By: Scott Grossman on January 16th, 2025

Fiduciary Duties of Executors and Trustees in California

Understanding Fiduciary Duties in California

Losing a loved one is never easy. The grief, the emotional toll, and the overwhelming responsibilities that come with managing their estate can feel like an additional burden. In California, if you find yourself serving as an executor of a will or a trustee of a trust, you are tasked with distributing assets and must carefully uphold your fiduciary duties. These legal responsibilities can be complex, and understanding them is essential to ensuring that you fulfill your role accurately—and avoid potential legal disputes. That is why it is essential to understand your fiduciary duties as executors and trustees in California.

At The Grossman Law Firm, we’ve been helping clients navigate the probate and trust litigation process for over twenty years. We understand that when dealing with the death of the trustor, the person who created the trust, emotions run high. But it’s also crucial to remember that your legal responsibilities are just as significant. Executors and trustees alike must manage and distribute assets in a way that respects the deceased’s wishes and protects the rights of beneficiaries.

This article is meant to guide you through the fiduciary duties of executors and trustees under California law. It will explain the duties and responsibilities of a trustee and executor that you are bound to uphold. The potential consequences of not doing so, and how to avoid disputes.

What is a Fiduciary Duty?

A fiduciary duty is a legal obligation to act in the best interest of another person or entity. In the context of probate and trust administration, the executor or trustee is responsible for handling the deceased’s estate or trust assets with the highest degree of care, loyalty, and integrity.

In California, both executors and trustees are fiduciaries. Their role is to make decisions about an estate or trust’s assets and ensure that the process is carried out according to the terms of the will or trust document and the laws of California. Executors are typically appointed by the court to manage an estate during probate. In contrast, trustees oversee the administration of a trust, which can occur either during or after the decedent’s lifetime.

A fiduciary’s duty is to put the beneficiaries’ interests ahead of their own and avoid conflicts of interest. That includes making decisions that reflect the beneficiaries’ best interests. This means following the instructions of the will or trust, and managing the estate or trust assets with reasonable care.

Fiduciary Duties of Executors in California

When you are named executor of a loved one’s will, you are entrusted with managing and distributing their estate. As an executor, you have a legal duty to carry out the instructions left in the will and handle all aspects of the estate administration process with care and diligence.

Key Fiduciary Duties of Executors:

Duty of Loyalty: As an executor, you must act in the best interests of the beneficiaries and put their interests before yours. Thar means avoiding conflicts of interest or personal gain at the estate’s or its beneficiaries’ expense.
Duty of Impartiality: If there are multiple beneficiaries, an executor must act impartially, treating all beneficiaries fairly and equitably according to the terms of the will. Favoring one beneficiary over another is a violation of this duty.
Duty of Care: Executors must administer the estate with reasonable care, diligence, and prudence. It means that you must protect the estate’s assets, manage investments, and ensure that taxes are paid. Inaction or negligence could expose you to personal liability.
Duty to Account: Executors are required to provide regular accountings to the beneficiaries. You must keep accurate records of the estate’s assets, debts, income, and expenses and provide these records to the beneficiaries upon request.
Duty to Distribute Assets: Finally, you must distribute the estate’s assets according to the terms of the will and California law. That means paying off debts and taxes before distributing any assets to beneficiaries.

Common Breaches of Fiduciary Duty by Executors

Breaching your fiduciary duties as an executor can lead to significant legal consequences. Some common breaches include:

Failing to act in the best interest of the beneficiaries, such as by using estate funds for personal expenses.
Mismanaging estate assets, such as selling property for less than its market value. Or neglecting to maintain real estate.
Failing to provide regular updates or financial accountings to beneficiaries.
Ignoring or overlooking the terms of the will or failing to properly distribute the assets according to the deceased’s wishes.

Breaches of fiduciary duty can lead to lawsuits and removal from the role of executor. Suppose you are accused of breaching your fiduciary duty. In that case, you may be held personally liable for any damages that result from your actions.

Fiduciary Duties of Trustees in California

Much like executors, trustees are bound by fiduciary duties when administering a trust. Whether you are a trustee named in a will or are managing a living trust, your primary duty is to act in the best interests of the beneficiaries while following the instructions outlined in the trust document.

Key Fiduciary Duties of Trustees:

Duty of Loyalty: Trustees must act solely in the best interests of the beneficiaries and must not use trust assets for personal gain. You must avoid any self-dealing or conflicts of interest.
Duty of Impartiality: Trustees must treat all beneficiaries fairly and impartially, like executors. If multiple beneficiaries have different interests, a trustee must balance those interests according to the trust document’s terms.
Duty to Act Prudently: A trustee must manage the trust’s assets prudently. That includes making investment decisions, asset preservation, and maintaining or selling assets. However, this must be done in a way that serves the long-term interests of the beneficiaries.
Duty to Account and Report: Trustees are obligated to keep detailed records of all financial transactions, including income, expenses, and distributions, and to provide these records to the beneficiaries regularly.
Duty to Follow the Terms of the Trust: A trustee’s most critical responsibility is to follow the terms of the trust document as written without altering or deviating from them unless legally authorized to do so.

