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TrustTrust Litigation

Fiduciary Surcharge Against a Trustee in California

By January 30, 2026No Comments
Fiduciary Surcharge in California

Table of Contents

Key Takeaways

  • The probate court may impose a fiduciary surcharge on a trustee who breaches fiduciary duties.
  • California probate courts use surcharges to restore trust losses or reverse improper transactions.
  • A surcharge may include lost value, improper expenses, interest, or disallowed compensation.
  • In some cases, the court requires trustees to pay a surcharge from personal funds.
  • Beneficiaries can request a surcharge as part of a trust litigation case.

What a Fiduciary Surcharge Is Under California Law

Under California law, a fiduciary surcharge is a monetary remedy set by the California probate court. It occurs when a trustee breaches fiduciary duties or causes harm to the trust or its beneficiaries.
The purpose of a surcharge is corrective. It is not punitive. The court uses it to restore the trust to the position it would have occupied before the breach. In practice, this often means ordering the trustee to repay money, reverse losses, or reimburse the trust for improper expenses.
A surcharge is one of the most common remedies sought in California trust litigation.

When a Probate Court May Order a Surcharge

Further, in California probate courts may impose a surcharge if a trustee’s actions cause financial harm or reduce the trust assets. Such cases often stem from trust accountings, objections, or petitions alleging breach of fiduciary duty.

Common Trustee Conduct That Leads to a Surcharge

Courts regularly evaluate surcharge requests involving:

  • Improper or undocumented expenditures
  • Excessive or unauthorized trustee compensation
  • Failure to manage or invest trust assets prudently
  • Self-dealing or conflicts of interest
  • A delay that causes measurable financial loss

Intent Is Not Required Under California Law

Notably, California law does not require malicious intent. Instead, courts focus on conduct and results. Even negligent administration may support a surcharge if it caused financial harm to the trust.
If you suspect your trustee is not acting in your best interests, do not hesitate to contact an attorney specializing in trust and probate law. Review 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties to identify common warning signs and available actions.

How a Fiduciary Surcharge Is Calculated

A surcharge is based on the financial impact of the breach. Depending on the facts, the court may order the trustee to repay:
  • Improperly paid fees or expenses
  • Financial losses caused by mismanagement
  • Lost appreciation or income
  • Interest that would have accrued absent the breach
In some cases, the surcharge exceeds the trustee’s total compensation. Courts may also deny or reduce trustee fees in addition to imposing a surcharge.

Who Pays a Fiduciary Surcharge

When a Trustee Must Pay a Surcharge Personally

If the trustee has no personal interest in the trust property, the surcharge must typically be paid from the trustee’s personal funds. The trustee cannot simply reimburse the trust using trust assets.
This exposure is one reason surcharge claims carry significant leverage in trust litigation. Personal financial liability often motivates resolution once the risks become clear.
The Grossman Law Firm has been helping clients across California for over twenty-five years. We understand how California courts evaluate trustee conduct and financial harm, so you don’t have to. For more information on your specific legal case, please contact The Grossman Law Firm or an experienced trust and probate attorney in your area.

FAQ

Is a fiduciary surcharge automatic when a trustee breaches a duty?
No, the court must find a breach of fiduciary duty that caused financial harm.
Can beneficiaries request interest as part of a surcharge?
Yes, courts may grant interest to account for the loss of appreciation or delayed distributions.
Is a surcharge the only remedy available?
No, beneficiaries may also seek the removal of a trustee, a reduction in fees, or any other court-ordered relief that fits their predicament.

Related Resources on Trustee Duties and Trust Litigation

For additional guidance on trustee obligations, beneficiary rights, and California trust litigation procedures, these resources may be helpful:

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, including claims for fiduciary surcharge. Attorney Scott Grossman focuses exclusively on these matters and understands how California courts evaluate trustee conduct and financial harm.
Call (888) 443-6590 or fill out our Get Help Now form to take the next step.
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: September 15, 2016