Family Trustee Abuse: What California Beneficiaries Can Do

One of the most painful and unfortunately common situations we see in California trust litigation is when a child, often a son or daughter, is appointed as trustee over their aging parents’ trust and then uses that position for their own personal gain. What begins as a role of trust and responsibility often ends in betrayal, secrecy, and financial abuse. Once the parents pass away the next victims are the trust beneficiaries.  

The purpose of this blog is to show claims that are available to the trust beneficiaries when a trustee in California crosses the line.

The Setup: Family Member Appointed as Trustee 

In this case, a parent created a revocable trust decades before passing away. After one parent died, the surviving parent appointed one of her children as successor trustee. This child remained in that role for the last five years of the surviving parent’s lifetime, managing the trust and controlling access to the family’s assets. 

But when the surviving parent passed away, the surviving siblings, also named as beneficiaries, began asking questions. What happened to all the trust assets? Where were the accountings? Why wouldn’t the trustee provide clear answers? 

The Allegations: Theft, Secrecy, and Abuse of Power

family member trustee abuse

 

In this example, the trustee had spent years secretly using trust assets for their own benefit. These weren’t minor or accidental transactions. They were described as systematic and knowing violations of fiduciary duties. Allegations included: 

  • Using trust property for personal benefit
  • Failing to provide accountings during and after the parent’s lifetime
  • Refusing to disclose what was taken or when
  • Stonewalling beneficiaries’ inquiries

The kicker? After resigning, the former trustee hands off the role to another family member to act as a new and successor trustee, who then also refuses to investigate or take action against the prior trustee’s misconduct.

Legal Claims Against the Bad Trustee  

In this example, the beneficiaries can bring a petition asking the probate court for multiple forms of relief. Here’s a breakdown of the possible claims one can make in that lawsuit, many of which apply to similar situations where a trustee abuses their position: 

 

  1. Breach of Fiduciary Duty and Breach of Trust

    Under California Probate Code §§ 16000–16420, trustees owe beneficiaries duties of loyalty, impartiality, and full disclosure. A trustee cannot use trust property for personal gain. In our example case, both the former and current trustees were accused of breaching those duties – one by taking trust property, the other by covering it up.

  2. Financial Elder Abuse

    When a person over age 65 is the victim of property theft or fraud, it may qualify as financial elder abuse under California Welfare & Institutions Code § 15610.30. If proven, this carries enhanced remedies – double damages, attorneys’ fees, and more. It can also lead to the abuser being legally disinherited under Probate Code § 259.

  3. Failure to Account and Provide Information

    Trustees are legally required to provide annual accountings and respond to reasonable requests for information. In our example, the beneficiaries may allege that no meaningful accounting was ever provided for years of administration, and that the trustee withheld records from beneficiaries even after both parents had passed away. 

  4. Removal of Trustee and Appointment of a Neutral Fiduciary

    When a trustee is conflicted, self-dealing, or openly adversarial to the beneficiaries, the probate court has discretion to suspend or remove them. In our example, the beneficiaries may ask the court to do exactly that, replace the family trustee with a neutral, independent third-party fiduciary.

  5. Surcharge and Denial of Trustee Compensation

    A trustee who breaches fiduciary duties can be ordered to return fees and pay damages, called a surcharge. In our example, the beneficiaries may ask the court to deny both trustees any fees and require the trustees to repay any fees already taken from the trust.

  6. Civil Theft Under Penal Code § 496(c)

    This lesser-known but powerful claim allows a trust beneficiary to recover treble (triple) damages, attorney’s fees, and costs if the trustee’s misconduct amounts to theft under California law. Importantly, no criminal conviction is required, just proof that property was obtained through theft or fraud. 

The Takeaway: What Beneficiaries Should Watch For 

 

If you are a California trust beneficiary and notice any of the following red flags, it may be time to consult a trust litigation attorney: 

  • The trustee refuses to provide an accounting or trust documents
  • Trust property appears to be missing or used for personal gain
  • A family trustee stonewalls questions or becomes hostile
  • You suspect your parent was financially exploited before death

The law provides powerful remedies, but they must be actively pursued. Trustees have enormous power, but that power is supposed to be exercised in the best interest of the beneficiaries. When that promise is broken, the courts can, and should, step in.

If you’re unsure whether you need legal help, consider scheduling a free consultation with an experienced probate lawyer. A good lawyer can quickly assess your situation and guide you on the best course of action.

In 2008, Mr. Davidson joined forces with Stewart Albertson to form a firm focused on integrity, enthusiasm, and creativity – values that he continues to foster in both his own practice and that of the firm. As a result, the firm has obtained over $130 million in verdicts and settlements over the past ten years, and he has guided the growth and expansion of the firm to include five California offices, including San Francisco, Silicon Valley (Redwood City), Los Angeles, Orange County (Irvine), and Carlsbad.