Common Breaches of Fiduciary Duty by Trustees

Common breaches of fiduciary duty in trust administration include:

Self-dealing: Using trust funds for personal expenses or investments that benefit the trustee.
Failure to provide accountings: Failure to keep beneficiaries informed about the trust’s financial status or failure to provide required documentation.
Negligence in investments: If your trustee makes poor investment decisions, the trust may suffer significant financial losses.
Failure to follow the trust’s instructions means distributing assets in a way that doesn’t align with the trust’s terms.

Trustees who breach their fiduciary duties may be required to pay damages or may even be removed from their position by the court. Sometimes, a trustee may be personally liable for losses caused by their breach of duty.

If you would still like more information on what exactly qualifies as a breach of fiduciary duty, check out our article “20 Ways Your Trustee Can Be Breaching Their Fiduciary Duty” on our website.

Differences Between Executors and Trustees

While both executors and trustees share everyday fiduciary responsibilities, there are crucial differences between the two roles.

Executors are appointed to administer a will and oversee the probate process. Their role is temporary and lasts until the estate is entirely administered and assets distributed.
On the other hand, trustees manage trusts, which can be active during the trust maker’s lifetime or continue after their death. A trustee may serve for a more extended period and is often responsible for ongoing trust management.

Each fiduciary duty is similar, but the key distinction lies in the administration process—executors work within the court’s probate process. At the same time, trustees have more discretion in managing and distributing assets outside of court.

Legal Consequences for Breach of Fiduciary Duty

The consequences can be severe if you are accused of breaching your fiduciary duties. California law holds fiduciaries to high standards, and any violations can lead to legal action from beneficiaries, including:

Surcharge: A court may order you to personally repay the estate or trust for losses caused by your breach.
Removal: Executors or trustees who fail to meet their obligations can be removed from their position by the court.
Damages: In some cases, you may be required to pay damages to beneficiaries, including any legal fees they incur due to your breach.

It’s crucial to be proactive in fulfilling your duties and to seek legal advice if you encounter difficulties managing the estate or trust. They will protect you from these consequences.

How to Protect Yourself as an Executor or Trustee

For you to minimize the risk of disputes and potential legal issues, it’s essential to take specific steps when serving as an executor or trustee:

Stay organized: Keep detailed records of all financial transactions, including income, expenses, and distributions.
Communicate regularly: Provide beneficiaries with updates and accountings regularly
Follow the legal requirements: Make sure you understand California’s probate laws or trust laws and follow them meticulously.
Consult an attorney: Are you unsure about your responsibilities or face a complicated situation? It is best to consult an experienced attorney to help you meet your fiduciary obligations.

When to Consult a Trust and Probate Litigation Attorney

If you’re facing a dispute as an executor or trustee, seeking legal counsel early on is essential. A probate or trust litigation attorney can help resolve disagreements between beneficiaries, defend your actions if you’re accused of breaching your fiduciary duty, and protect your interests.

How an Attorney Can Help:

Advise on your fiduciary duties: A lawyer can guide you through your responsibilities and ensure compliance with California law.
Resolve disputes: Whether it’s a disagreement with beneficiaries or another fiduciary, an attorney can help mediate and resolve conflicts.
Defend against claims: An experienced attorney can help you navigate litigation and protect your assets if you are accused of breaching your duties.

Why Choose The Grossman Law Firm?

Serving as an executor or trustee is a serious responsibility. While the process may seem daunting, understanding your fiduciary duties as executors and trustees in California means taking steps to fulfill them carefully, which can help prevent disputes. This ensures that the wishes of your loved one are honored. Whether you need help navigating trust litigation or want to ensure you follow the law, The Grossman Law Firm is here to guide you through every step.

At The Grossman Law Firm, we’ve spent over two decades helping individuals and families navigate the complexities of trust and probate litigation in Southern California. Our compassionate approach ensures that we understand the emotional burden you’re carrying. At the same time, our expertise helps you confidently manage the legal challenges. If you find yourself in a dispute over fiduciary duties or need guidance on your responsibilities as an executor or trustee, we’re here to help.

Next Steps

To ensure they follow their fiduciary duties, check out our complete Overview of California Trust Litigation on our website. If you have more questions about your rights as a Beneficiary and what you should know moving forward.

Our law firm specializes in trust and probate law, and we are here to assist trustees in fulfilling their duties and navigating legal complexities.

Our law firm specializes in trust and probate law and is here to help you navigate these complex issues. Contact us today for a consultation. Let us assist you in ensuring your rights are upheld and your trust is managed prudently. Please call us at (888) 443-6590 or fill out our Get Help Now form below.