Co-Trustee Disputes in California: What the Law Allows Each Side to Do

When co-trustees in California disagree, the trust usually cannot act at all, because co-trustees must decide unanimously unless the trust document says otherwise. Either a trustee or a beneficiary can ask the Superior Court to step in. The court can instruct the trustees, appoint a temporary trustee, remove a trustee, or order repayment for a breach.

Most people facing a co-trustee dispute are living inside a stalemate. Two siblings named to serve together will not return each other's calls, the family house sits unsold, a brokerage account goes unmanaged, or one trustee has started signing checks and making decisions the other never saw. A beneficiary may be watching all of this from the outside, unsure who is right and unsure whether anyone is allowed to fix it. Sometimes the person reading is a trustee who has been accused of misconduct and wants to know what the other side can actually do.

This article explains how California law treats trustees who serve together, what happens when they deadlock, what each one owes the beneficiaries and each other, and what a California court may order when the relationship breaks down.

What California Law Requires of Co-Trustees

A co-trustee is one of two or more people or institutions holding the trustee role at the same time. Co-trustees are different from successor trustees. Successor trustees serve one after another and take over only when an earlier trustee dies, resigns or is removed. Co-trustees serve side by side and share control of the same property at once.

The starting rule comes from Probate Code section 15620: "Unless otherwise provided in the trust instrument, a power vested in two or more trustees may only be exercised by their unanimous action." In plain terms, both co-trustees, or all of them, must agree before the trust can act. The trust instrument, meaning the written trust document itself, can change that default. Some trusts allow a majority vote, give one trustee authority over certain assets, or name a tie-breaker. When a dispute starts, one of the first questions is what this particular document says about decision-making.

Probate Code section 16013 adds a duty that many co-trustees do not realize they carry. Each trustee must "participate in the administration of the trust" and "take reasonable steps to prevent a cotrustee from committing a breach of trust or to compel a cotrustee to redress a breach of trust." A co-trustee cannot simply step back and let the other one run everything. A breach of trust is any violation of a duty the trustee owes under the trust or under the law.

Probate Code section 15621 covers a related situation. Unless the trust instrument says otherwise, if one co-trustee's seat becomes vacant, the remaining co-trustee or co-trustees "may act for the trust as if they are the only trustees." This rule matters later, when removal is on the table.

The Unanimity Rule and What Happens When Co-Trustees Deadlock

A deadlock is more than a disagreement. Under section 15620, if one co-trustee refuses to sign, the trust generally has no power to act on that matter. Rent may go uncollected, a property tax payment may be missed, investments may sit unattended, and distributions owed to beneficiaries may stop. The stalemate itself can harm the people the trust exists to serve.

California law gives a way out. Under Probate Code section 17200(a), "a trustee or beneficiary of a trust may petition the court... concerning the internal affairs of the trust or to determine the existence of the trust," except as section 15800 provides. Internal affairs means how the trust is being run: who decides, what the document means, whether a trustee is doing the job. Trust cases in a county are heard by the Superior Court of California for that county. This site's overview of a Probate Code 17200 petition walks through that procedure in more detail.

Once a petition is before the court, Probate Code section 17206 gives the judge wide room: the court "in its discretion may 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." A temporary trustee can keep the trust running while the dispute is decided.

Persistent deadlock can also become a reason to remove someone. Among the grounds for removal in Probate Code section 15642(b) is "where hostility or lack of cooperation among cotrustees impairs the administration of the trust." That list of grounds is partial. The removal section below covers it more fully.

Each Co-Trustee's Duty to Monitor the Other

Section 16013 makes every co-trustee a watchdog over the others. If one co-trustee is moving money into a personal account or selling trust property to a friend, the other cannot treat it as someone else's problem. The duty is to take reasonable steps to prevent the breach, and if it has already happened, to take steps to force the co-trustee to make it right. Whether a co-trustee who stood by while a fellow trustee caused harm is responsible depends on the facts the court finds, including what that co-trustee knew and what steps were reasonable.

Each co-trustee individually owes the duty of loyalty in Probate Code section 16004(a): "The trustee has a duty not to use or deal with trust property for the trustee's own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary." When people talk about self-dealing, this is the rule they mean. A co-trustee living rent-free in a trust house or lending trust money to a business they own raises questions under this section.

