Back to the Learning Center

By: Scott Grossman on July 8th, 2022

Trustee Duties: How often should my Trustee be reviewing the Trust’s assets?

Are you worried your Trustee has not been doing their job? Or just curious about your rights as a beneficiary and want a more comprehensive understanding of your Trustee’s duties? Or how often should your trustee be reviewing your trust’s assets?

Or are you concerned that your Trustee hasn’t reviewed Trust assets to make investment decisions? Do you think your Trustee is just sitting on the Trust’s assets, letting them devalue?

Let’s talk about your Trustee’s duty to review trust assets. 

Here at The Grossman Law Firm, we help our clients by educating them on their rights as a beneficiary and what duties their Trustee must adhere to be a Trustee. They must follow a certain Standard of Care to stay a Trustee. 

In this article and video, you will learn: 

  • How often should my trustee be reviewing the trust’s assets?
  • What does it mean to review assets? 
  • How does the Uniform Prudent Investor Act protect your rights as a beneficiary?
  • What to do if your Trustee breaches their fiduciary duty?

How often should my trustee be reviewing the trust’s assets?

There is no fixed rule on how often you should update your Trust. In most situations, you should review every 3-5 years. It is recommended you complete an annual review of the Trust and assets.  

What does it mean to review assets? 

Your Trustee is legally responsible for reviewing Trust assets. And if they are not reviewing Trust assets, they are not doing their job effectively, which could mean your Trust could take a hit and not be worth as much as you initially thought. 

When reviewing Trust assets, the Trustee must consider:

  • The Trust’s purpose

The Trustee has to align the assets with the Trust’s purpose. For example, a Trust has to distribute income for years to come. It has little cash to distribute but undeveloped property owned by the Trust. If that is the case, the Trustee must sell the undeveloped land because it won’t generate revenue. 

  • The Trust’s terms

A trust meant to benefit a minor child will need to invest differently than a Trust whose purpose is to help a retiree.

  • Distribution requirements 

A trust sending specific gifts will be treated differently from a Trust required to distribute only cash. A trust requiring outright distribution has very different investment criteria from a Trust that will hold assets for years.

Suppose your Trustee is not actively reviewing Trust Assets. In that case, it is possible they are mismanaging your Trust and that they are not doing their duty as a Trustee. 

Not doing their duty as a Trustee means they can be subject to removal by not following The Uniform Prudent Investor Act. 

How does The Uniform Prudent Investor Act protect your rights as a beneficiary?

The Uniform Prudent Investor Act (UPIA), adopted in 1992, is meant to protect the rights of beneficiaries by detailing the expected duties of a Trustee. 

Part of the UPIA requires the Trustee to review the Trust assets and decide what to keep and what assets to sell to bring the Trust portfolio into compliance with the Trust’s purposes, terms, distribution requirements, and other circumstances. The Trustee must do this within a reasonable time after accepting the trusteeship or receiving trust assets. 

That means that the Trustee is liable for reviewing Trust assets. If they are not reviewing Trust assets, they can be responsible for any Trust loss due to negligence. 

What to do if your Trustee breaches their fiduciary duty?

Further, you won’t know until at least a year after trust administration begins if your Trustee is not reviewing Trust assets properly. That is because you won’t get a trust account until after a year of trust administration has concluded.

So what can you do? 

You can take many options if your Trustee has breached their fiduciary duty, reviewing Trust assets. 

You can first evaluate the loss of your Trust and what that negligence has cost you. If the Trustee’s breach of duty resulted in a financial loss to you, then it’s time to consider taking action. You probably want to consider a petition to: 

  1. Surcharge (i.e., get damages against) the Trustee;
  2. Seek prejudgment interest; and
  3. Seek post-judgment interest.

Or you can work to remove them as a Trustee, detecting that they do not have your best interest in mind when reviewing or managing Trust property. Dismissing them as a Trustee as soon as possible is in your best interest. The longer they are in charge of reviewing and managing your Trust assets, the bigger hit you can take on your future payout. 

Know the basics of proper trust administration

Please review our articles on the Beneficiary’s Rights in California and Removing a Trustee in California. If you would still like some more information on Trust Litigation and removing a trustee, check out our complete Overview of California Trust Litigation, available on our website. And if you have more questions about your rights as a beneficiary and what you should know moving forward or want to talk to someone about your case, please call or fill out our Get Help Now form.

If this aligns with what’s happening to you, it’s best to reach out as soon as possible. The longer you take, the more damage your Trust could take. Please call us at (888) 443-6590, and we would be more than happy to see if we can assist you.