A beneficiary does have the ability to sue a trustee if they are mishandling the trust. If a trustee is not abiding by the will of the trust, they are mishandling trust assets, or they are not fulfilling their fiduciary duty, legal action could be a viable option.
Beneficiaries Can Also Be Abusers
Beneficiaries, while they do not hold as much power over the assets in a trust as the trustee, are also capable of committing financial elder abuse.
Trustees found guilty of self-dealing or conflicts of interest can be held personally liable for resulting damages and may face removal from their position.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
While trustees may temporarily be able to delay trust distributions if a valid reason exists for them doing so, they are rarely entitled to hold trust assets indefinitely or refuse beneficiaries the gifts they were left through the trust.
Generally speaking, once a trust becomes irrevocable, the trustee is entirely in control of the trust assets and the donor has no further rights to the assets and may not be a beneficiary or serve as a trustee.
Under California Probate Code §15409, a court may modify or resolve unclear terms in a trust. However, even in these cases, the primary focus is usually on the trustee's conduct. Legal actions against trustees may include: Filing a Lawsuit: Initiating legal action for breach of fiduciary duty or mismanagement.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
Trustees must follow the terms of the trust and are accountable to the beneficiaries for their actions. They may be held personally liable if they: Are found to be self-dealing, or using trust assets for their own benefit.
Fiduciary Duty to Beneficiaries
The trustee must always put the beneficiaries' interests ahead of their own and avoid conflicts of interest. If a trustee withdraws money for personal reasons or uses trust assets inappropriately, they can be held personally liable for any losses to the trust.
Depending on the complexity of the case, it may cost anywhere from a few thousand dollars to $100,000 or more to dispute the terms of a trust.
In general, the steps to this process are: The trustee must send a written notice to the beneficiary to vacate the real property. Under California law, if the beneficiary has been in possession of the property for less than a year, then a 30-day notice is sufficient.
An estate beneficiary has a right to sue the executor or administrator if they are not competently doing their job or are engaged in fiduciary misconduct.
Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.
The answer to this question is generally no, although there are certain rare exceptions that could allow the trustee to remove or change a trust beneficiary, or withhold their distribution.
Executors are bound to the terms of the will, which means they are not permitted to change beneficiaries. The beneficiaries who were named by the decedent will remain beneficiaries so long as the portions of the will in which they appear are not invalidated through a successful will contest.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
The answer to who holds more power depends largely on the context and specific circumstances of the estate or trust. Here's a summary to help clarify: Duration of Authority: Trustees often have ongoing responsibilities and powers that can extend indefinitely, while executors have a more limited, temporary role.
Examples of executor misconduct and trustee misconduct include: Failing to provide accountings to beneficiaries. Favoring one beneficiary over another. Misappropriating or misusing estate or trust assets for personal gain. Commingling personal assets with those of the estate or trust.
Under the Probate Code, “The trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration.” Probate Code Section 16060.
The best chance you have to stop a trustee, to prevent that trustee from running away with the rest of the money, or losing the rest of the money is to get a court involved as soon as possible so that a court can put a freeze to those accounts, put a freeze to the trustee's actions, potentially remove the trustee out ...
Beneficiaries of trust generally fall into two categories. One type of beneficiary is ultimately entitled to take ownership and control of trust capital and the income it generates as outlined in the trust agreement.
Being a trustee is also a role that can be quite time consuming, more so than most people assume. Depending on the nature of the estate, being a trustee can require quite a few hours, which can be hard to come by if the trustee also has a full-time job, a family, and/or other obligations.
A common misunderstanding is that the trust owns the property within it. This is not really true. The trustee of the trust holds legal title to the trust property. The trust beneficiaries hold beneficial title to the trust property.