Table of Contents
Key Takeaways
- Trustees and executors have a legal duty to act in the beneficiaries’ best interests.
- A breach of fiduciary duty can involve self-dealing, mismanagement of assets, failure to account, or withholding information.
- Beneficiaries are often the first people to notice warning signs of misconduct.
- California courts can remove trustees, order accountings, and require fiduciaries to repay losses.
- Early investigation may help prevent additional harm to the trust or estate.
What Is a Breach of Fiduciary Duty?
A fiduciary duty is a legal obligation to act in someone else’s best interests.
In trust and probate matters, fiduciaries are often given control over money, investments, real estate, and other valuable assets. Because beneficiaries depend on them to manage those assets properly, California law requires fiduciaries to act honestly, prudently, and loyally.
A breach of fiduciary duty occurs when a fiduciary fails to meet those obligations.
Sometimes the misconduct is intentional. Other times, it results from negligence or poor decision-making. Either way, beneficiaries may suffer financial harm when fiduciaries fail to do their job.
The Grossman Law Firm helps beneficiaries throughout California evaluate potential fiduciary breaches and take legal action to enforce their rights under the Probate Code.
Who Owes Fiduciary Duties in California?
Several individuals involved in trust and estate administration owe fiduciary duties.
Trustees
Trustees must administer a trust according to its terms and for the benefit of the beneficiaries.
Executors and Administrators
Personal representatives are responsible for managing probate estates, paying debts, safeguarding assets, and distributing property to heirs and beneficiaries.
Agents Acting Under a Power of Attorney
Individuals given authority to manage another person’s financial affairs must act in that person’s best interests.
Conservators
Conservators who manage another person’s finances also owe fiduciary duties under California law.
Common Examples of a Breach of Fiduciary Duty
Many beneficiaries do not realize they may have a legal claim until they understand what trustee misconduct actually looks like.
Self-Dealing
A trustee cannot use trust assets for personal gain.
Examples may include:
- Purchasing trust property below market value
- Using trust funds for personal expenses
- Favoring their own interests over the beneficiaries
Failure to Provide an Accounting
Beneficiaries are often entitled to information about how trust assets are being managed.
When a trustee refuses to provide accountings or financial records, beneficiaries may be unable to determine what is happening inside the trust.
Mismanagement of Trust Assets
Trustees have a duty to protect trust property.
Common examples include:
- Allowing property to fall into disrepair
- Failing to collect rental income
- Making reckless investment decisions
- Neglecting valuable assets
Conflicts of Interest
Trustees must remain loyal to the beneficiaries.
When personal interests interfere with trust administration, litigation often follows.
Warning Signs Beneficiaries Should Not Ignore
Many breach of fiduciary duty cases begin with concerns that something simply does not feel right.
Common warning signs include:
- The trustee refuses to communicate.
- Requests for information are ignored.
- Distributions are repeatedly delayed.
- Financial records are unavailable.
- Trust property is sold without explanation.
- Large transactions cannot be explained.
- The trustee becomes defensive when questioned.
- One beneficiary appears to be receiving special treatment.
A single issue does not necessarily indicate misconduct. However, multiple warning signs often justify a closer investigation.
If you suspect your trustee isn’t acting in your best interest, don’t wait. Explore 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties to learn common warning signs and available actions.
What Can Happen to a Trustee Who Breaches Their Duties?
California probate courts have broad authority to address fiduciary misconduct.
Depending on the circumstances, a court may:
- Order a formal accounting
- Suspend trustee powers
- Remove the trustee
- Appoint a replacement trustee
- Impose a surcharge
- Require repayment of misappropriated funds
In serious cases, a trustee may be held personally responsible for losses caused by their actions.
When Litigation Becomes Necessary
Not every trust dispute requires litigation.
However, court intervention is often necessary when beneficiaries cannot obtain answers voluntarily.
For example, litigation may become necessary when:
- A trustee refuses to provide information.
- Trust assets appear to be missing.
- Self-dealing is suspected.
- The trustee has violated the terms of the trust.
- Beneficiaries have suffered financial harm.
Many beneficiaries discover the truth only after obtaining records through litigation.
FAQ
Is a breach of fiduciary duty a serious matter?
Yes. A breach of fiduciary duty can result in financial losses, delayed inheritances, trustee removal, and court-ordered repayment of damages.
Can a trustee be personally liable?
Yes. California courts can require trustees to reimburse trusts and beneficiaries for losses caused by misconduct.
What if my trustee refuses to provide information?
Beneficiaries may have legal options to compel information, seek an accounting, or pursue court intervention.
Can a trustee be removed?
Yes. Probate courts can remove trustees who fail to properly perform their duties.
Related Resources
How The Grossman Law Firm Can Help
Many beneficiaries hesitate to take action because they are not sure whether what they are experiencing is actually misconduct.
Unfortunately, waiting can sometimes make the problem worse.
If you suspect a trustee, executor, or other fiduciary is withholding information, mismanaging assets, or putting their own interests ahead of the beneficiaries, it may be time to speak with an experienced trust litigation attorney.
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 fill out our Get Help Now form below.
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: Jan 17, 2025