Trustee & Executor Breach of Fiduciary Duty
Trial-ready counsel for beneficiaries holding fiduciaries accountable — and for trustees and executors defending administration decisions.
Trustees, executors, and other estate fiduciaries hold enormous power over family assets — often after the death of a parent or grandparent, when emotional dynamics are already high and beneficiaries may be scattered across geography. When those fiduciaries fail to meet their legal obligations, California law provides real remedies. And when trustees and executors face unfounded accusations, they deserve real defense. Phillips Law Offices represents both sides with 25+ years of trial experience.
The problem
When the person managing the estate stops managing it for the beneficiaries.
Most trustees and executors do their jobs well. They administer the trust or estate according to its terms, keep beneficiaries informed, provide required accountings, invest prudently, and distribute assets as the trust or will directs. When those fiduciaries perform their duties responsibly, estate administration proceeds without dispute.
But sometimes things go wrong. A trustee starts using trust assets for personal benefit. An executor delays distributions while charging excessive fees. A successor trustee refuses to provide accountings that Probate Code requires. A trustee makes investments that serve their own interests rather than the trust's. A family member serving as trustee favors themselves and their branch of the family over other beneficiaries.
When those breakdowns happen, beneficiaries have real remedies — surcharge against the fiduciary personally, removal from office, damages for lost trust value, and in some cases attorney's fees. But pursuing these remedies requires substantial investigation, careful accounting analysis, and willingness to see the case through discovery and trial when necessary. And when the accusations are unfounded, defending them requires the same trial-ready approach.
Trust and estate fiduciary cases turn on documentary evidence: the trust or will itself, financial records, accountings, communications, and the fiduciary's decisions across the entire period of administration. Both sides need experienced counsel who can develop and present that evidence effectively.
The duties
What fiduciary duties do trustees and executors owe?
California Probate Code imposes specific fiduciary duties on trustees and executors — duties that are more stringent than those imposed on business fiduciaries. Understanding what each duty requires is the foundation of any trustee or executor fiduciary breach case.
The duty of loyalty
The core fiduciary duty. Requires the fiduciary to administer the trust or estate solely in the interest of the beneficiaries, without personal benefit or conflict of interest. Prohibits self-dealing (transactions between the fiduciary and the trust or estate), taking personal advantage of the fiduciary position, and preferring one beneficiary over another when the governing document requires impartiality. Codified in Probate Code §16002 (trusts) and applied similarly to executors.
The duty of impartiality
When a trust or estate has multiple beneficiaries with different interests — current income beneficiaries versus remainder beneficiaries, for example — the fiduciary must administer the trust or estate impartially, without favoring one beneficiary or class over another. Probate Code §16003 requires trustees to give due regard to the beneficiaries' respective interests. This duty often becomes contentious in blended family situations or when investment decisions affect current versus future beneficiaries differently.
The duty of prudent administration
Requires the fiduciary to administer the trust or estate with reasonable care, skill, and caution, as a prudent person would. For investment decisions, this includes compliance with the Prudent Investor Act (Probate Code §§16045-16054) — appropriate diversification, consideration of risk and return, and reasonable investment strategy. For general administration, it includes prompt action, appropriate delegation, and reasonable business judgment. Trustees are not required to guarantee results, but they must exercise reasonable prudence in their decisions.
The duty to inform and account
Trustees must keep beneficiaries reasonably informed of the trust and its administration. Probate Code §16060 requires trustees to keep beneficiaries reasonably informed on request. Probate Code §16062 requires trustees to provide accountings at least annually and at termination of the trust (subject to some exceptions). Beneficiaries who request accountings are entitled to receive them. Failure to provide required accountings is itself a breach that can support removal and damages.
The duty to control and preserve trust property
Trustees must take reasonable steps to take control of trust property and preserve it (Probate Code §16006). This includes securing physical assets, maintaining insurance, protecting against loss, and preventing waste. Failure to protect trust assets from loss or damage is itself a breach of duty even if the loss wasn't caused by the trustee's affirmative misconduct.
The duty of confidentiality
Trustees must keep confidential information about the trust and beneficiaries reasonably private. This is a less commonly litigated duty but arises in cases where trustees improperly disclose beneficiary or trust information to third parties.
Duties specific to executors
Executors owe substantially similar fiduciary duties, adapted to the estate administration context. Executors must marshal estate assets, pay creditors, file required tax returns, provide accountings to the probate court, and distribute assets according to the will or intestate succession. Delays in administration, excessive fees, and self-interested decisions can all constitute breach of executor duties.
