Removing a Trustee in California

A trustee occupies a position of profound responsibility and trust. They hold assets on behalf of beneficiaries, manage investments, pay bills, file tax returns, and make decisions that directly affect beneficiaries’ financial security and wellbeing. When a trustee performs these duties faithfully and competently, the trust administration process runs smoothly. But when a trustee breaches their duties, acts in self-interest, or proves incapable of managing the trust responsibly, beneficiaries face a serious problem.

At Cava & Faulkner, Attorneys at Law, we work with families and beneficiaries in Elk Grove and the broader Sacramento region on trust-related matters. One of the most important protections available to beneficiaries is the right to petition the court to remove a trustee. Understanding the grounds for removal, the legal standards, and the court process is critical if you’re concerned about how a trustee is managing assets that belong to you or someone you care about.

The Trustee’s Fiduciary Duty

Before exploring removal grounds, it’s important to understand what trustees owe to beneficiaries. California law imposes strict fiduciary duties on trustees—duties that exceed ordinary standards of care. A trustee must act with honesty, good faith, and loyalty. They must act in the best interests of the beneficiaries, not their own interests. They must keep trust assets separate from personal assets. They must provide accountings to beneficiaries. They must follow the trust document’s instructions.

These duties aren’t suggestions or guidelines; they’re legal obligations. When trustees violate them, they expose themselves to removal and liability for damages.

Breach of Fiduciary Duty

The most common ground for trustee removal is breach of fiduciary duty. This happens when a trustee fails to act with the care, loyalty, and diligence the law requires. Examples include:

Failure to Invest Properly. A trustee who lets trust assets sit in a non-interest-bearing account, missing investment opportunities, may be breaching their duty to preserve and grow trust assets. Trustees aren’t required to be investment geniuses, but they must make reasonable investment decisions consistent with the trust’s purposes.

Mismanagement of Assets. A trustee who loses money through incompetent management, makes reckless investment decisions, or fails to diversify adequately breaches their duty. This is particularly serious when the trustee had no investment experience and didn’t consult professionals.

Failure to Pay Bills or Distribute Income. If a trust generates income, the trustee must distribute it as the trust document requires. A trustee who fails to pay bills, fails to distribute income beneficiaries are entitled to receive, or hoards cash breaches fiduciary duty.

Poor Maintenance of Trust Property. If a trust holds real estate, the trustee must maintain it. A trustee who lets a property deteriorate, fails to make necessary repairs, or allows it to be damaged through neglect breaches duty.

Administrative Neglect. A trustee must file required tax returns, maintain accurate records, and manage administrative tasks. A trustee who neglects these responsibilities, even if no money is lost, demonstrates breach of duty.

Self-Dealing

Self-dealing is one of the most serious trustee violations. It occurs when a trustee uses their position to benefit themselves at the expense of the trust or beneficiaries. Examples include:

Selling Property to Themselves. A trustee who sells trust property to themselves at a favorable price (favorable to the trustee, not the trust) is self-dealing. Even if the trustee believes they’re offering fair value, using their position as trustee to advantage themselves is prohibited.

Purchasing Property from the Trust. Similarly, a trustee who buys property from the trust at a discount is self-dealing.

Loaning Trust Money to Themselves. A trustee who borrows trust money, even with the intent to repay it, is self-dealing. The trustee has a conflict of interest and shouldn’t be the decision-maker about their own loan.

Using Trust Money for Personal Expenses. The clearest form of self-dealing is a trustee simply taking trust money for personal use—paying their credit card bills with trust funds, taking a “loan” from the trust that’s never repaid, or using trust assets to pay personal expenses.

Hiring Themselves or Family. A trustee who hires themselves as a trust administrator and pays themselves generous fees without proper authorization, or who hires family members at inflated rates, is self-dealing.

Preferred Beneficiary Status. If a trust has multiple beneficiaries and a trustee is also a beneficiary, conflicts arise. A trustee who gives themselves preferential treatment—distributing more to themselves than to other beneficiaries, or making investments that benefit their interests over others’—is engaging in self-dealing.

California law is strict about self-dealing. Even if a trustee can show that their actions were fair or caused no actual loss to the trust, the self-dealing itself can be grounds for removal. The law presumes that self-dealing harms the trust unless the trustee can prove otherwise, placing a heavy burden on self-dealing trustees.

Failure to Provide Accountings

Beneficiaries have a right to know how the trust is being managed. California requires trustees to provide accountings—detailed statements showing what the trust owned at the beginning of the period, what was received, what was paid out, and what remains. Trustees must provide these accountings upon request and at specified intervals.