Section 16004(c) adds a presumption. A transaction between a trustee and a beneficiary, during the trust or while the trustee's influence over the beneficiary remains, by which the trustee obtains an advantage from the beneficiary, "is presumed to be a violation of the trustee's fiduciary duties." This is a presumption affecting the burden of proof, which means the trustee must show the transaction was fair rather than the beneficiary having to prove it was not. The presumption does not apply to agreements about hiring or paying the trustee.

Co-trustees also share duties to the beneficiaries. Under Probate Code section 16060, each trustee must "keep the beneficiaries of the trust reasonably informed of the trust and its administration." Under section 16061, except as section 16069 provides, on a beneficiary's reasonable request the trustee must provide requested information about the administration of the trust that is relevant to that beneficiary's interest. For a beneficiary receiving conflicting stories from two trustees, these duties are often the first practical tool.

What Beneficiaries Can Do When Co-Trustees Disagree or One Trustee Misbehaves

Probate Code section 16420(a) sets out what a beneficiary or co-trustee may ask a court to do when a trustee commits, or threatens to commit, a breach of trust. The listed purposes are to compel the trustee to perform the trustee's duties; to enjoin, meaning order a stop to, a breach; to compel the trustee to redress a breach by payment of money or otherwise; to appoint a receiver or temporary trustee to take possession of the trust property and administer the trust; to remove the trustee; subject to section 18100, to set aside acts of the trustee; to reduce or deny the trustee's compensation; subject to section 18100, to impose an equitable lien or a constructive trust on trust property; and, subject to section 18100, to trace wrongfully disposed trust property and recover it or its proceeds. A constructive trust is a court order treating property as held for its rightful owner. Section 16420(b) says these remedies "do not prevent resort to any other appropriate remedy provided by statute or the common law," so the list is not the outer limit.

When the problem is silence, section 17200(b)(7) gives specific petitions. A beneficiary may petition to compel information under section 16061 if the trustee has failed to provide requested information within 60 days after the beneficiary's reasonable written request and the beneficiary has not received the requested information within the six months before the request. A beneficiary may petition to compel an account, subject to section 16064, if the trustee has failed to submit a requested account within 60 days after written request and no account has been made within the six months before the request.

The duty to account, meaning to give a formal written report of what came in, what went out and what remains, does not run to every beneficiary. Under Probate Code section 16062(a), subject to that section's exceptions and section 16064, the trustee must account at least annually, at the termination of the trust, and upon a change of trustee, "to each beneficiary to whom income or principal is required or authorized in the trustee's discretion to be currently distributed." A beneficiary who will inherit only later may not be in that group. Section 16064 allows waivers in the trust document or in a beneficiary's own writing, with limits, but even with a waiver, "upon a showing that it is reasonably likely that a material breach of the trust has occurred, the court may compel the trustee to account."

Probate Code section 859 reaches more serious conduct. If a court finds that a person has in bad faith wrongfully taken, concealed or disposed of property belonging to a trust, or has taken, concealed or disposed of it by undue influence in bad faith or through elder or dependent adult financial abuse as defined in California's elder abuse statutes, that person is liable for twice the value of the property recovered by an action under that part. The person may also, in the court's discretion and except as otherwise required by law, be liable for reasonable attorney's fees and costs. Neither the doubled amount nor fees follow automatically from a disagreement; each depends on the court's findings.

Removing a Co-Trustee in California

Under Probate Code section 15642(a), "a trustee may be removed in accordance with the trust instrument, by the court on its own motion, or on petition of a settlor, cotrustee, or beneficiary under Section 17200." The settlor is the person who created the trust. A co-trustee can therefore ask the court to remove a fellow co-trustee, and a beneficiary can ask to remove either.

The grounds in section 15642(b) include a breach of trust; the trustee being insolvent or otherwise unfit to administer the trust; hostility or lack of cooperation among co-trustees that impairs administration; the trustee failing or declining to act; and compensation that is excessive under the circumstances. The section lists further grounds as well, so this summary is partial. Hostility alone is not the test. The question is whether the conflict impairs the running of the trust.

