When a trustee steals trust assets or causes financial harm through negligence, beneficiaries may have the right to seek a trustee surcharge. A surcharge is a court-ordered remedy that can require the trustee to repay losses from personal assets rather than from the trust itself. Because these cases often involve complex financial records and fiduciary duties, working with an experienced California trust litigation attorney can significantly improve the likelihood of a successful outcome.
A Trustee Should Pay Out of Pocket Due to Negligence
To obtain a trustee surcharge, beneficiaries generally must prove:
- That the trustee is responsible for the loss, destruction, or financial harm to the trust assets.
- The reasonable standard of care for trustees in similar circumstances.
- That the trustee failed to meet that standard.
- That the beneficiaries or the trust suffered harm as a result of the actions of the trustee.
- The amount of money that it would take to make the trust or beneficiaries whole.
A successful surcharge claim can require the trustee to reimburse the trust for losses caused by negligence or misconduct. In some cases, the trustee may also be responsible for lost investment gains, interest, or other financial benefits the trust would have earned if the loss had not occurred.
For example, if a trustee improperly withdraws trust funds or allows trust assets to be wasted through neglect, the court may order the trustee to restore both the lost assets and any income those assets would have generated.
If you suspect a trustee is mismanaging trust assets or failing to fulfill fiduciary duties, it is important to act quickly. Learn more by reading 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties and discover common warning signs that may justify legal action.
Related Resources
- Overview of California Trust Litigation
- Can You Sue a Trustee for Negligence?
- Trustee’s Duty: What is the Prudent Investor Rule?
- How to Get Your Trustee to Distribute Your Inheritance?
- Know What You’re Getting Into: The Timeline of a Trust and Estate Lawsuit
- Can You Remove a Trustee for Mishandling Assets?
- Can’t Afford a Probate or Trust Attorney?
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 case at no cost to you. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published Oct 14, 2016