What is a Trustee? California Trust Law Explained
Trustee Definition
A trustee is the person or institution responsible for managing a trust and its assets for the benefit of the beneficiaries. In California, trustees have strict legal duties called "fiduciary duties" that require them to act in the best interests of the beneficiaries, not themselves. If you've been named as a trustee, you have significant responsibilities and potential liability.
If you're involved with a California trust — whether you're creating one, have been named as trustee, or are a beneficiary — you need to understand what a trustee is and what they do.
I'm Rozsa Gyene, a California trust attorney with over 25 years of experience. In this guide, I'll explain exactly what a trustee is, what duties they have under California law, and what happens when trustees don't fulfill their obligations.
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What is a Trustee? Basic Definition
A trustee is the person or entity that holds legal title to trust assets and manages them according to the terms of the trust document. Think of it this way: when you create a trust, you're creating a legal "container" for your assets. The trustee is the person who manages that container.
To understand trustees, you need to understand the three key roles in any trust:
1. Trustor (also called Grantor or Settlor)
The person who creates the trust and transfers assets into it.
2. Trustee
The person who manages the trust assets according to the trust's terms.
3. Beneficiary
The person who benefits from the trust — who receives income or assets from it.
Key Insight: Overlapping Roles
With a California living trust, these roles often overlap. When you create a living trust, you're typically the trustor, the initial trustee, AND the beneficiary during your lifetime. You maintain complete control of your assets. But when you pass away or become incapacitated, your successor trustee takes over.
Types of Trustees in California
Individual Trustees
Most California family trusts name an individual as trustee — typically a spouse, adult child, or close family friend. Individual trustees don't charge fees (unless the trust specifically allows it) and know the family situation personally.
Downside: They may lack financial expertise and can be influenced by family dynamics.
Professional Trustees
Professional trustees — often banks, trust companies, or attorneys — manage trusts for a fee (typically 1-2% of trust assets annually). They offer expertise, neutrality, and continuity, but can be impersonal and expensive.
Best for: Large, complex trusts or situations with family conflict.
Co-Trustees
Some trusts name two or more people to serve together as co-trustees. This provides checks and balances but can create complications if co-trustees disagree.
Note: California law generally requires co-trustees to act unanimously unless the trust provides otherwise.
Successor Trustees
A successor trustee is the person who takes over when the original trustee can no longer serve — due to death, incapacity, or resignation.
Important: Every California living trust should name at least one successor trustee, and preferably multiple backups.
Trustee Duties Under California Law
California law imposes significant duties on trustees. These are called "fiduciary duties" — the highest standard of care the law recognizes. A trustee must always put the beneficiaries' interests ahead of their own.
Duty of Loyalty
The trustee must act solely in the interests of the beneficiaries. Self-dealing — where a trustee benefits personally from trust transactions — is strictly prohibited. For example, a trustee cannot buy trust property for themselves at a discount or use trust funds for personal purposes.
Duty to Administer the Trust
The trustee must actually manage the trust according to its terms and California law. This includes collecting trust assets, paying debts and taxes, making required distributions, and eventually distributing assets to beneficiaries.
Duty of Impartiality
If a trust has multiple beneficiaries, the trustee must treat them impartially. A trustee cannot favor one beneficiary over another unless the trust specifically allows it. This can be challenging when beneficiaries have competing interests — for example, a current income beneficiary versus a remainder beneficiary.
Duty of Prudent Investment
Under California's Uniform Prudent Investor Act, trustees must invest trust assets as a "prudent investor" would — considering the trust's purposes, beneficiaries' needs, and risk tolerance. This doesn't mean avoiding all risk, but it does mean making thoughtful, diversified investment decisions.
Duty to Keep Adequate Records
Trustees must keep detailed records of all trust transactions — income received, expenses paid, distributions made, and investments bought or sold. These records must be made available to beneficiaries upon reasonable request.
Duty to Inform and Report
California Probate Code Section 16061.7 requires trustees to notify beneficiaries when an irrevocable trust is created or becomes irrevocable (such as upon the trustor's death). Trustees must also provide accountings to beneficiaries who request them.