The signs
Warning signs of trustee or executor breach of fiduciary duty.
Trustee and executor breaches often develop over time, with beneficiaries slowly recognizing that something is wrong. Recognizing patterns early — whether you're a beneficiary suspicious of a fiduciary's conduct, or a fiduciary concerned about allegations being built against you — makes a significant difference in how the situation unfolds.
Signs from the beneficiary's perspective
- Delayed or missing accountings: Required annual accountings never arrive, or accountings that do arrive lack detail, contain unexplained transactions, or don't reconcile with what beneficiaries know about the trust or estate
- Restricted information access: Requests for trust documents, financial statements, tax returns, or other information go unanswered or are refused
- Unusual transactions: The trust is doing business with entities owned by the trustee, real property is being transferred at below-market prices, or investment decisions seem to serve the trustee's interests rather than the trust's
- Excessive fees: Trustee compensation appears unusually high given the trust's size and complexity, or professional fees (attorneys, accountants) seem excessive or duplicative
- Delayed distributions: Distributions that should have been made under the trust terms are being delayed without explanation, or the trustee is holding assets longer than necessary for administration
- Favoritism: The trustee or executor appears to favor one beneficiary or family branch over others, making distributions or decisions that don't align with the governing document's requirements
- Investment losses beyond normal market performance: Trust assets have lost value in ways that suggest imprudent investment strategy or excessive risk-taking, particularly compared to appropriate benchmarks
Signs from the fiduciary's perspective
- Formal demand letters: Correspondence from a beneficiary's attorney demanding accountings, information, or explanations of specific decisions
- Beneficiary information requests: Written demands from beneficiaries for records that seem designed to build a legal record
- Objections to accountings: Formal objections filed to trustee accountings, particularly objections that challenge specific transactions or fee arrangements
- Petitions for court intervention: Petitions for instructions, petitions to compel accountings, or other court filings seeking judicial supervision of the trust administration
- Removal petitions: Formal petitions for trustee removal under Probate Code §15642, alleging breach of duty or other grounds
- Filed lawsuits: Complaints alleging breach of fiduciary duty, surcharge claims, or requests for accounting
If you're seeing these signs — whether as a beneficiary concerned about fiduciary conduct or as a fiduciary facing challenges — don't wait to consult with counsel. Trust and estate fiduciary cases turn heavily on documentary evidence developed early and on strategic decisions made in the first weeks of the dispute.
What we do in trustee and executor fiduciary duty cases
Trust and estate fiduciary cases involve substantial factual investigation, careful document analysis, and often complex financial and accounting review. The specific work depends on which side you're on.
Representing beneficiaries pursuing fiduciary breach claims
Beneficiary-side priorities include: obtaining the trust or will documents, prior accountings, and financial records that establish the fiduciary's conduct, forensic accounting analysis to identify improper transactions, developing evidence of specific breaches (self-dealing, imprudent investment, excessive fees, failure to account), quantifying damages caused by the breach (lost trust value, improperly diverted assets, excessive fee recovery), and pursuing appropriate remedies including surcharge, removal, and attorney's fees where available.
Representing trustees and executors defending against claims
Fiduciary-side priorities include: establishing the reasonableness of the challenged decisions (many trustee decisions that look questionable in hindsight were actually reasonable at the time), demonstrating compliance with duties (proper accountings, informed decision-making, appropriate delegation to professionals), invoking the business judgment principles that protect prudent fiduciaries, coordinating defense costs from trust assets under Probate Code §15684, and where appropriate, positioning for negotiated resolution that minimizes disruption to the trust or estate.
Typical case work in trustee and executor fiduciary matters includes:
- Trust and will document analysis: Careful review of the governing documents to identify the fiduciary's specific duties, powers, and any modifications from default rules
- Accounting review and forensic analysis: Detailed analysis of trust or estate accountings, financial records, and transactions — often requiring forensic accountants to identify irregularities
- Prudent Investor Act analysis: When investment decisions are challenged, analysis of whether the fiduciary complied with the Prudent Investor Act's requirements for portfolio management
- Communication history review: Emails, letters, and other communications between the fiduciary and beneficiaries, showing what was disclosed, when, and what representations were made
- Third-party discovery: Records from banks, brokerages, accountants, attorneys, and other professionals involved in trust or estate administration
- Depositions: Depositions of the fiduciary, beneficiaries, professional advisors, and third parties with relevant knowledge
- Petition practice: Petitions for accountings, petitions to compel information, petitions for instructions, petitions for removal, and other Probate Code proceedings that shape the case
- Trial preparation: Preparing for contested probate court trials, which typically proceed as bench trials before the Superior Court's probate department
Legal framework: Probate Code §16002 (duty of loyalty); §16003 (duty of impartiality); §16006 (duty to control and preserve trust property); §16045-16054 (Prudent Investor Act); §16060 (duty to inform); §16062 (duty to account); §15642 (removal of trustee); §15684 (attorney's fees from trust assets); §17200 (petitions concerning trust administration); §17211 (attorney's fees in trust disputes involving bad faith); §16420 (remedies for breach of trust); Civil Code §3294 (punitive damages standard).
