How Do I Prove Breach of Trust in California?

Oakland Trust Litigation Attorney Explains Your Options as Beneficiary

Photo of a legal documentWhen a person creates a trust, he or she appoints a third-party trustee to manage the assets in the trust on behalf of the beneficiary or beneficiaries. This trustee must abide by the rules of the trust and act in the best interests of the beneficiaries. The trustee’s fiduciary duties include managing investments of the assets in the trust, completing tax returns and administering payments and distribution of assets. If a trustee breaches a fiduciary duty or otherwise does not act in good faith, then the beneficiaries may suffer economic losses. However, you may be able to recover monetary damages through a breach of trust case.

Trust litigation attorney Charles Triay, founder of Triay Law Office, has been assisting California residents investigate, prove and file trust mismanagement cases since 1977. He is a certified specialist in trust law as well as estate planning and probate law. If you believe your trustee is guilty of a breach of fiduciary duty, contact our attorneys today.

What Qualifies as a Breach of Trust?

A breach of trust may be any action or omission by a trustee that violates the terms of the trust or the trustee’s fiduciary duties. Often, a breach of trust unfairly benefits the trustee or gives advantages to some beneficiaries over others. A trustee’s breach of fiduciary duty can be one or more of the following:

  • The trustee has or had a conflict of interest that resulted in trust mismanagement to the advantage of someone besides the beneficiary.
  • Actions on the part of the trustee resulted in his or her personal benefit. This may result from using the assets for him or herself.
  • The trustee’s actions were swayed by outside influence, such as a bribe. A trustee should always act in the best interest of the beneficiary, first and foremost.
  • Trust mismanagement resulted from the trustee’s negligence. In this case, you must prove that losses resulted from negligence or bad faith actions. If the trustee acted in good faith, but an investment did not produce as expected, for example, you likely do not have a claim.
  • The trustee did not act in the best interests of the majority of beneficiaries. This is most common when one or two beneficiaries profit more than the rest of the group.

It can be difficult to tell when a breach of fiduciary duty occurs. Therefore, if you are a trust beneficiary, you should always take care to monitor the trustee’s accounts and actions. If you notice any inconsistencies or believe the trustee is abusing his or her power, contact a trust litigation attorney.

How Can I Recover Damages for Trust Mismanagement?

If there was trust mismanagement, you and your lawyer can file a petition for the trustee’s removal and replacement. However, recovering the losses that resulted from the breach of trust will depend on the circumstances of the case. Sometimes, the court may simply order that the assets be transferred back into the trust. Alternatively, if the trustee spent the funds on nonmaterial things, like vacations, you may need a money judgment instead. The possible ways to recover damages in trust mismanagement cases include:

  • Constructive trust. Often, misused funds are traceable to a property purchase, such as a house. In such cases, the court may order a constructive trust to recover these assets.
  • Surcharge. The court may order a reduction in the amount of the trustee’s inheritance share or fees from the trust. This amount is in accordance with the sum lost or mismanaged, which the court will determine.
  • Money judgment. When there is no way to recover the actual assets or funds from the trustee’s fees or inheritance share, the courts will issue a judgment against the trustee. The trustee must then use personal assets to pay this sum and compensate the trust.

Generally, the amount that the trustee must pay depends on the extent of the damage caused to the trust and/or your interests in the trust as beneficiary. Sometimes, this may include interest on that amount. Usually, financial experts will determine the monetary value of the damage that results from a trustee’s breach of fiduciary duty

Suspect Mismanagement? Contact a California Trust Litigation Attorney Today

If you suspect that trust mismanagement has negatively impacted your inheritance, contact trust litigation attorney Charles Triay. The lawyers at Triay Law Firm have over 30 years of experience assisting clients with trust cases. Additionally, our San Francisco area law firm offers clients a choice between paying attorney fees on an hourly or contingent basis. Call (510) 463-3165 or contact us online today to schedule an initial consultation.