Duty Not to Delegate
While trustees can hire professionals (accountants, attorneys, investment advisors), they cannot delegate their core decision-making responsibilities. The trustee remains ultimately responsible for all trust decisions.
Fiduciary Duty is Serious
Breaching fiduciary duties can result in personal liability, removal as trustee, and even criminal charges in extreme cases. If you're serving as a trustee, take these duties seriously.
What Happens When a Trustee Breaches Their Duties?
When a trustee fails to fulfill their duties, beneficiaries can take action. California law provides several remedies:
- Accounting petition: Beneficiaries can petition the court to compel the trustee to provide a detailed accounting of all trust transactions.
- Trustee removal: The court can remove a trustee for breach of duty, incapacity, or other good cause.
- Surcharge: A trustee who causes financial harm to the trust can be ordered to repay the loss from their personal assets.
- Damages: In cases of intentional wrongdoing, beneficiaries may recover additional damages beyond the actual loss.
Are You a Beneficiary With Concerns?
If you believe a trustee is mismanaging a trust or breaching their duties, consult with a trust litigation attorney promptly. There are time limits for taking legal action, and evidence can be lost if you wait too long.
What to Do If You've Been Named as Trustee
Being named as trustee is an honor — it means someone trusts you to manage their legacy. But it's also a serious responsibility with potential legal liability. Here's what to do:
- Read the trust document carefully: Understand exactly what the trust requires you to do.
- Gather information: Locate all trust assets, debts, and important documents.
- Open a trust bank account: Never mix trust funds with your personal funds.
- Send required notices: California law requires you to notify beneficiaries and heirs within 60 days.
- Consult a trust attorney: Even for simple trusts, getting professional guidance can prevent costly mistakes.
Need Help as a Trustee?
Serving as trustee can be overwhelming. I help trustees understand their duties, avoid liability, and administer trusts correctly.
Frequently Asked Questions About Trustees
Can a trustee also be a beneficiary?
Yes. In fact, with most California living trusts, the trustor serves as trustee and beneficiary during their lifetime. Adult children are often named as both successor trustees and beneficiaries. While this is allowed, it creates potential conflicts of interest that the trustee must navigate carefully.
Do trustees get paid?
It depends on the trust. Professional trustees charge fees. Individual trustees (like family members) often serve without compensation, though the trust document may allow "reasonable compensation." California Probate Code provides guidelines for trustee compensation if the trust is silent on the issue.
Can a trustee be held personally liable?
Yes. If a trustee breaches their fiduciary duties — through negligence, mismanagement, or intentional wrongdoing — they can be held personally liable for any resulting losses. This is why serving as trustee is a serious responsibility.
Can a trustee be removed?
Yes. A California court can remove a trustee for breach of trust, incapacity, unfitness, or failure to act. Beneficiaries can also petition for removal if the trustee commits serious violations of their duties.
What's the difference between a trustee and an executor?
A trustee manages a trust. An executor (also called a "personal representative") manages a probate estate. If someone dies with a will but no trust, their estate goes through probate and an executor is appointed to handle it. If they have a trust, the trustee handles the trust assets outside of probate.
Need Help With Trust Administration in California?
Whether you're creating a trust and need to choose a trustee, you've been named as trustee and need guidance, or you're a beneficiary with concerns about a trustee's actions — I can help.
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Rozsa Gyene, Esq. — California State Bar #208356
25+ Years of California Trust Law Experience
Phone: (818) 291-6217
Office: 450 N Brand Blvd, Suite 600, Glendale, CA 91203
Services: Living Trusts • Trust Administration • Trustee Guidance • Beneficiary Representation
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Start Your Trust - From $400Key Takeaways: What is a Trustee?
- A trustee manages trust assets for the benefit of beneficiaries
- Three key trust roles: Trustor (creates it), Trustee (manages it), Beneficiary (benefits from it)
- Trustees have fiduciary duties — the highest legal standard of care
- Key duties include: loyalty, impartiality, prudent investment, record-keeping, and reporting
- Trustees can be held personally liable for breaching their duties
- Always name successor trustees to take over if the primary trustee can't serve
- If named as trustee: read the trust, keep records, don't mix funds, and consider getting legal help
