Trustees hold a position of extraordinary responsibility — and with that comes access to the trust’s bank accounts, real estate, investments, and personal property. While the law imposes strict duties to safeguard these assets, some trustees abuse their authority. Trustee theft is, unfortunately, a reality in California probate cases.
At Gokal Law Group, we’ve spent years representing beneficiaries in high-stakes trust litigation, recovering stolen assets, and holding untrustworthy trustees accountable. Here’s what you need to know — and what to do — if a trustee steals from a trust.
Can a Trustee Steal From a Trust?
Yes, and it happens more often than you might think. Trustees have legal control over trust assets under Probate Code § 16000, which requires them to administer the trust solely in the interest of the beneficiaries (Probate Code § 16002). But when a trustee violates that duty for personal gain, it’s a breach of fiduciary duty and, in many cases, theft.
Common ways in which unscrupulous trustees steal from the trust include:
- Transferring assets from the trust into their own name
- “Borrowing” trust funds for personal use without repayment
- Skimming funds from trust bank accounts
- Pocketing profits from the sale of trust property
- Failing to list or inventory assets to keep them for themselves
- Charging excessive fees beyond “reasonable compensation” (Probate Code § 15681)
- Issuing loans from the trust to themselves or associates
- Commingling trust assets with personal funds (Probate Code § 16009)
What Happens if a Trustee Steals from a Trust?
If a trustee steals from a trust, California law gives beneficiaries multiple remedies to stop the misconduct, recover the assets, and remove the trustee. The right course of action will depend on the facts of your case.
What Should I Do if a Trustee Steals from a Trust?
When a trustee steals from a trust, you can take several steps to stop the theft and recover assets. When you suspect a trustee has been stealing funds, gather evidence and contact a California trust litigation lawyer.
What Should You Do First?
If you suspect theft:
- Document everything — including bank records, communications, and unusual transactions.
- Demand a formal trust accounting under Probate Code § 16062, which details all trust receipts, disbursements, and assets. Failure to provide an accounting is a red flag for potential theft.
- Contact an experienced California trust litigation attorney immediately to file the appropriate petitions in probate court.
A trust accounting is often the key evidence in proving theft. It can reveal unexplained withdrawals, missing assets, or improper transfers. And remember: a trustee’s refusal to provide an annual accounting increases the risk of undetected theft, and constitutes a breach of fiduciary duty.
Can a Trustee Be Held Criminally Liable for Stealing From a Trust?
Stealing from a trust is one of the most common reasons for removing a trustee, and penalties can vary. Working with a trust litigation attorney to represent you in a civil case is essential for your best chances of recovering the funds.
While many theft cases are handled in civil probate court, trustees can also face criminal charges for embezzlement.
- If the value is $950 or less, the offense is generally petty theft under Penal Code § 490.2 — a misdemeanor punishable by up to 6 months in county jail.
- If the value exceeds $950, it is typically felony grand theft under Penal Code § 487, punishable by up to 3 years in county jail.
Still, in some situations, a trustee can be held criminally liable for embezzlement. Nicholas D. Porrazzo, a partner and California trust lawyer at Gokal Law Group offered more insight into when stealing constitutes a felony:
“According to California Penal Code section 487, if a trustee steals $950 or less, it is a misdemeanor that can result in up to six months of jail time. If they steal more than $950, this constitutes a felony offense, which can carry a 3-year jail sentence. Still, probate court often handles these cases outside of the criminal sphere.” – Nicholas D. Porrazo, Beneficiary Lawyer, Gokal Law Group
Under Probate Code §§ 16420–16440, if theft is proven, beneficiaries can seek:
- Surcharge — forcing the trustee to repay the trust for all losses
- Return of stolen property
- Forfeiture of trustee compensation
- Removal and replacement of the trustee (Probate Code § 15642)
- Attorney’s fees if the trustee acted in bad faith (Probate Code § 17211(b))
Premier Trust Litigation Lawyers in Orange County Who Will Protect Your Rights When A Trustee Steals
The consequences for trustee theft range from loss of fees to prison time — but one thing is constant: acting quickly with skilled legal counsel is essential.
At Gokal Law Group, we fight aggressively to:
- Recover stolen trust assets
- Remove dishonest trustees
- Seek the maximum allowable damages under California law
If you suspect a trustee has stolen from your trust, contact us today to schedule a case evaluation. We’ll help you restore the trust, hold the trustee accountable, and protect your inheritance. Visit our Contact Page and schedule a case evaluation to recover stolen assets and bring an underhanded trustee to justice.
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