TrustTrust LitigationTrustee Duties

Breach of Fiduciary Duty by a Trustee in California?

By September 30, 2026No Comments
Breach of Fiduciary Duty
A fiduciary duty is breached in California whenever a trustee fails to fulfill the legal obligation he has towards a beneficiary; this could involve using the trust’s property for his own advantage, giving preferential treatment to one beneficiary without a valid reason, ignoring the terms of the trust, or handling the assets in a manner that results in financial harm.
That doesn’t mean that every decision you disagree with constitutes a breach.
What matters is what the trust says, what the trustee was supposed to do, what actually took place, and whether the trust or its beneficiaries suffered.
Scott Grossman, founder and lead litigator at The Grossman Law Firm, represents California beneficiaries concerned about possible breaches of fiduciary duty by their trustees, including misconduct, missing assets, delays in asset distribution, self-dealing, and similar matters.

Table of Contents

Key Takeaways

  • Trustees in California have legal duties that govern how they manage trust property and treat beneficiaries.
  • California Probate Code § 16400 sets the basic rule: when a trustee violates a duty owed to a beneficiary, the trustee breaches trust.
  • Common breaches include self-dealing, favoritism, ignoring trust terms, failing to protect assets, and withholding required information.
  • A beneficiary may ask the probate court to compel action, recover property or money, reduce trustee compensation, or remove a trustee.
  • When a breach causes financial harm, the trustee may be financially responsible for the loss.

What Is a Breach of Fiduciary Duty by a Trustee in California?

California Probate Code § 16400 sets the basic rule: when a trustee violates a duty owed to a beneficiary, the trustee breaches trust.
The real challenge is figuring out exactly which duty the trustee may have broken. This is when speaking with a qualified trust litigation attorney can make all the difference.
Although trustees have broad authority to manage trust property, they also have serious legal obligations. They cannot make decisions based solely on personal preference or treat trust assets as if they belong to them.
If you believe a trustee may be mismanaging trust property or violating their duties, contact The Grossman Law Firm for a free case evaluation. Attorney Scott Grossman can review the trust, the trustee’s conduct, and the available evidence to help determine what legal options may be available.

What Fiduciary Duties Does a California Trustee Owe?

The Duty to Follow the Trust

Probate Code § 16000 requires a trustee to administer the trust according to the trust instrument and, unless the trust provides otherwise, California trust law.
A breach could arise if the trust calls for a distribution and the trustee refuses to carry it out without a good reason.

The Duty of Loyalty

Under Probate Code § 16002, a trustee must administer the trust solely in the beneficiaries’ interests.
A related rule under § 16004 generally prohibits a trustee from using trust property for personal profit or participating in transactions where the trustee’s interests conflict with a beneficiary’s.
This is where many self-dealing disputes begin.

The Duty to Treat Beneficiaries Impartially

When a trust has multiple beneficiaries, Probate Code § 16003 requires the trustee to deal impartially with them while considering their different interests.
For example, a trustee who distributes one beneficiary’s share but repeatedly withholds another beneficiary’s equal share without justification may need to explain that decision.

The Duty to Use Reasonable Care

Probate Code § 16040 generally requires a trustee to administer the trust with reasonable care, skill, and caution under the circumstances. California’s Uniform Prudent Investor Act governs investment functions separately.
A trustee who lets valuable property deteriorate or ignores obvious risks to trust assets may harm beneficiaries financially.

The Duty to Keep Beneficiaries Informed

Probate Code § 16060 requires a trustee to keep beneficiaries reasonably informed about the trust and its administration.
Repeatedly refusing to explain significant transactions, missing funds, or the trust’s status can become part of a larger trustee dispute.

What Are Common Examples of Trustee Breach in California?

