Table of Contents
Understanding the Trustee’s Duty to Administer a Trust
How Trustees Must Distribute Specific Gifts
How Trustees Must Distribute the Residuary of the Trust
Warning Signs the Trustee Is Not Following the Trust
Real-World Examples of Trustees Violating This Duty
- The “Investment Guru” Trustee
- The Trustee Who Claims Verbal Instructions
- The Trustee Who Wants to “Grow” the Estate
What Remedies Are Available in California Probate Court
How The Grossman Law Firm Can Help
Key Takeaways
- California trustees must follow the trust’s written terms, not their personal preferences, assumptions, or verbal instructions.
- Delays, refusals to distribute, or attempts to rewrite distribution terms often signal a breach of fiduciary duty.
- Beneficiaries have the right to information, accountings, and timely distributions once the trust is ready.
- California probate courts can suspend or remove a trustee, order distributions, or impose a surcharge.
- The Grossman Law Firm helps beneficiaries enforce their rights when a trustee is not administering the trust according to its terms.
Understanding the Trustee’s Duty to Administer a Trust
Under California Probate Code §16000, a trustee must administer the trust according to the terms of the trust. This duty is exactly what it sounds like: the trustee must follow the written document and cannot change or reinterpret its instructions to match their own goals, beliefs, or “verbal agreements” with the settlor.
Attorney Scott Grossman and The Grossman Law Firm regularly work with beneficiaries who suspect their trustee is ignoring the trust’s instructions, delaying distributions, or withholding information. Understanding how this duty works and what counts as a breach helps beneficiaries recognize when you may need court intervention.
How Trustees Must Distribute Specific Gifts
Many California trusts contain specific gifts—for example, a direction that each grandchild receive $10,000.
A trustee must:
- Identify the asset(s) used to satisfy the gift.
- Determine whether cash is available or property needs to be sold.
- Distribute the specific gift before distributing the residuary.
When the Trustee Should Act
If the trust holds cash and has little debt, the trustee should make these distributions relatively quickly. Suppose the trust’s only major asset is real property. In that case, the trustee must prepare, list, and sell the home before making the specific gifts. A trustee who moves at a normal, businesslike pace is fulfilling their duty. One who stalls or takes no action is likely in breach.
How Trustees Must Distribute the Residuary of the Trust
After specific gifts, most trusts include a residuary clause that provides instructions for distributing everything that remains. A typical example: “All remaining trust property shall be distributed in equal shares to my children.”
These gifts are typically outright and unrestricted.
Before distributing the residuary, the trustee must:
- Marshal trust assets
- Pay the settlor’s legitimate debts
- File necessary tax returns
- Prepare an accounting
- Complete any required administrative tasks
Depending on the estate’s complexity, this can take several months or even up to a year. Longer delays are unusual but possible in complicated cases.
When a Delay Becomes a Problem
If the trustee has been given a reasonable amount of time and still refuses to distribute, especially if they are not communicating or will not provide financial information, those are strong indicators of a fiduciary breach.
Warning Signs the Trustee Is Not Following the Trust
Beneficiaries should pay attention to:
- Unexplained delays in paying specific or residuary gifts
- A trustee who refuses to sell property required to fund distributions
- Claims of “verbal wishes” that contradict the trust
- Investments or business plans not authorized by the trust
- Lack of communication or refusal to provide an accounting
- Sudden changes in how or when beneficiaries will receive their shares
If you observe any of these issues, the trustee may be in breach of their duty to administer the trust in accordance with its terms.
Real-World Examples of Trustees Violating This Duty
The following scenarios are based on matters handled by The Grossman Law Firm in which trustees clearly failed to follow the trust terms.
The “Investment Guru” Trustee
One trustee insisted he would “invest for everyone’s benefit” and refused to distribute the residuary as required by the trust. His plans included stock speculation and house-flipping with trust money. Because the trust called for outright distribution, not long-term investments, his refusal to distribute was a direct breach.
The Trustee Who Claims Verbal Instructions
Another trustee claimed that the settlor gave him verbal instructions before the settlor’s death that were completely different from the written trust. Based on these supposed instructions, he delayed distributions, planned charitable gifts, and even promised money to his daughter.
California law does not allow a trustee to override written trust terms with verbal statements. His actions violated his core fiduciary duty.
The Trustee Who Wants to “Grow” the Estate
A third trustee understood the trust required outright distribution but wanted to purchase rundown properties, renovate them, wait years for appreciation, and then distribute. Her intention to “help” beneficiaries did not matter. Trustees cannot delay required distributions to pursue personal investment ideas. This, too, is a clear breach.
Other Common Violations
A trustee may also breach the duty to follow the trust when they:
- Change distribution percentages
- Withhold distributions without explanation
- Pay themselves fees not authorized by the trust
- Hold property indefinitely without attempting to sell it
- Distribute assets unevenly
- Favor one beneficiary over another
Often, a trustee who ignores one duty also ignores several others. Many beneficiaries discover additional issues once they begin investigating.
To learn more about common breaches of trustee duties, read our article “20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties.“
What Remedies Are Available in California Probate Court
If a trustee fails to administer the trust as required, beneficiaries may petition the court for:
- Suspension of the trustee during litigation
- Removal of the trustee
- Surcharge, meaning the trustee must personally pay damages
- Prejudgment and post-judgment interest
- Orders compelling the trustee to take specific actions, including making distributions or providing an accounting
These remedies exist to protect beneficiaries and ensure the trust is carried out exactly as written.
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
- Trustee Duties: Understanding the Trustee Standard of Care
- Can’t Afford a Probate or Trust Attorney?
FAQ
What if my trustee is not following the trust terms?
You may request an accounting, demand information, or petition the probate court for orders enforcing the trust and possibly removing the trustee.
How long should distributions take?
Simple trusts often distribute within several months to a year. Long delays without explanation are a red flag.
Can a trustee rely on verbal instructions from the settlor?
No. California law requires trustees to follow the terms of the trust.
What if the trustee refuses to provide financial information?
Lack of communication is a common sign of a breach. You may petition the court to compel an accounting.
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 situation at no cost. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published Jul 6, 2021