Five Exceptions for Your Trustee Seeking a Release of Liability Waiver

Key Takeaways
Why a Trustee May Ask for a Liability Waiver
Five Exceptions Allowing a Trustee to Seek a Liability Waiver
Red Flags That Your Trustee May Be Breaching Their Duties
Understanding Proper Trust Administration
FAQ
How The Grossman Law Firm Can Help

Key Takeaways

A trustee cannot require a beneficiary to sign a liability waiver as a condition for receiving a required distribution under California law.
Some limited exceptions allow trustees to withhold funds or request voluntary releases.
Beneficiaries should understand these exceptions to identify potential red flags.
The Grossman Law Firm helps California heirs and beneficiaries enforce their rights and challenge improper trustee conduct.

Why a Trustee May Ask for a Liability Waiver

It’s not uncommon for beneficiaries to contact The Grossman Law Firm after being told by a trustee that they must sign a “release of liability” before receiving their inheritance.

This situation is a major warning sign. In California, a trustee may not require a beneficiary to relieve them of liability as a condition for making a distribution or payment required by the trust. Doing so violates the trustee’s fiduciary duties.

When a trustee refuses to provide an accounting or meaningful financial information and insists on a waiver before distribution, that behavior suggests a deeper problem in the trust’s administration.

Under the California Probate Code, if the terms of the trust require a distribution to a beneficiary, the trustee must follow those terms without imposing unlawful conditions or self-protective waivers.

Five Exceptions Allowing a Trustee to Seek a Liability Waiver

Although the general rule protects beneficiaries, there are five key exceptions when a trustee may lawfully retain funds or request a release of liability:

1. Maintaining a Reserve for Expenses

A trustee may maintain a reasonable reserve for foreseeable or unforeseen expenses, such as taxes, debts, accounting fees, and administrative costs.

Disagreements can arise about what’s “reasonable,” but the trustee is generally allowed to set aside funds for legitimate trust-related expenses.

2. Seeking a Truly Voluntary Release

A trustee can ask for a voluntary release of liability—so long as it’s genuinely voluntary.

That means the trustee has provided a complete accounting, disclosed financial information, and is not conditioning your inheritance or making threats. Transparency is key to determining whether the release is voluntary.

3. Requesting Indemnification Against Third-Party Claims

A trustee may ask a beneficiary to indemnify them against claims by third parties, such as lenders or creditors, related to the distributed property.

For example, if the trustee distributes a house that still carries a mortgage, they may request indemnification against the lender’s future claims.

4. Withholding a Disputed Portion of the Trust

If there is a legitimate dispute among beneficiaries over who should receive certain assets or percentages of the estate, the trustee may withhold only the disputed portion of the distribution.

The trustee must, however, still distribute the undisputed assets to the rightful beneficiaries.

5. Seeking Court or Beneficiary Approval of the Accounting

Finally, a trustee can petition the probate court to approve their accounting or request beneficiary approval before making a distribution.

If the trustee provides full financial information and seeks formal approval, they are acting within their fiduciary duties—not violating them.

Red Flags That Your Trustee May Be Breaching Their Duties

While these exceptions exist, trustees sometimes misuse them to delay distributions or shield themselves from accountability. Watch for these warning signs:

You are asked to sign a waiver without receiving a full accounting.
The trustee withholds your inheritance with no clear reason or timeline.
You’re denied access to trust documents or financial statements.
The trustee refuses to communicate or provide updates about the trust.

If any of these apply, it may indicate a breach of fiduciary duty and justify beginning trust litigation.

Understanding Proper Trust Administration

Proper trust administration in California requires trustees to:

Keep beneficiaries informed of all major actions and financial transactions.
Provide annual and final accountings.
Distribute trust assets according to the trust’s written terms.
Avoid self-dealing or conflicts of interest.

When trustees fail to meet these obligations, beneficiaries have the right to petition the court to compel an accounting, remove the trustee, or recover losses caused by mismanagement.

To learn more, read these related resources:

FAQ

Can my trustee refuse to give me my inheritance unless I sign a waiver?

No. If the trust terms require a distribution, your trustee cannot legally demand a waiver before payment. This violates their fiduciary duty under California law.

What if I already signed a waiver?

You may still have legal options. Depending on the circumstances, a court could determine that the waiver was obtained under pressure or without full disclosure—and therefore invalid.

How do I know if I should start trust litigation?

If your trustee refuses to account, withholds distributions, or pressures you into signing documents you don’t understand, consult a California trust litigation attorney immediately.

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.

Our team reviews trustee conduct, identifies red flags, and takes swift legal action to protect your inheritance when necessary.

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.

Trustee Duties: Five Exceptions for Your Trustee Seeking a Release of Liability Waiver

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