Trustee Duties in California: Avoiding Conflicts of Interest

When someone is appointed as a trustee, this signals a strong belief in their integrity. There are several trustee duties in California they must uphold, and probate law and the trust document dictate how they must administer the trust. One important component of their responsibility is avoiding conflicts of interest.

At Gokal Law Group, we have helped beneficiaries combat trustees who use trust assets for their gain and fail to avoid conflicts of interest for decades. Learn more about this breach of fiduciary duty in our blog.

What is a Conflict of Interest?

Trustee duties in California include acting in the best interest of beneficiaries and the trust. A conflict of interest occurs when a trustee’s interests, including relationships or debts with other people or entities, influence their decision-making.

A conflict can occur when trustees engage in transactions that give them an advantage over beneficiaries. Probate law outlines several provisions that prevent a conflict of interest from arising. Probate law states that a trustee:

• Cannot use or deal with trust property for their profit
• Cannot use trust property for a purpose unrelated to the trust
• Cannot take part in transactions that oppose beneficiary interests
• Cannot use the trust for their gain
• Cannot enforce a claim against trust property they purchased after they were appointed the trustee

Imagine a trustee is selling a car from the trust that a beneficiary is interested in buying. Because of their position, the trustee has leverage over the beneficiary and cannot arbitrarily decide to sell it to themselves instead of the beneficiary. 

“Probate law is in place to protect the beneficiaries and the trust. We recently litigated a case where a trustee made risky investments in a start-up business. After we did some digging, we discovered that they had a personal stake in this business. We were able to prove this in court and recover the funds.” – Alison Gokal, a partner and California trust litigation lawyer at Gokal Law Form with nearly two decades of litigation experience.

What Should I Do When there is a Conflict of Interest?

Anytime a trustee takes an action that seems to be for their benefit instead of the beneficiary’s or the trust’s, this is a severe red flag that they are not upholding their trustee duties in California and could signal a conflict of interest.

One possible route you can take is filing a surcharge, or “damages order,” against the trustee, which is a request for the court to order that the trustee pays the money they mishandled back to the trust.

If it is particularly severe, you can also seek to remove the trustee. In these situations, contacting a trust litigation attorney in Orange County as soon as possible is essential, otherwise, you risk missing the limited window to pursue litigation.

If there is a conflict of interest, they will determine the best course of action for your case, collect evidence, help you navigate the litigation process, contact expert witnesses, and present it in a compelling way in court. 

Premier California Trust Litigation Lawyers

If a trustee has shown signs that there is a conflict of interest, this is a severe breach of trustee duties in California, and acting quickly is of the utmost importance to protect your inheritance and the trust itself.

Visit our Contact Us page and fill out a form to schedule a case evaluation to receive justice and end this underhanded behavior.