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.
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.
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.
What types of fiduciary duties does a trustee have to the beneficiaries? The fundamental duties of a trustee are as follows: (1) the duty of good faith and loyalty; (2) the duty of reasonable skill and diligence; (3) the duty to give personal attention; and (4) the duty to keep and render accounts.
Trust beneficiary rights include: The right to a copy of the trust instrument. The right to be kept reasonably informed about the trust and its administration. The right to trust accounting.
A trustee may withhold money or assets from a beneficiary if they must focus on other responsibilities surrounding the estate. For example, if the estate becomes subject to a tax audit or litigation arises, a trustee may refuse to give beneficiaries their share of the assets until these issues are resolved.
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.
Yes, a trustee can sue a beneficiary for harassment if the beneficiary's actions threaten the trust's integrity or the trustee's ability to perform their duties.
If you have tried to communicate with the trustee alone or through attorneys and have still not received a satisfactory response, the next step may be to file a petition with your local court. Before taking this step, consult with an attorney with experience in trust administration.
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.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
Assets will not be distributed until certain administrative tasks are carried out, including filing of tax returns, drafting of an accounting, and providing notice to all beneficiaries. Some or all of the assets will often not be distributed until expenses of the trust are paid.
A petition for removal of a trustee can be filed by either a co-trustee or a beneficiary. The petition may also seek financial damages from the trustee. Sufficient evidence needs to be submitted to show the court that the trustee violated the terms of the trust agreement or their fiduciary duty.
In order for the beneficiary to hold the trustee accountable, the beneficiary must have information about what the trustee is required to do and what the trustee actually does. Thus, the trustee has a duty to account and to inform.
But generally, the trustee is entitled to use trust funds to pay for things like: Funeral and burial expenses for yourself or a trust beneficiary. Expenses related to properties included in the trust, such as repairs or property insurance. Repaying any debts owed by your estate when you pass away.
You have every right to sue a negligent trustee if their negligence is hurting the trust or your inheritance. If you are in a position where you might have to sue a trustee for negligence, contacting a trust litigation attorney immediately to go over your situation is essential.
Per California trust law, if a trustee has committed a breach of their fiduciary duty, the court can deem them personally liable for damages. The extent of liability, ultimately, depends on the severity of their offense and your situation.
The Timeline for Challenging a California Trust
Once a beneficiary or heir receives this notice, they have only 120 days to contest the trust. If they wait more than 120 days, their challenge will be dismissed without consideration, and they will be forever barred from attempting another contest.
The grantor can set up the trust so the money is distributed directly to the beneficiaries free and clear of limitations. The trustee can transfer real estate to the beneficiary by having a new deed written up or selling the property and giving them the money, writing them a check or giving them cash.
A trustee has a fiduciary duty to act in the best interests of the beneficiaries. This means that every withdrawal or use of trust funds must be made for the benefit of the beneficiaries, not for the personal gain of the trustee.
Beneficiary abuse is not acceptable in California's trust and will cases. Being appointed as a trustee or executor of a will is a big responsibility. However, some trustees and executors in California exploit this position, unsuspecting unassuming beneficiaries.
Can a Trustee Change the Beneficiary? Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable.
Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months. However, in simpler cases, the process can take an average of 4 to 5 months without complications.