If a trustee has violated their fiduciary duties or poses a threat to the trust in some other way, it may be possible to suspend or remove them without their consent, but their alleged violations will need to be laid out in a trustee removal petition, which you file with the court.
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.
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.
Breach of Fiduciary Duty
When trustees fail to follow the trust, they breach their fiduciary duty. This breach can have serious legal consequences.
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.
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.
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.
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.
However, trustees have a minimum duty to perform the trusts honestly and in good faith for the benefit of the beneficiaries. An exemption clause cannot excuse a trustee who either knows that their act or omission is contrary to the beneficiaries' interests or is recklessly indifferent to the beneficiaries' interests.
Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. Trustee malfeasance is a broad term encompassing many different types of offenses, both intentional and unintentional.
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.
A rogue trustee is someone who manages a trust but stops following the rules set out in the trust documents. Legally, this can constitute a breach of fiduciary duties. If this happens, the people who are supposed to benefit from the trust, known as beneficiaries, can be harmed.
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.
A A Trustee is disqualified 'as Trustee' upon his death, loss of his legal competence, removal from trusteeship, liquidation, rescinding his licence or declaring his bankruptcy. The Trust shall then be transferred to the other Trustees in case of multiple Trustees, unless the Trust Instrument provides otherwise.
Generally, no you cannot sue a trust directly. Again, that's because a trust is a legal entity, not a person. It's possible, however, to sue the trustee of a trust whether that trust is revocable or irrevocable. As mentioned, in the case of a creditor lawsuit the trustee of a revocable living trust could be sued.
Generally, it is substantially easier to successfully contest a will than to contest a trust, and there are several reasons for this. One reason wills are easier to challenge is that testamentary laws govern wills, while contract laws govern trusts. The structure of these documents is also crucial to consider.
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.
A trustee is tasked with serving as your financial guardian for a trust and protecting an inheritance with unwavering loyalty. However, trustee misconduct occur when they fail to properly manage the trust or actively jeopardize your financial future for their own gain.
If the trustee is not paying beneficiaries accurately or on time, legal action can be taken against them.
Common Breaches of Trustee Duties in California. Too often, trustees breach their duties. Some of the most common ways they do this include breaches of trust, funds misappropriation, poor management, fraudulent acts, failure to act, and engagement with a competitor.
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.
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.