Who Has More Rights: Trustee or Beneficiary?
This is a fascinating question that isn’t easily answered because it very often depends on the facts of your situation. The truth is neither the trustee nor the beneficiary has any rights. Trustees have duties and the powers to carry them out. Beneficiaries can ensure their trustee abides by their duties and correctly administers the trust. If they don’t, then the beneficiary can hold their trustee accountable.
An excellent place to start is with the trustee’s duties. The trustee has numerous duties to all the trust’s beneficiaries. The trustee must abide by their duties, or they are at risk of being sued by a beneficiary. If a beneficiary demands a trustee do something that would violate a duty, then the trustee will win that argument. If a beneficiary demands a trustee perform a duty, then the beneficiary is on solid ground. For example, a beneficiary who asks the trustee to account after a year of trust administration is absolutely correct in making the request. A trustee who declines to account or promises to account but never gets around to it is breaching their duty. A beneficiary who can demonstrate a trustee has breached their duty will likely win.
What are the trustee’s duties?
California’s Trust Law gives a trustee numerous duties to carry out their duties to the beneficiaries. Those powers include the duties to:
- Collect and hold trust property
- Add property to the trust
- Make deposits
- Manage trust property
- Make repairs
- Hold securities
- Pay trust expenses
- Hire people
So, Who Has More Rights: Trustee or Beneficiary?
Some beneficiaries run into trouble when they want to instruct a trustee on how to use their powers. For example, a beneficiary may wish the trustee to hire their spouse to sell a trust-owned house, or the beneficiary may want the trustee to make repairs instead of hiring someone to make those repairs. A beneficiary who wants to micromanage a trustee is fighting a losing battle. The trustee is required to act reasonably and serve the beneficiaries’ interests. This means the trustee is not the beneficiaries’ servant.
The trustee who fails to act reasonably exercising their power is another story. A trustee who fails to manage trust property (i.e., leaves a house unrented) has not only failed to use their power, but they have breached their duty. A trustee who repairs himself, but isn’t qualified to do it, has probably caused a loss of value to the repaired property.
More on your Trustee breaching their fiduciary duties
If you would still like more information on Trust Litigation and removing a Trustee, check out our complete Overview of California Trust Litigation, available on our website. Or our article, “20 ways your Trustee can be breaching their fiduciary duties,” for a more in-depth examination of a trustee’s fiduciary duty. And if you have more questions about your rights as a Beneficiary and what you should know moving forward.
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.
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