June 30th, 2023 in
Few individuals fully understand what’s involved in being named as a trustee for another’s estate. Taking on the role of trustee is a solemn obligation and can also bring significant personal liability. Beneficiaries have rights, while trustees have obligations. A trustee’s obligation is known as fiduciary duty, the highest standard of care you can legally owe to another person or persons. In addition to a wide array of responsibilities, a trustee takes on a certain amount of risk if a beneficiary alleges violations on the trustee’s part.
If you have been named as trustee and either need assistance carrying out that role or are facing allegations of wrongdoing, Steburg Law Firm can help. We are experienced trust administration and estate planning attorneys and strong litigators. This means you are completely covered if you need guidance, have questions about the trustee process, or need a trustee defense in California.
Can a Trustee Prevent Their Own Removal?
If the court is convinced by a beneficiary that the trustee has taken actions that are counter to the best interests of the beneficiaries and the actual trust contains no provision for voting to remove a trustee, then legal action may be necessary. Beneficiaries may bring an action for your removal as trustee for any of the following reasons:
- Clear failure to comply with trust terms
- Non-cooperation with a vital party
- Showing favoritism toward one beneficiary over another
- Misappropriation of funds
- Breach of fiduciary duty
- Excessive trustee fees and expenses
- Showing clear hostility toward beneficiaries
- Neglecting or the mismanagement of trust assets
- The failure to act on the part of the trustee
- Self-dealing, or putting one’s self-interests as trustee over those of the beneficiaries
- Conflict of interest
- Failure to provide accounting information regarding the trust
You are not obligated to go quietly just because a beneficiary makes an allegation. As trustee, you have the right to hire legal representation and, in some cases, may even be able to use trust property to defend yourself against a removal attempt. Judges will only remove a trustee when clear evidence is presented in the form of testimony and/or documentation.
Once a petition for your removal is filed, the court will schedule a hearing, and a judge will consider the arguments for and against your suspension or, ultimately, removal. The facts must support a suspension, leaving the removal issue for further evidence. Even when a trustee removal petition has already been filed against you, your attorney may be able to negotiate some agreement with the beneficiaries in which they drop the petition for removal, and you perhaps give in to a demand (so long as it is legal according to the trust documents). If you are suspended as trustee, a replacement trustee will take over your duties while the case proceeds to possible removal.
How Can I Protect Myself in the Trustee Role?
You must protect yourself in your role as the trustee from start to finish. You can be held personally liable for actions or inactions while carrying out your trustee responsibilities. Any perceived breach of trust assertions for resultant financial loss can be brought against the trustee personally. Depending on the complexity of the trust, you may choose to arrange insurance coverage if you require a trustee defense in California. For example, suppose allegations of self-dealing have been made against you as trustee.
There may be no clear-cut evidence that you have done so, but to ensure you don’t find yourself embroiled in a trustee removal lawsuit, it is imperative that you speak to a knowledgeable trust defense attorney from Steburg Law Firm. To prevent finding yourself in such an untenable situation, you should always follow “safe harbor” rules. In the case of self-dealing allegations, knowing exactly what the trust authorizes you to do is extremely important. A trustee may also seek the trust beneficiaries’ approval for any action or even inaction.
If the beneficiaries have consented to a proposed course of action or lack thereof, you could not later be accused of self-dealing. Of course, you can also seek court approval for any actions you take as trustee. However, the bottom line would be to avoid any transaction you would directly benefit from unless such a transaction is authorized explicitly in the trust document. Transparency and regular updates can often go a long way toward keeping the beneficiaries happy.
Obtaining a Strong Trustee Defense in California from the Attorneys at Steburg Law Firm
The legal team from Steburg Law Firm can help you as the trustee to manage trust assets carefully and decisively. We will help you distribute all trust assets promptly while ensuring you are protected in case of allegations of wrongdoing from beneficiaries. At the Steburg Law Firm, our attorneys have significant experience in vigorously defending trustees from removal actions and helping trustees to prepare airtight trust accounting. Contact Steburg Law Firm today!