Can a trustee be held personally liable in California? Under California trust law, trustees can be held personally liable. But this depends on your situation. When a trustee violates their fiduciary duty, this can have consequences on beneficiaries and their family that span generations.
At Gokal Law Group, we have helped beneficiaries like you recover losses and bring negligent or underhanded trustees to justice for decades. Read our blog to learn when a trustee can be held personally liable and how an attorney can help.
Can A Trustee Be Held Personally Liable?
Under California trust law, trustees can be held personally liable for losses incurred due to a breach of trustee duties. Trustees have a legal obligation to act in the best interest of beneficiaries and the trust. This obligation is also known as their fiduciary duty.
If a trustee fails to fulfill these duties and mishandled the trust, beneficiaries can pursue California trust litigation and potentially hold the trustee personally liable. Some situations in which you can hold a trustee personally liable include:
- Failing to make necessary distributions according to trust terms
- Failing to pay debts owed by the trust
- Failing to keep beneficiaries informed
- Failing to provide an accounting or providing an inaccurate accounting
- Mismanaging trust property and assets
- Failing to ensure trust property is titled correctly
- Failing to make prudent investments
- Paying taxes late and incurring fees or penalties
- Failing to maintain impartiality among beneficiaries
- Failing to hire qualified outside professionals for help
- Committing self-dealing
- Failing to avoid conflicts of interest
The legal repercussions a trustee can face depend on the circumstances. Working with a premier beneficiary rights lawyer will ensure you understand the gravity of the situation to bring the trustee to justice and recover losses.
What Penalties Can a Trustee Face Under California Trust Law?
The penalties for a trustee’s breach of fiduciary duty in California can vary and, ultimately, depend on the severity of their violation. The fiduciary duty in California represents the highest legal duty possible, and the consequences for violations can be proportionate.
For example, in more severe cases, if the court convicts a trustee of a criminal offense, the trustee can even face jail time. Under California trust law, embezzling assets valued at $950 or less is a misdemeanor that can carry a 6-month county jail sentence.
However, if the trustee steals more than $950, you can pursue a felony embezzlement conviction through California trust litigation, which can result in the trustee spending up to 3 years in jail or even federal criminal charges.
More often, however, trustees will be removed and ordered to reimburse damages caused by their actions and reimburse beneficiary court costs and attorney fees. But this is only if beneficiaries win in court, which is why working with a trust dispute lawyer is so essential.
“There are three fundamental elements when determining if a trustee can be held personally liable. They must be found guilty of self-dealing or using assets for their benefit, they must cause damage to a third party, and they must become subject to criminal charges for blatant disregard of the law and their duties. If these elements are in play, working with a trust lawyer in Orange County is essential to ensure you can navigate the complex litigation process to recover losses and bring the trustee to justice.” – Nicholas D. Porrazzo, Partner and Orange County trust lawyer, Gokal Law Group
Premier Trust Litigation Lawyers in Orange County
Per California trust law, if a trustee has committed a breach of their fiduciary duty, the court can deem them personally liable for damages. The extent of liability, ultimately, depends on the severity of their offense and your situation. Regardless, pursuing California trust litigation is essential to preserve and protect the integrity of the trust and your inheritance.