A trustee is responsible for preserving the integrity of a trust by fulfilling the wishes of the person who created it and safeguarding the interests of beneficiaries. Because of this, they have considerable power. It is an unfortunate fact that many trustees abuse their position and power for their gain, and these situations are where we often see a conflict of interest between a trustee and beneficiary in California. Thankfully, as a beneficiary, California trust law is on your side, and we can help enforce it.
At Gokal Law Group, we have dedicated years to successfully representing countless beneficiaries like you—victims of ill-intentioned trustees who used their power for their gain.
What Constitutes a Conflict of Interest Between a Trustee and Beneficiary in California?
A conflict of interest is any situation in which a trustee’s interests or loyalties, including their relationships or debts, could impact decision-making and prevent them from acting in the best interests of the beneficiaries.
More specifically, a conflict of interest arises for a trustee when their financial, professional, or other interests could seemingly influence their decision-making because it would undermine their ability to act in the beneficiaries’ best interests.
When a conflict of interest arises, this is a breach of a trustee’s fiduciary duty and grounds for trust litigation. Probate law clearly states a trustee can never:
- Use or deal with trust property for their profit
- Use trust property for a purpose not related to the trust
- Participate in transactions that oppose beneficiary interests
- Commit self-dealing and use the trust for their gain
- Enforce a claim against trust property they purchased after being appointed trustee
- Engage in a transaction with a trust beneficiary in which they gain an advantage
Trustees also have a duty of impartiality and must avoid creating an unfair advantage for specific beneficiaries, which is crucial in situations where a trustee is also a beneficiary.
Related Article: Trustee Duties in California: Avoiding Conflicts of Interest
What Are Examples of a Conflict of Interest Between a Trustee and Beneficiary in California?
There are countless examples of what constitutes a conflict of interest between a trustee and beneficiary in California. Common examples include when a trustee:
- Invests trust funds in their business or a related party’s business
- Sells assets to themselves or related parties at an inflated or deflated price
- Receives unreasonable or undisclosed commissions or fees
- Fails to disclose potential conflicts of interest to beneficiaries
- Favors one beneficiary over another without a valid reason
If you feel a trustee has taken action that seems to be for their benefit as opposed to that of beneficiaries, acting quickly is critical.
“A trustee has a legal obligation to avoid a conflict of interest, and this is a vital form of defense for both the beneficiary and the trust. Maybe a trustee has used trust funds to invest in their family’s business, loaned money to themselves, sold trust property to themselves below market value, or charged unreasonable compensation for their services. All of these constitute a conflict of interest and jeopardize the integrity of your trust and family legacy.”
– Mónica Reyes-Santiago, Associate Trust Litigation Lawyer, Gokal Law Group
If a trustee commits a breach of trust, you can work with a lawyer for the court to order them to pay back the money they mishandled, or you could have the court suspend their power and replace the trustee entirely to force them to relinquish control over the trust.
Ultimately, the best way to determine if you have a case and your legal recourse is by working with a premier trust litigation lawyer.
Related Article: California Trust Law: Can a Trustee Be Held Personally Liable?
Have You Been a Victim of a Conflict of Interest Between a Trustee and Beneficiary in California? Let Us Help You Enforce Your Rights!
If you have found yourself in the middle of a conflict of interest between a trustee and beneficiary in California, contacting an attorney immediately to enforce your beneficiary rights is crucial to defending your inheritance and preserving the integrity of the trust. You have a limited window to pursue litigation, so time is of the essence.
Is an underhanded trustee compromising your inheritance and family’s legacy? Visit our Contact Us page to schedule a free consultation and work with premier attorneys to reverse the damage they have done!
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5 Responses
In my situation at the time of my father ‘s death though I was a careprovider (as was my older brother a care provider and caretaker of his property)we were both excluded from his trust entirely. Upon further research he often came to his lawyer with changes to his trust. I myself was told by him that he was going to change it multiple times and even left to go see hid multiple times. Also his trustee (also beneficiary) is his estranged non biological daughter. They didn’t speak for 20 years then 2 years ago began speaking. During this time she went with him to change the trust more than once. When he died she, without a death certificate nor (when I finally got a copy of the trust) was it written in the trust that she was to receive his BMW, came to the property where my brother and I were residing and took the car. She was trustee and was only to receive 25 thousand, BMW was never mentioned in trust. There is many strange and unusual circumstances regarding my father’s estate. I am unsure if there’s even still time to contest due to the time constraints legally surrounding trusts. I am so confused and feel powerless about this. My father and I have always been very close and have never had a falling out where my sister has had a 20 year falling out, how is it that I am to receive nothing?
Thank you for your time and any information or advice would be greatly appreciated. Sorry for the lengthy paragraph but didn’t know any other way to paint the picture. Thank you
In my situation at the time of my father ‘s death though I was a careprovider (as was my older brother a care provider and caretaker of his property)we were both excluded from his trust entirely. Upon further research he often came to his lawyer with changes to his trust. I myself was told by him that he was going to change it multiple times and even left to go see his lawyer multiple times. Also his trustee (also beneficiary) is his estranged non biological daughter. They didn’t speak for 20 years then 2 years ago began speaking. During this time she went with him to change the trust more than once. When he died she, without a death certificate nor (when I finally got a copy of the trust) was it written in the trust that she was to receive his BMW, came to the property where my brother and I were residing and took the car. She was trustee and was only to receive 25 thousand, BMW was never mentioned in trust. There is many strange and unusual circumstances regarding my father’s estate. I am unsure if there’s even still time to contest due to the time constraints legally surrounding trusts. I am so confused and feel powerless about this. My father and I have always been very close and have never had a falling out where my sister has had a 20 year falling out, how is it that I am to receive nothing?
Thank you for your time and any information or advice would be greatly appreciated. Sorry for the lengthy paragraph but didn’t know any other way to paint the picture. Thank you
Wow! I wish you could of helped me back when millions were taken
From me . And i believe there is still a chance to get back what was mine. I was a sole benifiury of a trust back in 2007, and didnt recieve all that should of been mine.there was a pour- over will, and i did present a trust that was found after the case was over. And the trustee was able to get my benefit. Can you please help me?
My niece age 44 is suing her mother and me for how we trustees distributed my dad‘s trust. He died over 30 years ago and she received more than her inherited share for HEMS. The trigger date was 35 and at that age, all of her funds were already Paid to her. Although the trust was talked about at Home, she’s denying knowledge. She says her mother and me stole all the money.
I need help with my trust