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California Trust Litigation: Removing a Misbehaving Trustee

by | Oct 4, 2022 | Firm News

One of the most common issues that Buffington Law Firm’s California Trust Litigation team deals with is the issue of misbehaving trustees of California living trusts, and how to remove them as appropriate.  There is probably no more common topic or litigation goal in California Trust litigation than the question of trustee removal, when is it appropriate, and perhaps most importantly, how do you get a court to order the removal or suspension of a trustee or successor-trustee?  Buffington Law Firm has succeeded many times in persuading courts to remove misbehaving trustees or, in the alternative, defending trustees against such claims.  In this short Blog article we will discuss some of the basics concerning this.

The issue of how to deal with misbehaving trustees has become very much more common over the past ten or fifteen years, as the Baby Boom generation has begun to inherit via living trusts.  In earlier times trust litigation involving trustees was much less common and most inheritances proceeded via will, which is a much older procedure.  The result is that many courts and judges are not familiar with the law concerning trusts or with certain aspects of the trust litigation process.  This presents a challenge for trust litigators because often it is necessary to “educate” a given court concerning the remedies available to a claimant and the powers available to a court to provide such remedies.

From a legal standpoint, a court has broad equitable powers to issue any order to carry out its “express powers to supervise the administration of the trust.”  [Schwartz v. Labow (2008) 164 CA4th 417, 427-428].  The court may appoint or remove a trustee [Probate Code § 17200(b)(10)] and make any orders and take any other action necessary or proper to dispose of the matters presented by the petition, including appointment of a temporary trustee to administer the trust in whole or in part [Probate Code §§ 17206, 15642(e); see also Estate of Heggstad (1993) 16 CA4th 943, 951 (probate court has inherent power to decide all incidental issues necessary to carry out its express powers to supervise administration of the trust.)].  However, merely because a court has such powers, this does not mean that a court will exercise them lightly.  Generally it takes a considerable amount of evidence to persuade a court to remove a trustee.  Often, a trust beneficiary or claimant will be frustrated because he or she knows the trustee personally and is absolutely convinced that any reasonable person would see that the trustee should not be serving as such, and seeks to immediately obtain a court order to suspend or remove the trustee.  While this is sometimes feasible and appropriate, we must remember that California law essentially holds that courts will give a considerable amount of deference to the written wishes of the trustmaker (“Trustor”) of the trust whereby he or she appointed a given person as trustee.  Thus, it requires a considerable amount of objective evidence of trustee malfeasance before a court will remove or suspend a trustee.

In California Trust litigation, the first step is virtually always to bring a petition before the probate court.  Before and until this is done, the probate court does not have jurisdiction to do much of anything concerning a trust.  In California, trusts are designed to operate without court supervision, in complete contrast to wills, which almost always require a court supervised probate process.  Once a petitioner brings and serves a trust petition the probate court acquires broad jurisdiction over the applicable trust.  Probate Code Section 17206, as further set forth by Schwartz v. Labow, supra, provides the court with broad authority to grant motions and issue orders concerning the trust even before the court actually rules on the underlying petition.  This point is critical, and often misunderstood.  Misunderstood by courts.  In more than one instance our Firm’s trust litigation team has been confronted by judges who flat-out deny that they have the power to grant interim (“interlocutory”) relief dealing with the internal affairs of a trust, such as appointing or suspending a trustee, orders concerning the interim disposition of trust properties, etc.  One judge flatly stated that to issue such orders would “undermine the petition process” and that “courts act by means of petitions.”  Such is sometimes the nature of trust litigation; happily not all that frequently. Probate Code § 15642(b) sets forth the grounds for the removal of a trustee by the court. The grounds for removal of a trustee by the court include (but are not limited to) the following:  1) Where the trustee has committed a breach of the trust;  2) Where the trustee is insolvent or otherwise unfit to administer the Trust; 3) Where hostility or lack of cooperation among cotrustees impairs the administration of the trust; 4) Where the trustee fails or declines to act; … 9) For other good cause.  [Cal. Probate Code §15642(b)].

Often the best route towards eventually removing a trustee is to bring a Petition for Instruction asking the probate court to order the trustee to do certain, appropriate things.  This can be followed up by a Probate Code Section 17206 motion to remove a failing trustee once the trustee demonstrably fails to act.  Each case is different and courts differ widely in their willingness to act before the actual Petition is tried.

If you are confronted by a misbehaving trustee, Buffington Law Firm’s trust litigation team invites you to give us a call for a free legal consultation.  All discussions are with experienced trust litigation attorneys, the attorney-client privilege applies, and there is never any obligation.  Call us today!