Breach of Trust & Fiduciary Duties in California

Hackard Law regularly assists trustees and beneficiaries in disputes where breach of trust and breach of fiduciary duties are alleged against a trustee or co-trustee by a trust beneficiary.

The question that is often asked concerns what statutory remedies for a trustee or co-trustee’s breach of trust apply in California probate courts? The following statute applies whether the case is in Sacramento County Probate Court, El Dorado County Probate Court, Placer County Probate Court, and Alameda County Probate Court or in any of the other 54 counties in California.

Probate Code Section 16420. (a) If a trustee commits a breach of trust, or threatens to commit a breach of trust, a beneficiary or cotrustee of the trust may commence a proceeding for any of the following purposes that is appropriate:

(1) To compel the trustee to perform the trustee’s duties.

(2) To enjoin the trustee from committing a breach of trust.   (3) To compel the trustee to redress a breach of trust by payment of money or otherwise.

(4) To appoint a receiver or temporary trustee to take possession of the trust property and administer the trust.

(5) To remove the trustee.

(6) Subject to Section 18100, to set aside acts of the trustee.   (7) To reduce or deny compensation of the trustee.

(8) Subject to Section 18100, to impose an equitable lien or a constructive trust on trust property.

(9) Subject to Section 18100, to trace trust property that has been wrongfully disposed of and recover the property or its proceeds.

(b) The provision of remedies for breach of trust in subdivision (a) does not prevent resort to any other appropriate remedy provided by statute or the common law.

16421: The remedies of a beneficiary against the trustee are exclusively in equity.

What can you get in the way of damages when there is a breach of trust by a California trustee? The California Probate Code also deals specifically with trust damages, or damages in a trust lawsuit. California Probate Code Section 16440(a) deals with damages for a trustee’s breach of trust.

The statutory law on trustee damages includes the following:

Probate Code Section 16440. (a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances:

(1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest.   (2) Any profit made by the trustee through the breach of trust, with interest.   (3) Any profit that would have accrued to the trust estate if the loss of profit is the result of the breach of trust.   (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 from liability under subdivision (a) if it would be equitable to do so.

Contact an experienced probate, estate and trust litigator today Whether you are an estate trustee or co-trustee accused of wrongdoing or a beneficiary suspecting wrongdoing, experienced trust litigation attorneys can assist you. The most important thing in these situations is for you to secure good counsel. The simple truth is that experience counts.