Remedies available in trustee and executor fiduciary duty cases
California Probate Code provides multiple remedies for breach of trustee or executor fiduciary duty — the appropriate remedy depends on the nature of the breach, the harm caused, and what best serves the trust or estate and its beneficiaries.
Surcharge of the fiduciary
The core financial remedy. When a trustee or executor breaches fiduciary duties, they can be personally liable to the trust or estate for the resulting loss — "surcharged" for the harm they caused. Probate Code §16420 sets out the remedies for breach of trust, including compelling the trustee to perform duties, enjoining commission of a breach, compelling redress of a breach, appointing a receiver, and making the trustee liable for damages. Surcharge amounts can be substantial when fiduciary misconduct caused significant loss to trust assets.
Removal from office
Under Probate Code §15642, courts can remove trustees for breach of trust, unfitness, hostility with beneficiaries, or other grounds. Similar removal remedies apply to executors under estate administration provisions. Removal is a significant remedy that transfers administration responsibility to a successor trustee or executor. It's often the most important practical outcome in contested trust cases where the fiduciary has demonstrably failed in their duties.
Compelled accounting
When a trustee has failed to provide required accountings, or when accountings that were provided are inadequate, beneficiaries can petition to compel proper accounting. The court can order the trustee to file a formal accounting subject to court review, with objections and evidentiary hearings on contested items. Compelled accounting is often the first step in cases where beneficiaries suspect wrongdoing but need documented information to develop specific claims.
Disgorgement of trustee fees and improper distributions
Fiduciaries who breach their duties can be required to return trustee fees earned during the period of breach and to disgorge improper distributions made to themselves or others. This remedy prevents the fiduciary from profiting from their misconduct even when the underlying breach didn't directly cause quantifiable trust losses.
Attorney's fees under Probate Code §17211
When a trustee opposes an accounting or contested matter without reasonable cause and in bad faith, the court can award attorney's fees against the trustee personally. This important fee-shifting provision helps make beneficiary claims economically viable in cases where the trustee's opposition is unreasonable. Fee awards under §17211 are separate from any recovery for the underlying breach.
Punitive damages in appropriate cases
Under Civil Code §3294, when the plaintiff proves fiduciary misconduct was committed with malice, oppression, or fraud, punitive damages may be available. Trustee and executor cases involving deliberate self-enrichment, concealment of misconduct, or fraud against beneficiaries can support punitive damages claims that substantially increase the economic exposure of defendants.
Injunctive and equitable relief
Courts can order fiduciaries to take specific actions or refrain from specific conduct through preliminary and permanent injunctions. This can include preventing further dissipation of trust assets, requiring specific distributions, or ordering restoration of improperly transferred property to the trust or estate.
How I handle fees in trustee and executor fiduciary cases
Trustee and executor fiduciary cases have unusual fee structures because the case dynamics differ between plaintiff-side and defense-side representation, and because Probate Code provides several important fee-shifting mechanisms.
- Contingency for beneficiary-side claims with clear damages: When beneficiary-side cases involve clear damages (identifiable trust losses, quantifiable improper distributions, specific fee excesses), contingency representation may be appropriate. Standard probate contingency percentages apply — typically 33⅓% pre-suit, 40% post-filing, negotiated case-by-case.
- Hourly for beneficiary-side cases without clear damages: Some beneficiary cases involve important accountability but limited direct recovery — cases where the primary goal is removal of the fiduciary, compelling proper accounting, or preventing future misconduct. These cases are typically handled hourly.
- Hourly for defense-side trustee and executor representation: Trustees and executors defending against fiduciary breach claims are represented on an hourly basis. Under Probate Code §15684, defense costs are typically paid from trust assets when the trustee's defense is undertaken in good faith. Executors similarly can typically use estate assets for defense subject to court approval.
