How do you get a private trustee to take action? A parent dies, one or more of the kids take over as trustee, and nothing happens. The assets of the Trust aren’t gathered together (called marshaling assets), notice is not given to the beneficiaries (as required under P.C. section 16061.7), beneficiaries are kept in the dark, real property is not sold and sometimes the trustee goes so far as to move into the property and live there rent free. It is a common occurence, and yet none of it is allowed under California Trust law; what is a beneficiary to do?
Under California law a trustee owes countless duties and obligations to the beneficiaries, and the beneficiaries owe no duties whatsoever to the trustee. The law presumes that trustees will discover what their duties are and then follow them. But for private individuals acting as trustee, they often make the mistake of believing that they can do whatever they want now that they are “in charge.” Not true. While parents who create a trust can do whatever they want (because as the settlors of the Trust they have that power), successor trustees are not so lucky. Successor trustees owe duties to the other beneficiaries and must act under the duties and obligations imposed on trustees.
Yet, individual trustees persist in not doing the right thing. So what is a beneficiary to do? Take action! Fortunately, beneficiaries have rights and those rights have to be asserted and enforced. Unfortunately, there is only one way to force a trustee to act, and that’s by going to court. But there are some steps you can take as a beneficiary before running to the courthouse.
For example, under Probate Code section 17200(b)(7), you are entitled to information regarding the Trust and its assets, and you are entitled to accountings every six months to one year. And the law requires that the demand for information and accountings both be submitted in writing to the Trustee. Once sent, the Trustee has 60 days in which to respond with the requested information. Thus, the first thing you should do is send the trustee your demand for information in writing. Since you can’t go to court without that demand having been made and giving the trustee 60 days to respond, you might as well start the clock now.
It makes no difference if the trustee responds. If the trustee gives you what you are asking for, great you just saved a trip to court. If the trustee ignores your request or does not provide you with sufficient information, now you’re ready to file in Court.
The bottom line: sometimes you have to stand up for your rights. Since private trustees don’t always understand the many duties they owe to their beneficiaries, and they don’t seem to have anyone educating them on those duties. That’s when a beneficiary may need to educate the trustee to ensure their rights are protected.