Perhaps a close friend or family member asked you many years ago to serve as their estate trustee. While the request seemed reasonable, and you wanted to help out your friend, actual trustee duties and the reality of dealing with beneficiaries can be a real eye-opener. Beneficiaries may include children, stepchildren, spouses, ex-spouses, estranged siblings, and more. These beneficiaries can be challenging to work with, resulting in a beneficiary seeking to remove you as trustee.
Even worse, a beneficiary may be seeking damages against you. Again, this is a situation you could have never anticipated or prepared yourself for. It is, however, a situation that requires experienced legal representation. The Steburg Law Firm can provide California’s most solid, comprehensive trustee defense. At Steburg Law Firm, we understand that you may be overwhelmed and can desperately use reassurance and knowledgeable legal assistance.
If you are a trustee accused of mismanagement, failure to disclose, mishandling, or, even more seriously, embezzlement from the trust, you need expert legal help immediately. After speaking to a highly skilled Steburg Law Firm attorney regarding your trustee defense in California, you will likely feel a burden has been lifted from your shoulders. Our attorneys bring significant experience in both estate law and litigation, ensuring you receive a higher level of support than you might receive from other firms.
What Does a Trustee Do, and Why Might a Trustee Need Trustee Defense in California?
Under California law, a trustee is responsible for holding and managing property to benefit named trust beneficiaries. Fiduciary duties bind Trustees because of the enormous power they are entrusted with. A fiduciary duty involves putting the best interests of another person or persons ahead of your own. While trustees are given a broad expanse of decision-making authority, they must always consider the best interests of the beneficiaries in conjunction with the trust maker’s wishes. Under California Probate Code, common fiduciary duties of a trustee include:
- Carefully execute the terms of the trust
- Exhibit impartiality when dealing with beneficiaries
- Remain loyal to the interests of the beneficiaries
- Keep accurate records at all times
- Always keep personal funds separate from trust assets
- Invest trust assets wisely and productively when applicable
All trust funds must be “earmarked” or labeled to separate them from other funds. In cases where the trustee is also a beneficiary, it can be especially damaging to commingle personal and trust funds, but it should never occur in any situation. While trustees can delegate the duty to invest to professionals, a trustee’s powers cannot be assigned to someone else under any circumstances. Unfortunately, it’s easy for a layperson to misstep when carrying out trustee duties, and beneficiaries have a wide range of potential legal relief when they believe a trustee has breached their fiduciary duty. A beneficiary could potentially challenge a trustee in the following ways:
- Defending the Trust Document—A beneficiary may ask that the trust document be carried out as written if they believe the trustee is not abiding by the trust maker’s wishes. Again, it can be beneficial for a trustee to work with an experienced estate planning attorney to ensure the terms of the trust are being properly executed.
- Demands for Accounting—If a beneficiary believes the trustee is not being open and aboveboard regarding accounting matters, they may ask for full accounting from the trustee. Comprehensive record-keeping is essential—both as a matter of law and in the event of a beneficiary demand for accounting.
- Claims by Creditors—Unexpected claims by creditors can cause problems for trustees. Perhaps creditors have come forward that the trustee did not know existed—and in paying these creditors, the assets the beneficiaries are supposed to receive could be significantly diminished. The trustee may be caught between the creditor claim—and determining whether it is valid—and the beneficiaries’ assertions against the creditor claim.
Beneficiaries are entitled to a copy of the trust document and have the right to be kept reasonably informed about the trust and its administration.
What Are the Most Common Claims Against a Trustee by Beneficiaries?
Although a trust is much more difficult to contest than a living trust, beneficiaries or omitted persons may claim the trust maker was too old, too sick, or vulnerable to undue influence by another. Beneficiaries may also look for legal technicalities to undo the trust, such as the absence of witnesses, a suspicious signature, or handwritten notes on the document. However, the real reason for such a challenge is usually that the beneficiary is not receiving what they want.
