No, a trustee generally cannot keep everything for themselves. Trustees have a fiduciary duty to manage and distribute assets solely for the benefit of the beneficiaries as defined in the trust document. While they manage, invest, and sometimes hold assets, they cannot treat trust property as their own personal piggy bank.
On the one hand, trustees do have a tremendous amount of power over the trust and its assets. In legal terms, they are referred to as the legal owner of the trust assets. They control, manage, and ultimately distribute the trust assets. Whereas the trust beneficiaries are merely the beneficial owners.
Generally, a beneficiary cannot simply "override" a trustee just because they disagree; the trustee has authority to manage assets per the trust document, but beneficiaries can take legal action to challenge a trustee who is breaching their fiduciary duty, failing to follow trust terms, or mismanaging assets, potentially leading to court-ordered changes or trustee removal. Actions like self-dealing, refusing information, or reckless investments are grounds for intervention, often requiring court petitions to compel action or replace the trustee, especially if the trust document doesn't provide simpler out-of-court mechanisms.
A trustee cannot use trust assets for personal gain, engage in self-dealing, favor one beneficiary over another, fail to follow the trust document's terms, or neglect duties like communication or accounting; they must act impartially, prudently, and solely in the best interests of all beneficiaries, avoiding conflicts of interest and improper delegation.
When an estate is held in a trust, the trustee holds the legal title to the assets, acting as the official owner on paper, while the beneficiaries hold the equitable title, meaning they are entitled to benefit from the assets as the trust document specifies, with the trustee managing everything for their benefit.
So, now you know that the Trust Maker holds the most power before the Trust is established, but the Trustee holds the most power after the Trust is established.
Unless the terms of the trust state otherwise, a trustee generally has power under California law to sell assets without obtaining approval from all the beneficiaries.
Even if you do have some nonexempt property — meaning it isn't fully protected — the trustee won't automatically take it. They usually only go after assets that are valuable enough to justify the time and cost of selling them.
The first duties of a successor trustee are to find the trust document, tell the beneficiaries about the trust, make a list of the trust property, protect the trust property, and manage the trust property. These duties are essential to the proper administration of a trust.
Trustees can usually be dismissed through a no-confidence process, as long as this is part of your rules. This process can either be carried out by the other trustees, or by the members. If you don't have a process set out in your governing documents, you may be able to refer to the Trustees Act (section 36).
No, a trustee cannot change a will. A will is a legal document that becomes irrevocable upon the death of the person who made it, known as the testator. The trustee's role is to manage and distribute the assets of a trust in accordance with the terms set forth by the testator, not to alter those terms posthumously.
If you are the beneficiary of a Trust, you may be surprised to learn that the Trustee is the person, the only person, who decides what to do with your Trust assets. Whether it is buying, selling, paying, or bartering, the Trustee calls the shots. That's just how Trusts work.
Power of delegation – a trustee is able to instruct professional advisers where necessary and appropriate. Power of insurance – a trustee has the power to insure any trust asset against damage. Power of advancement – a trustee has discretion to advance capital of the trust to a beneficiary.
The trustee must begin administering the trust promptly, but there is no strict deadline for transferring a house unless specified. Most distributions are expected to happen within a reasonable period, typically 12–18 months, unless the trust specifies otherwise or complex issues arise.
A revocable living trust will not protect your assets from a nursing home. This is because the assets in a revocable trust are still under the control of the owner. To shield your assets from the spend-down before you qualify for Medicaid, you will need to create an irrevocable trust.
A trustee can sell trust real estate, but must follow the trust's terms and the California Probate Code. Trustees must act in the best interests of the beneficiaries and obtain fair market value for the property. Certain sales may require court approval before they can proceed.
A living trust does not protect your assets from a lawsuit. Living trusts are revocable, meaning you remain in control of the assets and you are the legal owner until your death.
A trustee cannot use trust assets for personal gain, engage in self-dealing, favor one beneficiary over another, fail to follow the trust document's terms, or neglect duties like communication or accounting; they must act impartially, prudently, and solely in the best interests of all beneficiaries, avoiding conflicts of interest and improper delegation.
Can you sell inherited property if the other heirs say no? Yes—you can. That answer surprises many California heirs. When multiple heirs inherit real estate in California, it's not uncommon for disagreements to arise—especially when one heir wants to sell the property but others do not.
The trustee has the power to manage, control, divide, develop, improve, exchange, partition, change the character of, or abandon trust property or any interest therein.
The state that you live in will determine the property you can keep. Your state might require you to use the state exemptions (laws that protect certain property from creditor claims and keep the property out of the trustee's reach) or allow you to choose between the state and federal exemptions.