TrustTrust LitigationTrustee Duties

Trustee Duties: How Often Should My Trustee Be Reviewing the Trust’s Assets?

By January 8, 2026No Comments
trustee Standard of care

Table of Contents

Key Takeaways

  • California trustees have an ongoing duty to review and manage trust assets prudently.
  • There is no fixed schedule, but review must be regular, active, and tied to the trust’s purpose.
  • Failing to review assets can expose a trustee to personal liability for losses.
  • Beneficiaries have the right to court intervention when a trustee neglects this duty.

What Is a Trustee's Duty to Review Trust Assets Under California Law?

Under California law, a trustee acts as a fiduciary. Essentially acting as a financial babysitter. That means the trustee must administer the trust with reasonable care, skill, and caution. This obligation applies throughout the administration of the trust, not just at the beginning.
Reviewing trust assets is not up for debate. It is part of the trustee’s core responsibilities. A trustee who simply holds assets without evaluating whether they remain appropriate for the trust’s goals risks violating fiduciary duties. Courts focus on conduct, not intent. Even inaction can qualify as a breach if it causes harm.
At The Grossman Law Firm, we often hear from beneficiaries who feel something is off but are not sure why. A trustee may stop checking investments, postpone decisions, or simply let assets sit. Over time, that kind of inaction can shrink the trust, limit what is available for distribution, or push payments further down the road, even though the trust says otherwise.

How Often Should a Trustee Review Trust Assets?

California law does not impose a strict calendar-based rule. There is no statute that says a trustee must review assets quarterly or annually. Instead, the standard is reasonableness under the circumstances.
In practice, trustees should regularly review trust assets. Many trustees conduct at least an annual review. More frequent review may be required when conditions change.
A trustee must also review assets within a reasonable time after accepting the trusteeship or receiving new trust property. Failing to account for assets for months or years after taking control often raises red flags in probate court.
The key point is this: review must be active and responsive. A trustee cannot rely on past decisions indefinitely.

What Does It Mean to “Review” Trust Assets?

Reviewing trust assets involves more than glancing at account statements. It requires analysis and decision-making tied to the trust’s specific circumstances.

When reviewing assets, a trustee should consider:

The Purpose of the Trust

Trust assets must support the trust’s purpose. A trust designed to generate income for ongoing distributions requires a different investment approach than a trust meant to preserve assets for future transfer.
For example, if a trust holds undeveloped land but needs liquid income to make distributions, the trustee may need to sell or reposition that asset. Holding it indefinitely may not serve the trust’s goals.

The Terms of the Trust

The trust document controls. A trust benefiting a minor, a disabled beneficiary, or a retiree will each require different investment strategies. A trustee cannot apply a one-size-fits-all approach.

Distribution Requirements

Trusts that require periodic cash distributions demand liquidity. Trusts that call for outright distribution on a future date may prioritize preservation over income. Reviewing assets means ensuring the portfolio continues to meet these requirements.
A trustee who fails to consider these factors is not administering the trust prudently.

How the Uniform Prudent Investor Act Protects Beneficiaries

The Uniform Prudent Investor Act sets the standard for how trustees must invest and manage trust assets.
Under the Act, a trustee must review trust assets and determine whether they should be retained, sold, or reallocated. The goal is to bring the portfolio into compliance with the trust’s purposes, terms, and distribution needs.
This review must occur within a reasonable time after the trustee takes control of the assets. It must also continue as circumstances evolve. Market changes, beneficiary needs, and trust timelines all matter.
If a trustee fails to conduct these reviews and the trust suffers losses as a result, the trustee may be personally liable. Negligence alone can be enough. Bad intent is not required.
For more information on the Uniform Prudent Investor Act, please review our article “Trustee’s Duty: What is the Prudent Investor Rule” for a deeper understanding of your rights.

What Happens If a Trustee Fails to Review Trust Assets

When a trustee fails to actively review and manage assets, several problems can arise. Assets may lose value. Income may fall short. Distributions may be delayed or reduced.
From a legal standpoint, failure to review assets can constitute a breach of fiduciary duty. California probate courts have broad authority to address these situations.
In many cases, beneficiaries do not discover the problem right away. Trustees typically provide an accounting after a period of administration, often around one year. By then, losses may have already occurred.
Delay works against beneficiaries. The longer a trustee remains inactive, the harder it can be to recover losses or unwind poor decisions.

What Beneficiaries Can Do If a Trustee Breaches This Duty

If a trustee’s failure to review trust assets has caused harm, beneficiaries have options under California law.

Potential remedies include:

  • Seeking a surcharge against the trustee for financial losses
  • Requesting prejudgment interest on mismanaged funds
  • Seeking post-judgment interest after a court ruling
  • Petitioning for the removal of the trustee
Removal is often appropriate when a trustee shows a pattern of inaction or neglect. Courts focus on whether continued service puts the trust at risk. Early action can prevent further damage.
At this stage, evidence matters. Financial records, account statements, and the trust document itself often form the foundation of a successful petition.
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 the most common warning signs and what you can do about them.

FAQ

Is a trustee required to review trust assets every year?
California law does not set a fixed schedule. However, trustees are expected to review assets regularly and whenever circumstances change.

Can a trustee be liable for losses caused by inaction?
Yes. A trustee may be personally liable if failure to review or manage assets prudently results in financial loss.
Do beneficiaries have a right to question investment decisions?
Beneficiaries have the right to information and an annual accounting. Courts will review whether decisions align with the trust’s terms and fiduciary duties.
Can a trustee be removed for failing to review assets?
Yes. Persistent neglect or mismanagement can justify removal by the probate court.

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. Attorney Scott Grossman handles cases involving trustee misconduct, including failure to properly review and manage trust assets.
For more information, call (888) 443-6590 or fill out our Get Help Now form to speak with our team.
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.
Originally Published Jul 8, 2022