The beneficiary may find an attorney to take the case on a contingency basis, betting the trustee will feel threatened by the challenge, offering some settlement to make the issue disappear. Unfortunately, such a decision can impact other beneficiaries and may not be the best—or the legal—course of action. Therefore, having a knowledgeable Steburg Law Firm attorney for your trustee defense in California is crucial to the outcome of such a challenge.
Allegations of wrongdoing or money mismanagement are also fairly common from beneficiaries. A trustee may be accused of misconduct with absolutely no basis in fact. They may be accused of overspending on expenses, selling assets too slowly or at a price that is too low, or even of flat-out misappropriation of trust funds. Trustees have a level of reasonable discretion, so what a beneficiary sees as unlawful may not actually be unlawful or even inappropriate.
Unfortunately, whenever a trustee is accused of theft of trust funds, they must provide a comprehensive accounting to the court that lists all trust assets, expenses, income, and supporting documentation. Since trust accounting can consume hundreds of pages of documentation, it is essential that you have the best trustee defense in California. The Steburg Law Firm is ready to defend your actions and help you present your defense in the best way possible.
In situations where the trustee is also a beneficiary, other beneficiaries may have a personal issue with the trustee, throwing out accusations in the hopes that something sticks and the trustee is removed. The qualifications of the trustee may be called into question, or other beneficiaries may intimidate the trustee to the point where the trustee wants out of the obligation. Our attorneys will evaluate the facts, analyzing the actual motives behind the allegations. Another common claim against a trustee involves the fact that a trustee assumes control over the ownership interest of a decedent’s business, business interests, or real estate owned by the trust until it is transferred to a designated beneficiary.
While the trustee may only be attempting to maintain the structure and profitability of the trust assets, the beneficiaries may want their payout as soon as possible. Any of these scenarios require a knowledgeable trustee defense in California from the strong, skilled attorneys at Steburg Law Firm.
What is the Trustee Removal Process?
Trustee removal involves the legal system. First, a beneficiary must file a petition with the appropriate court requesting that the trustee be removed. A hearing will be held to examine the evidence supporting the removal request, allowing the trustee a response to the issues raised in the petition. The beneficiary or other person making the allegations must show that the trustee has committed a breach of the trust document or one or more of the following:
- Excessive payments for the trustee’s services have been demanded
- There is hostility between the trustee and one or more beneficiaries, or the trustee either has a clear bias against a beneficiary or has shown favoritism.
- The trustee is unfit in some way to act as a trustee
- There has been a clear breach of the trust document
If the court finds sufficient evidence to remove the trustee, it will appoint a successor trustee—sometimes an attorney.
How to Choose the Best Trustee Defense Lawyer
If you’ve been named trustee, you may assume everything will go as planned. You will carry out the wishes of the trust maker in an honest, straightforward manner. Sometimes, however, things do not go according to plan, especially when you add a group of beneficiaries into the mix. You could do everything right yet still face untrue allegations. For this reason, choosing an experienced trustee defense lawyer from the Steburg Law Firm in California can make all the difference.
Your trustee defense lawyer will guide you through the administration process, ensuring you avoid inadvertently making a misstep that could cause you to face accusations from the beneficiaries. If you are already facing allegations, choose the best trustee defense lawyer as quickly as possible. Whether you are facing allegations of fraud, failure to follow the trust terms, failure to account for funds properly, lack of communication, breach of fiduciary duty, mishandling of trust funds, or mismanagement of trust properties, Steburg Law Firm has the skills, knowledge, and experience in California estate issues to get you through the trust administration and defend any allegations.
How the Steburg Law Firm Will Protect Your Role and Reputation as Trustee
As trustee, you must ensure your role and reputation are appropriately protected. Steburg Law Firm’s attorneys will ensure you are protected from start to finish. Our trusted lawyers provide comprehensive estate litigation services in San Jose, CA. We are trusted professionals offering innovative, reliable solutions to complex situations. Contact Steburg Law Firm today.