Compensation disputes often travel with removal petitions. If the trust instrument does not set the trustee's pay, Probate Code section 15681 entitles the trustee to "reasonable compensation under the circumstances." Under section 15686(b), a trustee may not charge an increased fee without first giving at least 60 days' written notice to each beneficiary entitled to an account under section 16062, each beneficiary given the last account, and each beneficiary who has asked in writing for notice of fee increases and given an address. Under section 15686(c), if a beneficiary files a section 17200 petition to review the increased fee or to remove the trustee and serves it on the trustee before the 60 days run, the increase does not take effect until the court orders otherwise or the petition is dismissed.

Removing one co-trustee does not end the trust. Under section 15621, unless the instrument says otherwise, the remaining co-trustee may act as if they are the only trustee, and under section 17206 the court may appoint a temporary trustee while matters are sorted out.

Surcharge, Liability, and the Statute of Limitations

A surcharge is a court order making a trustee personally pay for harm caused by a breach. Under Probate Code section 16440(a), a trustee who commits a breach of trust is chargeable with whichever of these is appropriate: any loss or depreciation in value of the trust estate resulting from the breach, with interest; any profit the trustee made through the breach, with interest; or any profit that would have accrued to the trust estate if the loss of profit resulted from the breach.

Surcharge is not automatic. Under section 16440(b), if the trustee "has acted reasonably and in good faith under the circumstances as known to the trustee," the court in its discretion may excuse the trustee in whole or in part if that would be equitable. For a co-trustee accused of going along with a decision, what that trustee knew at the time can matter a great deal.

Time limits apply, and Probate Code section 16460(a) has two branches. If a beneficiary has received an interim or final written account, or other written report, that adequately discloses the existence of a claim, the claim is barred unless a proceeding is commenced within three years after receipt. If no account or report adequately discloses the claim, or the beneficiary received none, the claim is barred unless a proceeding is commenced within three years after the beneficiary discovered, or reasonably should have discovered, the subject of the claim.

The first branch can catch people off guard. An account adequately discloses a claim if it gives enough information that the beneficiary knows of the claim "or reasonably should have inquired into the existence of the claim." The clock on that branch turns on what the account disclosed and when it was received, not on whether the beneficiary studied it. For anyone who has a stack of unopened trustee reports, that distinction is worth understanding.

When a Co-Trustee Dispute Reaches the California Superior Court

Trust disputes in California are heard by the Superior Court of California for the county involved, often in its probate division. The petition is the starting document: a written request explaining who the parties are, what the trust says, what has gone wrong and what orders the petitioner wants. The other trustees and beneficiaries receive notice and may respond.

The court's authority is broad. Section 17200(a) covers the internal affairs of the trust and its existence, except as section 15800 provides, and section 17200(b) says the proceedings it lists are included "but are not limited to" that list. Those listed purposes include construing the trust document, settling accounts and passing on the trustees' acts, instructing the trustee, compelling information or an account, fixing or reviewing the trustee's compensation, appointing or removing a trustee, and compelling redress of a breach "by any available remedy." A deadlocked pair of co-trustees can ask the court for instructions just as a beneficiary can ask it to investigate misconduct.

Section 17206 then lets the judge make any order necessary or proper to dispose of what the petition raises, including a temporary trustee. A broader view of how these cases unfold, from contest deadlines to recovery of property, appears on this site's page about California trust litigation. If the disagreement is really about whether the trust or an amendment is valid at all, the page on how to contest a trust addresses those separate rules.

If You'd Like to Talk Through a Co-Trustee Dispute

Co-trustee disputes turn on details that a general article cannot reach: the exact decision-making language in the trust document, which beneficiaries are entitled to accounts, what written requests were sent and when, and what each trustee knew about the transactions in question. A consultation with an attorney would typically look at the trust instrument and any amendments, the accounts and reports received and their dates, correspondence between the trustees, and records of the transactions at issue, and an attorney can say which petitions, remedies and deadlines apply to those facts. This page is written for people already in a dispute; readers whose trust is running smoothly and who simply have planning questions are not its audience.

To discuss a disagreement between co-trustees with an attorney, you can request a consultation about your dispute through California Trust Litigation Lawyers.