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Disputes with A Trustee (of a Trust)

Herrig & Vogt Dec. 21, 2015

Unfortunately, there may be times when a trustee of a trust breaches their fiduciary duties to the trust’s beneficiaries. For instance, a trustee may fail to disclose the content and value of the trust assets to the beneficiaries. Even more egregiously, he or she may misappropriate funds or fail to distribute assets to the intended beneficiaries.

Fortunately, the California Probate Code provides that a violation of any duty by the trustee is a breach of trust. The attorneys at Herrig & Vogt are well versed in identifying improper actions (or lack thereof) by a trustee and will advocate on your behalf to protect and restore your interests as a beneficiary.

If a trustee threatens to commit or commits a breach of trust, a beneficiary or co-trustee may commence a proceeding for a variety of purposes. For example, the beneficiary or co-trustee may file an action against the trustee to (1) compel the trustee to perform his or her duties; (2) enjoin the trustee from committing a breach of trust; (3) compel the trustee to redress a breach of trust by payment of money or otherwise; (4) appoint a receiver or temporary trustee to take possession of the trust property and administer the trust; (5) remove the trustee; (6) set aside acts of the trustee; (7) reduce or deny compensation of the trustee; (8) impose an equitable lien or a constructive trust on trust property; or (9) trace trust property that has been wrongfully disposed of and recover the property or its proceeds. Further, a trustee who has occupied property of the estate, while wrongfully excluding the true owner, must at least account for its rental value, even if the trustee made no net profit.

With respect to a trustee’s breach of his or her fiduciary duties, the purpose of the California Probate Code is aimed at making sure the beneficiaries recover any lost assets, or are adequately compensated. Thus, if trust property is wrongfully disposed of by the trustee, the beneficiary may elect to sue for the proceeds, or may recover the reasonable value of the property conveyed, regardless of the amount actually received for it.

In addition, a beneficiary may petition the court to compel the trustee to provide an accounting of the trust if he or she has either: (1) failed to provide an account within 60 days after the beneficiary’s written request, or (2) no report or account has been made within the six months preceding the request. The petition may also be used to compel the trustee to provide a copy of the terms of the trust. In a similar vein, the beneficiary may also contest the trustee’s accounting if he or she believes it was deficient.

If you are the beneficiary of a trust and are experiencing difficulties with a trustee, you are entitled to certain statutorily provided rights. Contact the attorneys at Herrig & Vogt, LLP today for a free consultation to ensure your rights are protected.