- Attorney's fees under Probate Code §17211: When a trustee opposes accountings or contested matters without reasonable cause and in bad faith, the court can award attorney's fees against the trustee personally. This fee-shifting mechanism can substantially change the economics of beneficiary cases where trustee conduct has been egregious.
- Hybrid arrangements: Some cases benefit from combined fee structures — such as hourly for the removal aspect combined with contingency on any recovery from surcharge or disgorgement. We work out arrangements that fit the specific case.
- Free initial consultation: Every trustee or executor fiduciary matter starts with a free, confidential conversation. We review the situation, discuss the legal framework, assess the strength of claims or defenses, and give you an honest assessment of what representation would look like — including realistic fee expectations.
An honest note: Trust and estate fiduciary cases can be economically substantial or economically marginal depending on the trust size, the extent of the breach, and the specific remedies sought. Part of my job is telling you honestly whether pursuing (or defending) a case makes economic sense. Some cases warrant full-scale litigation; others are better resolved through negotiated resolution or successor trustee arrangements.
Why local matters
Nevada County trust and estate cases benefit from local counsel.
Trustee and executor fiduciary cases in Nevada County are filed in Nevada County Superior Court's probate department. Sacramento and Bay Area firms driving up to handle these cases pay for their unfamiliarity with local court practices in delays, procedural inefficiencies, and higher billing.
What local counsel provides
- Actual Nevada County presence. My office is at 305 Railroad Avenue in Nevada City. I've practiced in Nevada County for over twenty-five years. When your case needs a courthouse filing, a hearing appearance, or a same-day motion response, I'm here.
- Nevada County Superior Court knowledge. Twenty-five years of civil practice in this county means familiarity with the probate department's calendar practices, local rules, and how contested matters actually proceed through the system.
- Meaningful rate advantage. Sacramento firms bill $500-$750 per hour for probate litigation. Bay Area firms bill more. My rates are meaningfully lower — and in fiduciary cases with substantial accounting review, discovery, and expert witness work, that rate differential adds up substantially over the life of a case.
- Trial capability. Twenty-five years of practice and over one hundred jury trials means I actually try cases when contested hearings and trials are what the case requires. Most trust and estate cases resolve through negotiated settlement or contested accountings — but they resolve on better terms when the other side knows the case can proceed through trial.
- Direct access. This is a solo practice. When you call, you reach me — not a screener, not a junior associate, not a case manager. Every client works directly with the lawyer handling their case.
Trial capability matters even in probate
Most probate matters resolve without full trial — settlement conferences, mediated resolutions, and negotiated accountings dispose of the majority of contested cases. But the credibility of your position depends on whether the other side believes you can actually proceed through contested hearings and trial. Attorneys who don't try cases don't move the needle. Sacramento firms billing $700 an hour drive up your costs whether or not the case needs that investment.
Phillips Law Offices offers something Nevada County families rarely have access to locally: a trial-ready attorney at reasonable rates, with the courtroom experience to actually see the case through to contested resolution if that's what it takes.
Common questions
Trustee and executor fiduciary questions from Nevada County families.
Straight answers to the questions Nevada County families ask most often about trustee and executor conduct, breach claims, and defenses.
What can I do if the trustee won't give me an accounting?
You have legal remedies. Under Probate Code §16060, trustees must keep beneficiaries reasonably informed on request. Under Probate Code §16062, trustees must provide accountings annually and at termination (with some exceptions). If the trustee refuses, you can file a petition to compel an accounting under Probate Code §17200. Failure to account is itself grounds for removal under Probate Code §15642. Courts take account failures seriously — a trustee who refuses to account is often the same trustee doing something they don't want beneficiaries to see.
Can I get the trustee removed?
Yes, in appropriate cases. Under Probate Code §15642, courts can remove a trustee for: breach of trust, unfitness or inability to administer, hostility or lack of cooperation with co-trustees that impairs administration, insolvency or inability to protect trust assets, or other good cause. Removal petitions require detailed factual showings and typically involve contested hearings. When granted, removal transfers administration responsibility to a successor trustee — often specified in the trust document, or if not, appointed by the court. Removal is one of the most important practical remedies in contested trust cases.
How do I know if the trustee's investment decisions were prudent?
