So you just found out you’re the trustee of a California trust. Or maybe you’re a beneficiary who suspects something isn’t right. Either way, you’re probably realizing that nobody handed you a clear set of rules when this started. The California Probate Code runs thousands of sections long, family emotions run hot, and the stakes — real property, retirement accounts, family heirlooms, sometimes millions of dollars — couldn’t be higher.
This article is for you. Whether you’re sitting in the trustee’s chair or waiting on distributions that seem to be taking forever, knowing what the law actually says can be the difference between a smooth administration and years of costly litigation.
What Is a California Trust, and When Do the Rules Kick In?
A California living trust is typically revocable while the person who created it — called the settlor — is alive and mentally competent. During that period, the settlor can change the trust, pull assets out, or shut it down entirely. Beneficiaries have essentially no enforceable rights at that stage. The trust is still the settlor’s show.
Everything changes the moment the trust becomes irrevocable. That usually happens when the settlor passes away, though it can also occur if the trust document says so, or if the settlor becomes mentally incapacitated. From that point forward, a set of obligations and protections written into California law snap into place, and both trustees and beneficiaries need to know exactly where they stand.
What Trustees CAN Do in California
Trustees in California have real authority, and they’re entitled to use it. Here’s a practical look at what the law allows.
Manage and invest trust assets. California’s Uniform Prudent Investor Act (Probate Code §§ 16045–16054) gives trustees broad authority to invest trust assets across a range of instruments — stocks, bonds, real estate, and more. The legal standard isn’t perfection. It’s whether a prudent investor would have made similar decisions given the trust’s purpose and the beneficiaries’ circumstances.
Hire professionals. Trustees can retain attorneys, accountants, financial advisors, and real estate agents to help with administration. These are legitimate trust expenses, and the trustee is not personally liable for reasonable reliance on sound professional advice. (Probate Code § 16052.)
Pay themselves reasonable compensation. Trustees are entitled to be paid, as long as the compensation is reasonable given the nature and complexity of the trust. (Probate Code § 15681.) What counts as reasonable depends on the trust’s size, the trustee’s workload, and local custom. Professional corporate trustees often charge annual fees based on a percentage of the trust’s assets.
Make discretionary distribution decisions. When the trust document gives the trustee discretion over distributions, the trustee can exercise that judgment. Courts will generally not substitute their own view for the trustee’s, as long as the decision wasn’t arbitrary or a clear abuse of discretion.
Sell trust property. Unless the trust document restricts it, a trustee has the power to sell real and personal property, with the proceeds remaining part of the trust estate.
What Trustees CANNOT Do in California
This is where things tend to go sideways. California law imposes strict fiduciary duties on trustees, and violations can result in personal liability, financial surcharge, and removal from office. Here are the hard limits.
Self-dealing is off the table. Under Probate Code § 16004, a trustee cannot use trust property for personal benefit or enter into any transaction where personal interests conflict with the trust’s interests. Selling trust property to yourself, your spouse, or your own business at below-market value is a textbook violation — and California courts take it seriously.
Commingling funds is prohibited. Trustees must keep trust assets completely separate from their personal finances. Depositing trust money into a personal bank account, even briefly, is a breach of the duty to segregate trust property under Probate Code § 16009.
Favoring one beneficiary over another. When a trust has multiple beneficiaries, the trustee has a duty of impartiality. (Probate Code § 16003.) A trustee who consistently advantages one sibling over another in discretionary distributions may be breaching this duty.
Withholding information beneficiaries are entitled to. Probate Code § 16060 requires trustees to keep beneficiaries reasonably informed about the trust and its administration. This isn’t optional. Stonewalling a beneficiary who asks legitimate questions is a breach, plain and simple.
Refusing to account. Under Probate Code § 16062, trustees of irrevocable trusts must account to beneficiaries at least once a year. That accounting must include the items required by Probate Code § 16063: receipts and disbursements, a statement of assets and liabilities, trustee compensation, agents hired, and notice of the beneficiary’s right to petition the court.
Charging excessive fees. Trustees cannot pay themselves whatever they feel like. Unreasonable compensation is both a breach of fiduciary duty and statutory grounds for removal under Probate Code § 15642.
Failing to send the required trustee notice. When a revocable trust becomes irrevocable, the trustee must send a formal “Notification by Trustee” to all beneficiaries and heirs within 60 days under Probate Code Section 16061.7. Recipients then have 120 days from the date of service, or 60 days from receiving a copy of the trust, whichever is later, to file a contest. Skipping or delaying this notice exposes the trustee to serious legal consequences.
What Beneficiaries CAN Do in California
If you’re a beneficiary of an irrevocable California trust, you have real, enforceable rights. Here is what the law gives you.
- Request a copy of the trust. Once the trust becomes irrevocable, you can demand a complete copy of the trust document and any amendments. (Probate Code § 16061.7.)
- Demand an accounting. You can request an annual accounting showing what’s in the trust, what came in, what went out, and what the trustee was paid. If the trustee refuses, you can petition the probate court to compel one. (Probate Code § 16062.)
- Receive ongoing information. Even outside of a formal accounting, the trustee must respond to your reasonable requests for information relevant to your interest in the trust. (Probate Code § 16061.)
- Petition the probate court. If you believe the trustee is breaching their duties, you can file a petition in the Superior Court in the county where the trust is administered. (Probate Code § 17200.) The court can compel an accounting, surcharge the trustee for losses, suspend the trustee’s powers, or remove the trustee altogether.
- Seek trustee removal. Probate Code § 15642 gives courts the authority to remove a trustee on several grounds, including breach of trust, insolvency or unfitness, failure or refusal to act, excessive compensation, hostility among co-trustees that impairs administration, and substantial inability to resist fraud or undue influence. You bring the petition under Probate Code § 17200 and present your evidence to the court.
