Steps to Take If a Trustee Is Mismanaging a Trust in California

A trustee is responsible for carrying out the financial wishes of someone who has passed away. The deceased and their beneficiaries would have chosen that person because they trusted them with their assets. It can be difficult to know what to do if you begin to suspect something dishonest or abnormal is happening with the trust. A trust lawyer can guide you through the steps to take if a trustee is mismanaging a trust in California.

If the trustee is indeed mismanaging the trust, then you might have legal recourse, which would not only hold the trustee liable for mismanaged funds but could also lead to criminal charges.

The Trustee’s Responsibilities

According to a 2025 survey, only 24% of Americans had an estate plan in place. Having a trust can protect your assets from having to go through probate and from debt collectors. It’s important to have a trustee who is responsible and can make necessary decisions that are in line with the wishes of the deceased and of the beneficiaries.

A trustee is responsible for the following things:

• Administering the trust with care
• Providing trust accounting to the beneficiaries
• Keeping the trust confidential
• Not acting in their own interest
• Using their discretionary powers with care
• Working with the co-trustees
• Managing investments and assets
• Maintaining proper accounting of the assets

If the trustee fails to act in the best interest of the trust, they are in breach of fiduciary duty, and you might need to seek trust litigation.

How to Tell if a Trust Is Mismanaged

Some of the signs that a trust is being mismanaged include the following:

• The beneficiaries’ distributions are regularly late or delayed.
• The trustee refuses to provide an accounting of the estate or fails to answer your questions honestly.
• The trustee’s decisions seem to be motivated by their own self-interest instead of the interests of the estate.
• The trustee asks for an unreasonable fee.
• There is little to no communication about the trust.

These aren’t the only signs, and the mismanagement doesn’t have to be a conscious decision. If the trustee seems to be neglecting their duties or is otherwise incapable of making decisions, then it might be time to consult with a trust attorney to find out what your options are.

Steps to Take if a Trustee Is Mismanaging a Trust

If you believe the trustee is mismanaging the trust, you should take the following steps:

1. Verify that the mismanagement is happening. Request that the trustee provide you with an accounting.
2. Keep track of the trustee’s activity and how they’re managing the trust.
3. Attend trustee meetings and ask questions.
4. Have a lawyer review the trust documents.
5. Seek the advice of a California trust attorney if you have any questions or would like guidance.

Hire a Trust Lawyer

Because of California’s statute of limitations, it’s important to act quickly. The courts take mismanaging the estate very seriously. If you have evidence, then working with a trust lawyer will provide you with the guidance you need to stop the mismanagement.

Not only could the trustee be charged a surcharge, but they could also be removed from the trust and held responsible for paying back the losses. If they have been embezzling or participating in other fraudulent behavior, they could face criminal charges.

To start an investigation, you’ll need to file a petition with the probate court at the Stanley Mosk Courthouse on Hill Street. An experienced trust lawyer can guide you through this process and help ensure you’re compliant with the law as you move forward.

FAQs

What Happens if a Trustee Mismanages a Trust?

If a trustee is mismanaging a trust, whether purposeful or not, the beneficiaries might have legal recourse. They have the option to do either of the following:

• File for breach of fiduciary duty
• Remove the trustee completely

If the trustee has committed serious wrongdoing, they could be charged with a criminal offense. Speak with a trust attorney at Hinojosa and Forer LLP to find out what steps you can take.

How Do You Hold a Trustee Accountable?

It is entirely acceptable to track the trustee’s management of the account. You can also attend trust meetings to track how the trust is being managed. It’s important to speak up if you notice anything out of the ordinary.

If you suspect that the trustee is mismanaging the trust, you can ask them for an account of their actions. If they refuse, you should contact an attorney to discuss your options.

What Constitutes Misconduct From a Trustee?

Misconduct of a trustee can take many forms, including:

• Failure to follow the terms of the trust
• Mismanaging the trust’s assets, which can happen due to negligence or incompetence
• Using the funds for the trustee’s own benefit
• Disagreements that are irreconcilable with the beneficiary

If you suspect or are experiencing any of these with the trustee, you may have grounds to remove them from the trust and perhaps seek trust litigation.

What Is It Called When a Trustee Fails to Act Appropriately?

When a trustee fails to act according to the trust, they are in breach of their fiduciary duty. This can happen if the trustee has their own financial interest tied into the trust or begins making decisions that go against what the deceased would have wanted. If you, as the beneficiary, feel like the trustee is making decisions in opposition to the trust or your interests, it might be appropriate to seek legal recourse.

Contact Hinojosa and Forer LLP Today

If you have suspicions that the trustee or co-trustees are mismanaging your trust, don’t wait to hire a trust lawyer. The attorneys at Hinojosa and Forer LLP have decades of experience with trust cases and are eager to help you.

One client said, “Outstanding Law firm from the beginning to the end. I had a trust litigation that Lyn handled. I had to fight family members and, oh boy, is he a fighter.”

Hinojosa and Forer LLP can fight for you, too. Contact us today to schedule a consultation with one of our trust lawyers.