A potential trustee breach in California can take many forms.
Examples include:
  • Selling trust property below market value to benefit a friend or relative
  • Using trust funds for personal expenses
  • Transferring trust property to themselves
  • Favoring one beneficiary without a trust-based reason
  • Refusing to make distributions required by the trust
  • Allowing trust real estate or other assets to lose value through neglect
  • Failing to provide required information or accountings
  • Making transactions that create an undisclosed conflict of interest
  • Keeping profits earned through improper use of trust property
The details matter. A delayed distribution, poor investment result, or disputed expense does not automatically prove a breach.
The question is whether the trustee violated a legal duty under the trust or California law.
If you suspect your trustee isn’t acting in your best interest, don’t wait. Explore The Grossman Law Firm’s  20 Ways Your Trustee May Be Breaching Their Fiduciary Duties and Tips for Determining the Damages for a Breach of Fiduciary Duties.

What Can a Beneficiary Do About a Breach of Fiduciary Duty?

Beneficiaries do not have to rely entirely on the trustee to correct the problem.
Probate Code § 17200 allows a beneficiary to petition the probate court concerning the internal affairs of a trust, including disputes over trustee duties and beneficiary rights.
If the court finds a breach, Probate Code § 16420 provides several potential remedies. Depending on the circumstances, the court may:
  • Order the trustee to perform required duties
  • Stop an ongoing or threatened breach
  • Require the trustee to pay money or otherwise correct the breach
  • Remove the trustee
  • Reduce or deny trustee compensation
  • Trace trust property that was wrongfully disposed of and seek recovery of the property or its proceeds
The appropriate remedy depends on what happened and what needs correcting.

Can You Recover Money From a Trustee Who Breached Their Duties?

Potentially.
Probate Code § 16440 addresses a trustee’s financial liability after a breach. A trustee may be charged with losses or depreciation caused by the breach, profits the trustee made through the breach, or profits the trust would have earned if the breach had not occurred. The court may excuse some or all liability when the statutory good-faith standard is met.
For beneficiaries seeking financial recovery, proving the loss can be just as important as proving the breach itself.
If hundreds of thousands of dollars disappeared, trust property was sold for substantially less than its value, or the trustee personally profited from a transaction, an attorney can investigate whether the evidence supports financial recovery or if recovery is even possible.

When Should You Contact a Trust Litigation Attorney?

Consider speaking with a trust litigation attorney when the trustee’s conduct affects your inheritance and attempts to get answers have gone nowhere.
That may include missing money, suspicious transfers, prolonged withholding of distributions, self-dealing, unexplained property sales, or repeated refusal to provide information. At The Grossman Law Firm, we recommend acting promptly. If trust assets continue to be spent, transferred, or depleted, your inheritance may be further reduced. By the time you take action, there may be less property or money available to recover.
Attorney Scott Grossman can review the trust, financial records, property transactions, communications, and other evidence to determine whether the trustee’s conduct may constitute a breach of fiduciary duty and what remedies may be available.
Cases involving substantial financial loss may also warrant evaluating whether contingency representation is appropriate.

FAQ

Can I sue a trustee for breach of fiduciary duty in California?

A beneficiary may petition the probate court when a trustee violates duties owed under the trust or California law. As a result, the claims and remedies available depend on the facts.

Does a trustee have to cause financial loss to breach a duty?

Not necessarily. A trustee can violate a duty even when the breach has not yet produced a measurable loss. However, financial recovery generally depends on proving an applicable monetary remedy.

Can a trustee be removed for breach of fiduciary duty?

Potentially. Probate Code § 16420 identifies removal as one available remedy for breach, and Probate Code § 15642 separately provides grounds for trustee removal in qualifying circumstances.

How The Grossman Law Firm Can Help

You do not have to determine on your own whether suspicious trustee conduct rises to the level of a legal breach.
If your trustee has withheld your inheritance, misused trust property, failed to account for assets, or taken actions that reduced the trust’s value, Attorney Scott Grossman can evaluate the evidence and explain what legal remedies may be available.
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 to take the next step.
Our Intake Specialists can evaluate your case and assess your situation at no cost. We will schedule qualifying cases for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published: April 26, 2024