- Waive the 120-day contest period. If you’re satisfied with how the trust is being administered, you can voluntarily sign a waiver to shorten the waiting period before distributions begin. This is always optional and should never be signed without thinking it through carefully.
What Beneficiaries CANNOT Do in California
Beneficiaries have rights, but they don’t run the trust. There are clear limits worth knowing.
Beneficiaries cannot direct the trustee. Unless the trust document says otherwise, a beneficiary has no authority to tell the trustee how to invest, what to sell, or how to make distributions. That’s the trustee’s job, and demanding that the trustee follow your personal instructions rather than the trust’s terms is not a right beneficiaries have.
Beneficiaries cannot take trust property on their own. Removing money or property from the trust without a proper distribution from the trustee is conversion — a serious civil wrong that could carry additional legal consequences.
Beneficiaries cannot let the contest deadline slip. The window to contest a California trust is firm: 120 days from the date the Probate Code § 16061.7 notice is served, or 60 days from the date a copy of the trust is actually delivered during that period, whichever is later. Once that window closes, the right to contest is gone.
Beneficiaries cannot file bad-faith removal petitions without consequences. Under Probate Code § 15642(d), if a court finds that a removal petition was filed in bad faith and that removal would be contrary to the settlor’s intent, the court can order the petitioner to pay the trustee’s attorney’s fees and costs. Using a removal petition as a pressure tactic or to punish a trustee you simply don’t get along with is a gamble that can backfire financially.
Beneficiaries cannot demand a signed release before receiving a required distribution. Probate Code § 16004.5 prohibits a trustee from making a beneficiary sign a release of claims as a condition of receiving a distribution that the trust requires be made. That said, a trustee may still ask for a voluntary release — they simply cannot make it a condition of payment. If a trustee insists on a release before handing over money the trust already requires them to pay, that is itself a breach of fiduciary duty.
Key Takeaways
- A revocable trust gives beneficiaries almost no enforceable rights while the settlor is alive and competent. That changes the moment the trust becomes irrevocable.
- Trustees must serve the required Notification by Trustee within 60 days of the trust becoming irrevocable. (Probate Code § 16061.7.)
- Trustees owe a duty of loyalty (Probate Code § 16002), a duty of impartiality (Probate Code § 16003), and a duty to keep beneficiaries reasonably informed at all times (Probate Code § 16060.)
- Trustees must account annually and cannot commingle funds, self-deal, or pay themselves unreasonable compensation.
- Beneficiaries can compel accountings, petition for trustee removal, and seek surcharges for losses caused by trustee misconduct.
- Beneficiaries cannot direct the trustee, take trust property without authorization, or file removal petitions that are both in bad faith and contrary to the settlor’s intent without risking a fee-shifting order.
- The contest deadline is real and unforgiving. If you have concerns about a trust’s validity, act immediately.
Frequently Asked Questions
What happens if a trustee refuses to give me an accounting?
You can file a petition in the probate court to compel the trustee to provide one. If the court finds the refusal was unreasonable, it may also award you attorney’s fees. (Probate Code §§ 16062, 17200.)
Can I be both a trustee and a beneficiary of the same trust?
Yes, California law allows this. But a trustee-beneficiary must still act impartially toward all other beneficiaries and cannot use their position to give themselves an advantage that the trust doesn’t authorize.
How long does a trustee have to distribute assets after the settlor dies?
There is no hard statutory deadline, but most California trust administrations wrap up within 12 to 18 months of the settlor’s death. Unreasonable delays are a legitimate basis for court intervention.
What is a no-contest clause, and can it affect my right to challenge the trust?
A no-contest clause — sometimes called an in terrorem clause — can reduce or eliminate a beneficiary’s share if they contest the trust and lose. But California law enforces these clauses only in very specific circumstances spelled out in Probate Code §§ 21310–21315. Enforcement is generally limited to direct contests brought without probable cause, certain pleadings challenging property ownership (if the clause expressly covers them), and certain creditor’s claims (again, only if the clause says so). Courts in California interpret no-contest clauses narrowly, and not every legal challenge to a trust will trigger one. If you’re weighing whether to challenge a trust that contains one of these clauses, talk to an attorney before making any moves.
Can a trustee sell the family home without all the beneficiaries agreeing?
Generally yes, if the trust document grants the trustee authority to sell real property and the trustee is acting within their fiduciary duties. If the sale looks like self-dealing or appears designed to harm beneficiaries, the court can step in.
What if the trustee is also a beneficiary and is taking more than their share?
That likely constitutes self-dealing and a breach of the duty of impartiality. You can petition the probate court to remove the trustee, seek a surcharge to recover the excess distributions, and ask the court to appoint a replacement trustee.
What does it cost to go to probate court over a trust dispute?
Filing fees vary by county in California, and attorney fees depend on how complicated the dispute is. In cases where the trustee’s misconduct caused the litigation, the court has discretion to order the trustee to pay litigation costs out of the trust estate.
When Things Get Complicated, We’re Ready
Trust disputes rarely stay simple. What starts as a question about a delayed distribution or a missing accounting can turn into full-blown litigation before anyone realizes how far things have gone. Whether you’re a trustee who wants to do everything by the book or a beneficiary who feels like you’re being kept in the dark, the earlier you get sound legal guidance, the better your options tend to be.
At Casiano Law Firm, we represent trustees and beneficiaries in trust disputes throughout San Diego County, Orange County, Los Angeles County, Riverside County, and San Bernardino County. We know how California probate courts work, and we know how to protect what matters to you and your family.
If you have questions about your rights or obligations under a California trust, reach out to our trust litigation team today. A conversation now could spare you months of stress — and protect your share of the estate.