A trustee who refuses to provide accountings, provides incomplete or inaccurate accountings, or delays accountings beyond reasonable timeframes violates their duty and can be removed. Failure to account is serious because it prevents beneficiaries from discovering other violations.

Incapacity or Incompetence

Sometimes a trustee becomes incapable of managing the trust’s responsibilities. This might be due to mental illness, cognitive decline, serious illness, addiction, or simply being overwhelmed by the trust’s complexity. If a trustee lacks the capacity to understand the trust’s assets, make sound decisions, or manage administrative responsibilities, they can be removed.

Incapacity is sometimes harder to prove than intentional misconduct, but it’s a legitimate removal ground. A beneficiary might need to obtain medical evidence, document instances of poor decision-making, or show that the trustee repeatedly makes errors or can’t explain trust matters.

Hostile Beneficiary Relationship

Sometimes a trustee and beneficiary relationship becomes so hostile that the trust administration breaks down. Constant conflict, inability to communicate, threats of litigation, or fundamentally broken trust between trustee and beneficiary can constitute grounds for removal. Courts recognize that effective trust administration requires some level of working relationship.

However, mere disagreement about investments or distributions usually isn’t enough. The hostility must be so severe that it prevents the trustee from carrying out their duties fairly. A trustee can’t just resign because a beneficiary is difficult; the beneficiary must show that the relationship is genuinely dysfunctional.

The Petition for Removal Process

Removing a trustee in California requires filing a petition with the probate court in the county where the trust is administered (typically where the trustee resides or where trust property is located). The petition must clearly state the grounds for removal and support those grounds with evidence.

Standing to Petition. Not everyone can petition to remove a trustee. Generally, beneficiaries of the trust, co-trustees, or the settlor (if alive) can petition. Some trusts might designate someone with authority to petition. The court will first determine whether the petitioner has standing before considering the merits.

Notice to Interested Parties. Once a petition is filed, notice must be provided to the trustee, all beneficiaries, and others with interests in the trust. The trustee will have opportunity to respond, and other interested parties can participate in the proceeding.

Evidence and Hearing. The court will review evidence—documents, testimony, expert opinions if needed. The trustee will have opportunity to defend their actions. If the parties agree, the trustee might resign rather than proceeding to trial, but contested removals go to hearing.

Court’s Decision. The court must determine whether removal is appropriate. The standard is whether removal is in the best interests of the beneficiaries and the trust. If the court finds grounds for removal and believes it serves the beneficiaries’ interests, the trustee will be removed and a successor trustee appointed.

Relevant California Law

California Probate Code Section 15642 addresses trustee removal. It allows removal when the trustee has committed a breach of trust, when the trustee is no longer able or willing to serve, or when removal would be in the best interests of the beneficiaries. Courts also consider whether the trustee has engaged in self-dealing, failed to provide required accountings, or failed to comply with the trust document.

Probate Code Section 16005 requires trustees to provide information and accountings to beneficiaries, and violations of these duties support removal.

Removal Is a Serious Matter

Removal proceedings are not casual matters. A trustee who is removed may face liability for damages caused by their breach, may owe attorney’s fees to the beneficiaries who forced removal, and will be removed from a position of trust and authority. At the same time, beneficiaries need protection, and the removal process provides that protection.

If you believe a trustee is breaching their duties, mismanaging assets, or engaging in self-dealing, you have legal recourse. We can evaluate whether removal is appropriate, gather evidence, and pursue the petition process if necessary.

When Removal Might Not Be Necessary

Sometimes beneficiaries can address trustee problems without removal. A trustee might agree to hire a professional investment advisor, might be willing to provide more frequent accountings, or might consent to a co-trustee being appointed to oversee their actions. Some trust documents have provisions for addressing trustee misconduct without removal.

We explore these options before pursuing removal, because removal is disruptive and litigious. However, when removal is the only solution to protect the trust and beneficiaries, we’re prepared to pursue it aggressively.

Let Cava & Faulkner Protect Your Rights as a Beneficiary

Trust disputes are complex, and removal proceedings even more so. You need knowledgeable counsel who understands California probate law and has experience with trustee disputes. At Cava & Faulkner, we help beneficiaries understand their rights and options. Whether you need to address trustee misconduct, want a trust accounting, or are concerned about how assets are being managed, we can evaluate your situation and advise on next steps.

Call us at 916-831-7565 to discuss your trust concerns. We’re here to help protect the assets that matter to you.