Trustee’s Duty – Delegation of Duties
It is quite common for a trust beneficiary to be concerned their trustee is not doing any work themselves to administer the trust. While a trustee is in charge of the trust and remains responsible for the administration of a trust, that does not mean the trustee must perform all the tasks on their own.
If a trust is being administered in California, then the trustee has a duty not to delegate to others acts the trustee can reasonably be required to personally perform. A person may not transfer the office of the trustee to another person nor delegate the entire administration of the trust to a co-trustee or another person.
Trustee’s Personal Performance
The question, of course, is what acts the trustee can reasonably be required to personally perform. The answer will be specific to the facts of your case. For example, many trusts hold real estate. Suppose your trustee is responsible for selling a single-family home owned by the trust. In nearly all circumstances, the trustee should interview potential real estate agents, assess their abilities, and choose one. Let’s assume that the same house has plumbing problems that need to be fixed. It’s reasonable for the trustee to pay a licensed plumber to make those repairs.
A trustee cannot escape liability by transferring the office of the trustee to another person. In other words, the trustee can’t simply appoint someone to take their place unless the trust specifically gives them this power.
Similarly, the trustee cannot escape responsibility by delegating everything to their co-trustee or another person. Co-trustees don’t have to do an equal amount of work but it’s unacceptable for one to do everything and the other one to do nothing. It’s also unacceptable for a trustee to delegate all their responsibilities to another person like their spouse or their child. As I’ll explain in a moment, delegating some work is acceptable. Simply giving all the work to someone else is not.
Trust Must Supervise Delegated Matters
Where the trustee has properly delegated a matter to another person, the trustee has a duty to exercise general supervision over the person performing the delegated matter. For example, a trustee supervising a real estate agent should have some idea of the market value of the house, the effort being made by the real estate agent to sell the house, and personally, evaluate the offers made to buy the home. A trustee may not have any idea if a plumber has used the correct pipe or the right type of solder, but every trustee can tell whether the repair stopped a water leak.
One important exception
There is one very important exception to this rule. It does not apply to the investment and management of trust assets.
What to Do if Your Trustee Is Improperly Delegating Tasks
If your trustee is improperly delegating tasks they should personally perform, then it is time to decide what to do. If the delegation is annoying, but not causing you any financial harm, then it isn’t worth suing over. For example, a trustee sends their spouse to the bank to deposit trust funds into a trust-owned account. That’s aggravating, but it isn’t costing you any money. You are probably best served by letting it go.
If the trustee has their spouse making repairs or improvements to trust-owned real estate, which the spouse is unqualified to do, it’s a different discussion. Failing to pull required permits, doing substandard work, or failing to abide by the electrical or plumbing code are real problems. All of them are likely to reduce the value of real estate. That type of problem won’t fix itself. You must take action to make things change.
Depending on what your trustee has done, and may do in the future, you may want to consider a petition to:
- Suspend the trustee during the course of litigation
- Remove the trustee and/or
- Surcharge (i.e. get damages against) the trustee