When are trustees liable for acts or omissions of another?

"A violation by the trustee of any duty that the trustee owes the beneficiary is a breach of trust." California Probate Code § 16400.

Liability for acts of agents

In general, a trustee is not liable for the acts or omissions of an agent. However, if the agent acts at the direction of the trustee and such action would be a breach of trust, the trustee will be liable to the trust beneficiary. Similarly, if the trustee delegates an authority to the agent under which the trustee is under a duty not to delegate, that is a breach of trust. Also, if the trustee does not use "reasonable prudence" in selecting or retaining the agent or fails to review periodically the overall performance and compliance of the agent, then the trustee is liable for a breach of trust. Finally, if the trustee acts to conceal from knowledge the acts of the agent or fails to take steps to make the agent redress wrongs of which it has knowledge, the trustee is guilty of breach of trust.

Liability for acts of co-trustees

In general, a trustee is not liable for the acts or omissions of a co-trustee. However, if the trustee participates with a co-trustee in a breach of trust, the trustee will be liable to the trust beneficiary. A trustee who improperly delegates a duty to a co-trustee, "approves, knowingly acquiesces in, or conceals a breach of trust committed by a co-trustee," or is negligent in enabling a co-trustee to commit a breach of trust, has also committed a breach of trust and is liable to the trust beneficiary.

Liability for acts of predecessor trustees

In general, a successor trustee is not liable for a breach of trust committed by a predecessor trustee. However, if the successor trustee should have reasonably known of facts making up a breach of trust by a predecessor trustee and then allows that situation to continue, the successor trustee is liable for breach of trust. Similarly, a successor trustee is liable for breach of trust if he or she neglects to either take reasonable steps to make the predecessor trustee deliver trust property or fails to redress a breach of trust committed by the predecessor trustee, assuming the successor trust knows, or should have known, that the predecessor trustee was guilty of breach of trust.

Speak to a California trust and probate lawyer

The Law Office of Barbara J. Dibble offers free initial consultations. Appointments can be scheduled by contacting the office online or by calling 714-515-5126 (toll free at 866-968-3546). Evenings or weekend appointments are available, if necessary. The office is located near the Orange County Courthouse, near the 57 and 91 freeways.