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What Are a Trustee’s Duties in California?

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The trustee acts in a fiduciary capacity with regard to the beneficiaries, and his or her many duties are codified in the Probate Code as shown below. As such, a trustee is accountable not only to the beneficiaries but, most notably, to the probate court. Trustees can face penalties for miss-stepping, misusing powers, misguiding, or failing to understand and properly guide the administration of a trust.

A trustee is not only held accountable but can also be punished (surcharged) for breaching his or her duties to the beneficiaries. When a trustee is a professional (such as a CPA, a financial advisor, or an attorney), he or she is held to an even higher standard of care. It is important to understand and abide by the duties, liabilities, and responsibilities attributed to trustees.

Call our Los Angeles trust administration attorney at (310) 935-0706 to learn more about your rights and responsibilities. Free consultations are available.

What Does a Trustee Do?

A trustee is accountable to the trust beneficiaries and must fulfill many important responsibilities in a timely manner. Trust beneficiaries have many rights against a trustee who does not fulfill the duties the law imposes on him or her.

Trustees can be severely punished by the court if they engage in conflicts of interest, commingling of trust and personal assets, mismanagement of trust property, taking excessive trustee fees, or avoiding contact and communication with the beneficiaries. Most often trustees get in trouble for not sending out the statutory notification by trustee advising the beneficiaries of their rights to contest the trust; or, for not providing detailed trust accounting within the time prescribed by law when presented with a written demand for accounting. In some cases, trustees can be surcharged for breaching their duties.

Trustee Duties as Outlined by the Probate Code

TRUSTEE DUTIES
Duty Probate Code Section Brief Description
Duty to administer trust §16000 You have a duty to follow the terms of the trust and the law governing the administration of trusts.
Duty of loyalty §16002 You have a duty to administer the trust solely for the benefit of the beneficiaries of the trust.
Duty to deal impartially with beneficiaries §16003 You have a duty to not favor the interests of one beneficiary over another, except to the extent that the trust provides to the contrary.
Duty to avoid conflict of interest §16004 You have a duty to avoid transactions with the trust that will benefit you personally.
Duty not to require beneficiary to relieve trustee of liability §16004.5 You cannot require a beneficiary to waive their rights as a condition of distribution.
Duty not to undertake adverse trust §16005 You may not act as trustee of any other trust that has a competing interest with this trust.
Duty to take control of and preserve trust property §16006 You must marshal trust assets and take reasonable steps to preserve them.
Duty to make trust property productive §16007 Subject to certain exceptions, you have a duty to make the trust assets profitable. The subject of trust investments is complicated, and we will discuss this area with you in detail.
Duty to keep trust property separate and identified §16009 This is one of the most important duties you have. You have a duty to keep the assets and debts of the trust separate from your own. In other words, you should not commingle funds.
Duty to enforce claims §16010 You must take reasonable actions to pursue amounts that may be owed to the trust.
Duty to defend actions §16011 You have the duty to take actions to prevent a loss to the trust, such as by defending a lawsuit.
Duty not to delegate; exception §16012 Subject to certain exceptions, you must perform actions on behalf of the trust yourself rather than having others act on behalf of the trust.
Duty with respect to co-trustees §16013 If you serve along with a co-trustee, you each have a duty to participate in the administration and prevent the other from committing a breach of the trust.
Duty to use special skills §16014 In managing the trust property, you must use at least ordinary business ability. However, if you have special skills, you will be held to a higher standard of care.
Duty to provide information to beneficiaries §§16060-16064 You have a number of duties related to providing financial and other information to beneficiaries (and in some cases, the settlor’s family members). We will discuss these duties with you in detail.
Discretionary powers to be used reasonably §§16080,

16081

Even if the trust provides that a particular action is entirely within your discretion, you have a duty to act reasonably in exercising that discretion.

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