Trustee Breach of Fiduciary Duty in California: What the Law Requires and What Beneficiaries Can Do

A trustee breaches a fiduciary duty in California when the trustee violates any duty owed to the beneficiaries, such as using trust property for personal gain, keeping beneficiaries in the dark, or withholding a required account. A beneficiary or co-trustee may ask the Superior Court to compel performance, order repayment, reduce the trustee's pay, or remove the trustee.

Most people facing this question are not reading out of curiosity. A parent or relative has died, a sibling or family friend now controls the trust, and the house has not been sold, the accounts have gone quiet, or a withdrawal appeared that nobody can explain. Some readers are co-trustees watching the other trustee act alone. Some are trustees who have just been accused and want to know what the law actually asks of them. The common thread is uncertainty about where ordinary delay ends and a legal breach begins.

This page walks through the duties California's Probate Code places on a trustee, the kinds of conduct that break them, what a court can order, how removal works, how a petition reaches the court, and how long a beneficiary has to act. The core idea is simple: under Probate Code section 16400, a violation of any duty the trustee owes the beneficiary is a breach of trust.

What a Trustee's Fiduciary Duty Means Under California Law

A trustee is a fiduciary, which means a person the law holds to a higher standard of loyalty and care than an ordinary person handling someone else's money. The trustee holds legal title to the trust property, but holds it for the beneficiaries, not for themselves. Probate Code section 16002(a) puts the baseline plainly: the trustee has a duty to administer the trust solely in the interest of the beneficiaries.

The duty of loyalty is spelled out in Probate Code section 16004. Subdivision (a) reads:

"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."

Subdivision (c) adds a presumption. A transaction between the trustee and a beneficiary, during the trust or while the trustee's influence remains, by which the trustee gains an advantage from the beneficiary, is presumed to violate the trustee's fiduciary duties. That is a presumption affecting the burden of proof, so the trustee must disprove it. It does not apply to the parts of an agreement covering the trustee's hiring or compensation.

Alongside loyalty sit the duties to inform and report. Under Probate Code section 16060, the trustee must keep the beneficiaries reasonably informed of the trust and its administration. Under Probate Code section 16061, generally (subject to the exceptions in section 16069), the trustee must respond to a beneficiary's reasonable request with information about the administration that is relevant to that beneficiary's interest.

The duty to account is narrower than many people assume. Probate Code section 16062 generally requires an account at least annually, at the end of the trust, and when the trustee changes, but only to each beneficiary to whom income or principal is required, or authorized in the trustee's discretion, to be currently distributed. Not every beneficiary is owed an annual account. A trust instrument or a beneficiary's written waiver can excuse the account, but under Probate Code section 16064 the court may still compel the trustee to account on a showing that a material breach of the trust has reasonably likely occurred.

How a Breach of Fiduciary Duty Occurs: Common Examples Under California Law

Conduct becomes a breach when a trustee fails to perform, or acts against, a duty imposed by the Probate Code or by the trust instrument itself. The examples below are common, but they are not the only ways a breach can happen; any violated duty counts.

Self-dealing. A trustee who lives in a trust-owned house without paying rent, borrows from trust accounts, or sells trust property to themselves or a relative is dealing with trust property for their own profit, which section 16004(a) prohibits.

Conflicts of interest. A trustee who takes part in a deal where their own interest runs against the beneficiary's (for example, buying out a beneficiary's share on favorable terms) raises the same section 16004(a) problem. If the trustee gained an advantage from a beneficiary, the section 16004(c) presumption described above comes into play.

Failing to inform or account. Ignoring written requests for information, refusing to share the trust's terms, or skipping accounts owed to current beneficiaries implicates sections 16060, 16061 and 16062.

Mismanaging trust assets. California law also expects a trustee to manage trust property with care: keeping a house insured and maintained, not letting assets sit idle or lose value through neglect, and not investing recklessly. Letting the trust estate depreciate through careless management can be a breach, and it often appears alongside a failure to act solely for the beneficiaries under section 16002(a).

Excessive or unauthorized compensation. Where the trust instrument is silent on pay, Probate Code section 15681 entitles the trustee to reasonable compensation under the circumstances, not whatever the trustee chooses. Under section 15686(b), a trustee may not charge an increased trustee's fee without first giving at least 60 days' written notice to each beneficiary entitled to an account under section 16062, each beneficiary who received the last account, and each beneficiary who has asked in writing for notice of a fee increase and given an address. Under section 15686(c), if a beneficiary files and serves a section 17200 petition for review of the increase or for removal before those 60 days run, the increase does not take effect until the court orders otherwise or the petition is dismissed.

For a beneficiary looking at bank statements or an empty house and wondering whether it "counts," the useful question is which specific duty the conduct touches.

What Remedies California Law Provides When a Trustee Breaches a Duty

Under Probate Code section 16420(a), if a trustee commits a breach of trust, or threatens to commit one, a beneficiary or co-trustee may start a proceeding for any of these purposes that is appropriate:

• to compel the trustee to perform the trustee's duties;
• to enjoin, meaning stop by court order, the trustee from committing 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 and administer the trust property;
• 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 (a constructive trust is a court order treating property as held for its rightful owner);
• subject to section 18100, to trace trust property that was wrongfully disposed of and recover it or its proceeds.

Section 16420(b) says these remedies do not prevent resort to any other appropriate remedy under statute or common law, so the list is not exhaustive.

