- The duty of impartiality: Is your Trustee treating you equally?
Imagine a world where a Trustee treats each of the Trust beneficiaries equally. That is supposed to be the world we live in for ALL California Trust matters (California Probate Code section 16003), but it does not always work that way. All too often a Trustee will decide to treat some beneficiaries differently than others. For example, a beneficiary who complains may be treated more poorly than the other beneficiaries who keep quiet. If the Trustee is a sibling, then inequality can run rampant based on sibling rivalry alone.
When beneficiaries have disagreements among themselves, the Trustee is supposed to take a neutral stance and not advocate one beneficiary’s position over the others. There are some Trustees, however, who just can’t resist joining the fight.
Treating all of the beneficiaries equally is not always an easy task. This is especially true when you have more than a couple beneficiaries. The more people involved, the more disparate viewpoints you have. That means more chances for disagreements with the Trustee. When family, money, and heirlooms are at stake, things can get out-of-hand quickly.
- What’s a Trustee to do?
For Trustees, it takes a good deal of patience. You need to slow down and do things the right way. Start with full disclosure and transparency. If you have conflicting viewpoints, then let the beneficiaries know the problem and ask for their input. The Trustee ultimately makes the call, but asking for advice and consent of the beneficiaries never hurts. It makes the beneficiaries feel involved and they just might come up with a workable solution.
If that does not work, then seek the court’s help. Trustees are allowed to petition the court for instructions on what to do. When a Trustee cannot act for fear of disfavoring one of the beneficiaries, the court can intervene and make the decision instead. This process allows each of the beneficiaries to weigh in with their thoughts and arguments on the issue. And the Trustee can remain neutral and allow the process to guide the way.
- What’s a beneficiary to do?
For beneficiaries, you have no control over a Trustee. The only way to force a Trustee to behave is to seek court assistance. Beneficiaries have the right to petition the court for instructions to the Trustee. This process allows the court to review the issue and then order the Trustee to act, or not act, based on the evidence presented.
In the worst of cases, the Trustee can be removed and a new Trustee appointed who can act with the proper impartiality in mind.
With the court’s help, the duty of impartiality can be successfully navigated in nearly any Trust matter.