By Roger J. Buffington, Esq.
Buffington Law Firm’s trust litigation attorneys are often assigned the task of taking court action to suspend or remove a trustee who is committing breach of trust. Under California law, once a trust becomes irrevocable a trustee or successor-trustee has well-defined fiduciary duties that he or she owes to the trust beneficiaries. These duties include protecting the trust assets, efficient administration of the trust, and of course carrying out the written provisions of the trust fairly and impartially. The whole idea behind trusts is that the trustee is supposed to carry out these duties without any supervision from the probate courts, as would be required in a will probate, i.e. an estate in which a will, rather than a trust, is the operative instrument for carrying out the decedent’s testamentary wishes. When trustees carry out their duties correctly, trusts can be a quicker and cheaper way to wrap up an estate than by a court-supervised will probate. Will probates take time, are supervised by a judge, and require legal expense and court resources. In California, trusts are intended to avoid most or all of this. Sometimes they do.
Unfortunately, not all trustees carry out their responsibilities in accordance with the law. Not uncommonly, a trustee may abuse his or her position by delaying distribution of trust assets for a long period of time, sometimes for years, sometimes taking up rent-free residence in a home that the trust owns, charging personal expenses to the trust, and maximizing the trustee’s own benefits to the exclusion of the other trust beneficiaries. Often a successor-trustee will keep the beneficiaries in the dark and refuse to provide a trust accounting or otherwise inform the beneficiaries of the status of the trust or the plan for carrying out its provisions. Other times, a successor-trustee simply does nothing at all. When these things happen, the beneficiaries, who usually are not lawyers, often do not know how to handle such breaches of trust. At the initial stages of this situation there is no court involvement in the trust administration and thus no immediate way to put a stop to trustee misbehavior.
In these situations, involving misbehaving trustees, the beneficiaries need legal assistance. A trustee who fails and refuses to keep beneficiaries informed of trust finances and administration is in violation of California Probate Code Sections 16060, 16062, and other provisions of the law. California Probate Code Section 17200 provides that a trust beneficiary can petition the probate court to instruct a trustee to carry out trust provisions, keep the beneficiaries informed of the trust assets, finances, and administration, and the like. California Probate Code Section 17206 explicitly provides that the probate court has the power to suspend a trustee or issue any orders that the Court deems necessary to protect the trust and its beneficiaries or otherwise effectuate efficient trust administration. This can force a trustee to stop his or her breaches of trust and otherwise to behave correctly. Failing that, the Court can appoint a replacement successor-trustee. Of course, all of this requires court action if the trustee has refused demands by the beneficiaries outside of court.
When this is necessary, normally the beneficiaries will retain legal counsel, and legal counsel will bring a trust petition before the probate court. By filing such a petition, the trust is formally moved within the jurisdiction and powers of the probate court. Once this occurs, the probate court can issue orders to correct the breaches of trust that it finds to have occurred. It can do so on an interlocutory (before trial) basis, or the Court can simply set the matter for trial in order to determine what actions the Court shall take. Even better, not infrequently once beneficiaries bring a trust petition the trustee will deal with the beneficiaries with greater respect, and the problems can be resolved by settlement. These dynamics will be the subject of future Blog articles here on this site.
Buffington Law Firm has decades of experience in trust litigation and dealing with problem trustees. If you are confronted with a problem trustee, we invite you to contact us for a Free Legal Consultation. In our Firm’s free consultation process you will speak directly with an experienced trust litigation attorney, there is no charge, and the discussion is completely confidential and protected by attorney-client privilege. We invite you to contact us immediately!