Money liability is measured under Probate Code section 16440. A court order charging a trustee with this liability is often called a surcharge. Under subdivision (a), a breaching trustee is chargeable with whichever of the following is appropriate: any loss or depreciation in value 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 lost profit resulted from the breach. A surcharge is not automatic. Under subdivision (b), if the trustee acted reasonably and in good faith under the circumstances as the trustee knew them, the court in its discretion may excuse the trustee in whole or in part if that would be equitable.

A further remedy applies to wrongful taking. Under Probate Code section 859, if a court finds that a person has in bad faith wrongfully taken, concealed or disposed of property belonging to a trust (among other protected estates), or has taken, concealed or disposed of it by undue influence in bad faith or through elder or dependent adult financial abuse, that person is liable for twice the value of the property recovered by an action under that part. The court may also, in its discretion, award reasonable attorney's fees and costs against the person liable. Neither the doubling nor the fees follow without the court's finding, and the fee award remains discretionary. A Probate Code 850 and 859 recovery is often raised together with a breach of trust claim when trust property has gone missing.

These matters reach the court through a petition under Probate Code section 17200, discussed below. Under Probate Code section 17206, the court may make any orders and take any action necessary or proper to dispose of what the petition presents, including appointing a temporary trustee. Whether any remedy is ordered depends on the court's findings in each case.

Removing a Trustee for Breach of Fiduciary Duty

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, co-trustee or beneficiary under section 17200. The settlor is the person who created the trust.

Section 15642(b) lists grounds the court may rely on, including that the trustee committed a breach of the trust; is insolvent or otherwise unfit to administer the trust; is part of hostility or lack of cooperation among co-trustees that impairs administration; fails or declines to act; or receives compensation that is excessive under the circumstances. The section names other grounds as well, so this list is partial. Showing one of these grounds does not make removal automatic; the court decides whether removal fits the facts.

Removal is not the only consequence a breaching trustee faces. Liability under section 16440(a) attaches to the trustee personally. That means a surcharge can be enforced against the trustee's own assets, not only paid out of the trust, subject always to the court's power to excuse a trustee who acted reasonably and in good faith.

On proof, the person bringing the petition generally must show that the trustee violated a specific duty imposed by the Probate Code or the trust instrument. Where the section 16004(c) presumption applies, the burden shifts and the trustee must rebut it. While removal is pending, the court may appoint a temporary trustee under sections 16420(a) and 17206, which can matter when a beneficiary fears property will be sold or spent before a hearing.

How to Petition the Court: The Section 17200 Process

The formal step is a petition. Under Probate Code section 17200(a), a trustee or beneficiary may generally petition the court concerning the internal affairs of the trust or to determine whether the trust exists, subject to section 15800. In California these petitions are heard by the Superior Court for the relevant county; the California courts website describes the Superior Court system generally.

Section 17200(b) lists proceedings that count as internal affairs, and says they include but are not limited to: construing the trust instrument; deciding whether an immunity, power, privilege, duty or right exists; deciding whether a trust provision is valid; ascertaining beneficiaries and who receives property on termination, where the instrument does not decide it; settling accounts and passing on the trustee's acts, including discretionary powers; instructing the trustee; compelling the trustee to act; granting powers; fixing or reviewing the trustee's compensation; appointing or removing a trustee; and accepting a trustee's resignation.

Two compelling petitions have built-in waiting periods under section 17200(b)(7). A petition to compel information under section 16061 is available if the trustee has not provided requested information within 60 days after the beneficiary's reasonable written request and the beneficiary has not received that information within the six months before the request. A petition to compel an account, subject to section 16064, is available if the trustee has not submitted a requested account within 60 days after written request and no account has been made within the six months before the request. Section 17200(b)(7) also allows a petition to compel the trustee to provide a copy of the trust's terms.

A petition alleging breach may ask for any remedy section 16420 lists, and the court may shape its orders under section 17206. More detail on the section 17200 petition is available elsewhere on this site. Challenges to whether the trust itself is valid follow a different path, covered in the page on how to contest a trust.

The Statute of Limitations for Breach of Trust Claims in California

Probate Code section 16460(a) sets two separate three-year periods, and which one applies depends on what the beneficiary received. Unless a claim is already barred by adjudication, consent, limitation or otherwise, the periods are as follows.

First branch: an account or report that discloses the claim. If a beneficiary received an interim or final written account, or other written report, that adequately discloses the existence of a claim against the trustee, the claim is barred as to that beneficiary unless a proceeding is commenced within three years after receipt. The statute says an account or report adequately discloses a claim if it gives enough information that the beneficiary knows of the claim or reasonably should have inquired into it.

Second branch: no adequate disclosure. If the account or report does not adequately disclose the claim, or the beneficiary never received any written account or report, 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.

Neither branch runs simply from the date of the breach or from the settlor's death. Whether a particular account "adequately discloses" a claim is a factual question for the court, which is why the dates and contents of every account and letter a beneficiary has received tend to matter. Section 16460(b) also sets rules for when a beneficiary is deemed to have received an account, including for adults not reasonably able to understand it and for minors.

If You'd Like to Talk Through a Trustee Dispute

Breach of trust claims turn on details: which duty the trust and the Probate Code impose, which accounts or letters were sent and when, and what the trustee actually did with the house, the accounts or the business. An attorney looking at a dispute like this would typically want the trust instrument and any amendments, every account or written report received, written requests made to the trustee and any responses, and records of the transactions in question. This page is not written for someone setting up a trust or handling an administration where nobody disagrees.

To discuss a trustee dispute with an attorney, you can request a consultation about your dispute through California Trust Litigation Lawyers.