A violation by the trustee of any duty that the trustee owes the beneficiary is a breach of trust [Prob Code § 16400]. Therefore, when breach of trust is asserted as a ground for removal of a trustee, it should be stated with reference to one or more of the trustee’s duties as specified in the Probate Code. The Probate Code codifies the duties a trustee owes to the beneficiary as follows: Duty to administer the trust [Prob Code § 16000]; Duty of loyalty [Prob Code § 16002]; Duty to deal impartially with beneficiaries [Prob Code § 16003]; Duty to avoid conflicts of interest [Prob Code § 16004]; Duty to not to require the beneficiary to relieve the trustee of liability as a condition for distribution [Prob Code § 16004.5]; Duty to not to undertake an adverse trust [Prob Code § 16005]; Duty to take control of and preserve trust property [Prob Code § 16006]; Duty to make the trust property productive [Prob Code § 16007; Duty to keep trust property separate and identified as trust property [Prob Code § 16009]; Duty to enforce claims [Prob Code § 16010]; Duty to defend actions [Prob Code § 16011]; Duty to not delegate administration of the trust [Prob Code § 16012]; Duty to work dutifully with co-trustees [Prob Code § 16013]; (liability issues with co-trustees)]. Duty to use special skills [Prob Code § 16014]; (general duties of trustee)]. Duty to provide information to beneficiaries [Prob Code § 16060 et seq]; Duty to report and account [Prob Code § 16062]; Duty to exercise discretionary powers reasonably [Prob Code § 16080]; Trustee Must Exercise All Duties With Reasonable Skill and Care. The reasonableness of a trustee’s exercise of his or her duties is measured against the statutory standard of care. The trustee is required to administer the trust with reasonable care, skill, and caution under the circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument [Prob Code § 16040(a)]. A breach of trust may be negligent, willful, and/or fraudulent, depending on the circumstance, and the presence of reliance and injury [Estate of Gump (1991) 1 CA 4th 582, 2 CR2d 269]. Ordinarily, a trustee must be personally at fault to be liable for breach of trust [Restatement (Second) of Trusts § 201, Comment a (1959)]. This fault requirement is satisfied when the trustee commits a breach of trust (1) in bad faith, (2) knowingly but in good faith, or (3) negligently [Restatement of Trusts, § 201]. Terms of Trust May Override Statutory Duties. The terms of the trust may override the statutory duties of a trustee, except for certain aspects of the trustee’s duty to keep the beneficiaries informed and the trustee’s fundamental obligation to act in good faith, in accordance with the purposes of the trust, and for the benefit of the beneficiaries [Prob Code §§ 16000, 16461]. A trustee is not liable to the beneficiary for the trustee’s good faith reliance on a restriction or expansion by the settlor of the trustee’s duty or standard of care [Prob Code § 16040(b)]. Beneficiary May Ratify Trustee’s Unauthorized Conduct. A beneficiary with capacity may consent, release, or affirm a trustee’s otherwise unauthorized conduct [Prob Code §§ 16463 (consent), 16464 (release), 16465 (affirmation)]. Under such circumstances, a trustee’s action in violation of his or her normal statutory duties would not constitute a breach of trust forming grounds for renewal. Criminal Liability In addition, a trustee who misappropriates trust property may be criminally liable for embezzlement [see Pen Code § 506]. Contact us today for assistance with your case.

The number of lawsuits against trust, probate and estate planning attorneys has significantly increased over the last several years. Today, trust, probate and estate planing attorneys are charged with legal malpractice and breach of fiduciary duties more than any other single practice area, according to a recent survey of the largest professional liability insurers in the country. There are several reasons driving this upsurge in claims volume. Historically, the liability of an estate planning attorney was predicated on privity between the attorney and the client. Over time, the rule of privity eroded and, in a majority of states, a third party can bring a malpractice suit against an estate planning attorney, opening the door to non-client claims by unhappy heirs or beneficiaries. Trust, probate and estate planning is also a highly technical and intricate area of the law, often with changing legal standards. This escalation in litigation is likely to continue and increase significantly in the next few years given the current and expected enormous transfer of wealth from baby boomers to subsequent generations. However, trust, probate and estate planning attorneys can reduce their exposure to malpractice and breach of fiduciary duties by following some simple guidelines, including understanding the parameters of the attorney-client privilege, practicing safe communications, understanding relevant law, and identifying potential conflicts of interest and addressing them — a unique challenge in this practice area because of the potential for claims by non-clients. Potentially Unethical Conduct in Relation to Charitable Giving – Red Flags Drafting a Bequest to a Charity for Which the Attorney Serves as a Director Drafting a Bequest to a Charity for Which the Attorney Serves on a Planned Giving Committee or Legacy Society Representing a Client Regarding a Lifetime Gift to a Charity for Which the Attorney Serves as Director Permitting a Charitable Organization for Which the Attorney Serves as a Director to Recommend the Attorney’s Estate Planning Services Recommending a Charity for Which the Attorney Serves as a Director as the Object of a Bequest Accepting Payment for a Client’s Estate Planning Services from a Charity Benefitting from the Estate Plan Donating Estate Planning Services to a Charitable Auction Communicating That the Attorney Will Donate a Portion of His Fees for Estate Planning Services to a Charitable Organization Entering into an Agreement with a Charitable Organization to Charge a Reduced Fee to Members of the Organization in Consideration for a Bequest to the Organization Offering to Provide Estate Planning Services at No Charge for a Client Who Wishes to Make a Bequest to a Charitable Organization for Which the Attorney Serves as a Director Offering to Provide Estate Planning Services at No Charge to Members of a Charitable Organization, Such as a Synagogue, Mosque, or Church Contact us today for assistance with your case.

Trust beneficiary subject to power of appointment filed probate petition for determination that he was entitled to portion of his grandfather's trust estate upon distribution and sought constructive trust on that portion. The Superior Court, San Diego County, No. P82080, Julia C. Kelety, J., sustained trustee's demurrer without leave to amend. Beneficiary appealed. The Court of Appeal, Nares, J., 206 Cal.App.4th 875, 142 Cal.Rptr.3d 174, reversed and remanded with directions. Following trial on remand, the trial court entered judgment awarding beneficiary portion of estate. Beneficiary appealed, arguing award was improperly limited. The Court of Appeal, Nares, J., held that beneficiary was entitled to one-third of estate as taker in default. Reversed and remanded. View the Case Details: