuable assets may raise fiduciary-duty concerns.

What Information Must a California Trustee Provide to Beneficiaries?

One of the most common trust disputes involves beneficiaries who cannot get clear answers about their inheritance.

California law requires trustees to keep beneficiaries reasonably informed about the trust and its administration.

Duty to Provide Information

Under Probate Code §§ 16060–16061, trustees must keep beneficiaries reasonably informed and respond to reasonable requests for information relevant to their interests, subject to applicable exceptions.

Depending on the circumstances, beneficiaries may request information about trust assets, expenses, distributions, and the trustee’s decisions.

Duty to Provide an Accounting

Probate Code § 16062 generally requires trustees to provide accountings at least annually, when the trust terminates, and when the trustee changes, to beneficiaries who meet the statute’s requirements.

Exceptions may apply, including certain trust provisions and beneficiary waivers.

An accounting helps beneficiaries understand how the trustee has managed trust money and property.

If a trustee refuses to provide required information, a beneficiary may have grounds to seek court intervention.

What Happens When a Trustee Breaches Their Fiduciary Duties?

A breach of trust occurs when a trustee violates a duty owed under the trust or applicable California law.

Not every mistake or disagreement qualifies as a breach. However, certain actions deserve closer examination.

Common Examples of Trustee Misconduct

Warning signs may include:

Using trust funds to pay personal expenses.
Selling trust property below market value without a reasonable justification.
Refusing to provide required accountings.
Favoring one beneficiary at another’s expense.
Making unauthorized distributions.
Unreasonably delaying required inheritance distributions.

For example, suppose a trustee sells a $900,000 trust property to a relative for $600,000 without obtaining a reliable valuation or adequately marketing it.

Beneficiaries may have grounds to investigate whether the trustee violated their fiduciary duties and financially harmed the trust.

If you suspect your trustee isn’t acting in your best interest, don’t wait. Explore The Grossman Law Firm’s 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties to learn common warning signs and available actions.

Can Beneficiaries Sue a Trustee for Breach of Fiduciary Duty?

Yes. California beneficiaries may have grounds to pursue trust litigation when a trustee violates their legal obligations.

Probate Code § 17200 allows qualifying beneficiaries to petition the probate court concerning trust administration and other trust matters.

Additionally, Probate Code § 16420 provides remedies for breaches of trustee duties.

Legal Remedies for Trustee Misconduct

Depending on the circumstances, the court may:

Order the trustee to perform their duties.
Require the trustee to compensate the trust for losses.
Prevent additional misconduct.
Remove the trustee.
Set aside certain improper transactions.
Reduce or deny trustee compensation.

The appropriate remedy depends on the evidence, the nature of the breach, and the harm involved.

At The Grossman Law Firm, we help beneficiaries evaluate potential claims and pursue appropriate legal remedies when trustee misconduct threatens their inheritance.

What Should You Do If Your Trustee Isn't Following the Law?

If you suspect a trustee has violated their duties, start by gathering documents that help explain what happened.

These may include trust documents, accountings, bank statements, property records, and communications with the trustee.

You should also document missing distributions, unexplained transactions, and requests for information that the trustee has ignored.

When to Contact a California Trust Litigation Attorney

Consider speaking with a trust litigation attorney when the trustee’s actions involve substantial financial losses, withheld inheritances, or ongoing misconduct.

An attorney can review the circumstances and determine whether a petition or other legal action may be appropriate.

You don’t necessarily have to wait until the trustee finishes administering the trust to address suspected misconduct.

Contact The Grossman Law Firm today to see your options and whether your case qualifies for a contingency fee.

FAQ

Can a California Trustee Use Trust Money for Personal Expenses?

Generally, no. Probate Code § 16004 prohibits trustees from using trust property for personal profit or purposes unrelated to the trust. Legitimate trustee compensation and authorized reimbursements are different.

Does a Trustee Have to Treat All Beneficiaries Equally?

Not necessarily. Trustees must act impartially while following the trust’s terms, which may provide beneficiaries with different interests or distributions.

Can a Trustee Be Removed for Breaching Their Duties?

Yes. Probate Code § 15642 allows courts to remove trustees under certain circumstances, including breaches of trust.

Can Beneficiaries Recover Money Lost Through Trustee Misconduct?

Potentially. Under Probate Code §§ 16420 and 16440, beneficiaries may seek remedies that require a trustee to restore losses or otherwise compensate the trust, depending on the circumstances.

How The Grossman Law Firm Can Help

If your trustee refuses to provide information, mismanages trust assets, or withholds your inheritance, you may have grounds to pursue legal action.

At The Grossman Law Firm, we help beneficiaries and heirs throughout California enforce their rights in probate and trust litigation.

Please call us at (888) 443-6590 or complete our Get Help Now form to take the next step in protecting your inheritance.

Our Intake Specialists can evaluate your case at no cost. We will schedule qualifying cases for a Free Phone Consultation with Attorney Scott Grossman.

Originally Published: Aug 5, 2016

What Are the Duties of a California Trustee?

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