Breach of Fiduciary Duty in California

Breach of Fiduciary Duty Lawyers

Beneficiaries of a trust or estate have the right to expect the trustee or personal representative to follow the trust or will and to do what is right for the beneficiaries. If they fail to do so, whether intentionally or not, it may be a breach of fiduciary duty.

The attorneys of Fox Law are experienced trust and estate litigation attorneys committed to helping their clients pursue the truth and honor their loved ones’ wishes.

What Is a Fiduciary?

Someone in a position of trust who is obligated to act in the best interest of others is called a fiduciary. Some types of fiduciaries include:

• The trustee of a trust, which may be an individual or a trust company
• The personal representative of a probate estate
• An agent or “attorney-in-fact” under a power of attorney
• A guardian or conservator of a vulnerable person
• A lawyer or financial advisor
• A business partner

California Probate Code §39 describes many types of fiduciary relationships in the estate and trust context.

Common Breaches of Fiduciary Duty

A breach of fiduciary duty can happen in many ways. Some of the most common are:

• Self-dealing, such as borrowing from a trust or steering assets into investments that benefit them personally
• Lack of transparency, such as hiding transactions or failing to provide accountancy
• Mismanagement of assets, such as failing to diversify investments
• Commingling assets, like using one bank account for both estate and personal funds
• Failing to follow the terms of a trust or will, such as making unauthorized distributions
• Favoring one beneficiary over another without justification
• Charging excessive or unreasonable trustee fees
• Delaying trust or estate administration without good reason

Most of the time, a breach of fiduciary duty relates to one of three core duties: the duty of loyalty, the duty of care and competent management, or the duty of impartiality and transparency. If you are not sure whether conduct constitutes a breach, a breach of fiduciary duty lawyer can explain the law and your legal options.

What Are the Remedies for Breach of Fiduciary Duty in California?

If you have been affected by a breach of fiduciary duty, there are remedies available. If a court finds a breach of trust by the trustee, California Probate Code §16420 authorizes the court to take various actions depending on the circumstances:

• Compel the trustee to perform their duties
• Enjoin (prohibit) the trustee from committing a breach
• Order a surcharge (repayment by the trustee of losses or improper profits)
• Compel an accounting
• Void improper transactions or other acts
• Appoint a receiver
• Reduce or deny trustee compensation
• Order a party who acted in bad faith to pay the other party’s reasonable attorney fees.

Similar remedies are available for breach of fiduciary duty in a probate estate under California Probate Code §§9601-9603 and other statutes. Probate estates are more closely supervised by the court than trusts, which means personal representatives often must seek court permission for transactions, and breaches are more likely to be detected sooner.