California follows the Prudent Investor Act (Probate Code §§16045-16054). Trustees must exercise reasonable care, skill, and caution in investment decisions, considering the trust's purposes, terms, distribution requirements, and other circumstances. Diversification is generally required. Investment strategy must be evaluated in the context of the entire portfolio, not individual investments in isolation. Prudent investor analysis often requires expert testimony from investment professionals or forensic accountants — comparing the trustee's decisions to what a reasonable trustee would have done under similar circumstances.
What if the trustee is a family member who isn't taking their duties seriously?
Family member trustees are common — many trusts name adult children, siblings, or other relatives as trustees. Family relationships don't reduce the fiduciary duties owed. A trustee who happens to be your sibling still owes the same duties: prudent investment, proper accounting, impartial administration, and personal accountability for breaches. If the family member trustee is failing in these duties, the same remedies apply as with any other trustee. Family dynamics can make the litigation emotionally difficult, but the legal framework is the same.
Can trustees be personally liable for their mistakes?
Yes. Trustees who breach their fiduciary duties can be personally liable to the trust for the resulting harm — "surcharged" under Probate Code §16420. Personal liability applies even when the trustee wasn't attempting to profit personally; failure to exercise reasonable care can still result in surcharge. However, trustees are not guarantors of results. Reasonable investment decisions that turn out badly, honest mistakes made with reasonable prudence, and decisions authorized by the trust document typically don't result in personal liability. The line between reasonable and unreasonable conduct is often the central issue in fiduciary breach cases.
What's the statute of limitations for trustee breach claims?
It's complex and depends on the specific facts. The general rule under Probate Code §16460 is that beneficiaries have three years from receipt of a proper accounting to bring claims about matters disclosed in the accounting. Claims about matters not disclosed have a different limitations period. For breaches discovered later, the delayed discovery rule can extend the limitations period. Also, trustee failure to provide accountings can toll (delay) the running of limitations periods. If you're contemplating a claim about past trust administration, get counsel involved before deadlines become an issue.
Can trust assets pay for the trustee's defense?
Generally, yes — with important limits. Under Probate Code §15684, a trustee is entitled to reimbursement from trust assets for reasonable costs of defense, including attorney's fees, when the defense is undertaken in good faith. However, if the trustee is found to have breached duties, the court can require the trustee to repay the trust for defense costs used. This creates important economic dynamics: the trustee can defend at trust expense initially, but faces personal liability for those defense costs if they lose. Beneficiaries pursuing breach claims often factor this into strategic decisions.
My co-trustee is doing everything without consulting me. Is that a breach?
Potentially, yes. Co-trustees generally must act jointly unless the trust document specifies otherwise. Under Probate Code §15620, trustees have a duty to participate in trust administration. A co-trustee who is being systematically excluded from decisions has grounds to petition for court intervention — either to compel their co-trustee to include them in decisions, or in extreme cases, to seek removal of the co-trustee acting unilaterally. Silent acquiescence to a co-trustee's unilateral decisions can also create liability for the passive co-trustee, so raising the issue promptly matters both ways.
What if the executor is dragging out the probate process?
Executors have a duty of prompt administration — probate is supposed to conclude in a reasonable time (typically one to two years for most estates, though complex estates take longer). If an executor is unreasonably delaying, beneficiaries can petition the court for supervision, for interim distributions, for accountings, or in extreme cases for removal. The court can also reduce or deny executor fees for unreasonable delay. Delays that benefit the executor (extended fee earning periods) rather than the estate often support strong beneficiary claims.
Can I negotiate a resolution without going to court?
Often, yes. Many trustee and executor disputes resolve through negotiated settlements — sometimes involving a change of trustee or executor, sometimes involving specific distributions or accounting adjustments, sometimes involving restoration of specific trust assets. Mediation is common and often effective in family trust disputes where continued relationships matter. However, negotiation only works when both sides are prepared to engage seriously — sometimes filing a petition or lawsuit is what creates the leverage that makes negotiation productive. Part of case analysis involves identifying whether negotiation is realistic or whether court intervention is necessary.
Whether you're a beneficiary or a fiduciary, we should talk.
Trust and estate fiduciary cases turn on evidence developed early — accountings, financial records, communications, and the trust or will documents themselves. Preservation matters. Strategic decisions matter. The first step is a free, confidential conversation with me directly. No case managers. No pressure. Just an honest assessment of your situation.
Call Michael: (530) 265-0186Prefer email? mp@phillipspersonalinjury.com
305 Railroad Avenue, Suite 5, Nevada City, CA 95959