As lawyers for trustees, we are often asked to interpret facts involving duties of a trustee or executor in Los Angeles, Ca. Trustees can make mistakes which are avoidable with proper legal advice. There are many nuances of law, and funding of the trust which require close attention to the trust document, which can make the process of trust distributions a smooth transaction.
OBLIGATIONS, DUTIES AND RESPONSIBILITIES OF TRUSTEES IN CALIFORNIA
16000. On acceptance of the trust, the trustee has a duty to administer the trust according to the trust instrument and, except to the extent the trust instrument provides otherwise, according to this division.
16001. (a) Except as provided in subdivision (b), the trustee of a revocable trust shall follow any written direction acceptable to the trustee given from time to time (1) by the person then having the power to revoke the trust or the part thereof with respect to which the direction is given or (2) by the person to whom the settlor delegates the right to direct the trustee. (b) If a written direction given under subdivision (a) would have the effect of modifying the trust, the trustee has no duty to follow the direction unless it complies with the requirements for modifying the trust.
16002. (a) The trustee has a duty to administer the trust solely in the interest of the beneficiaries. (b) It is not a violation of the duty provided in subdivision (a) for a trustee who administers two trusts to sell, exchange, or participate in the sale or exchange of trust property between the trusts, if both of the following requirements are met: (1) The sale or exchange is fair and reasonable with respect to the beneficiaries of both trusts. (2) The trustee gives to the beneficiaries of both trusts notice of all material facts related to the sale or exchange that the trustee knows or should know.
16003. If a trust has two or more beneficiaries, the trustee has a duty to deal impartially with them and shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries.
16004. (a) The trustee has a duty not to use or deal with trust property for the trustee's own profit or for any other purpose unconnected with the trust, nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary. (b) The trustee may not enforce any claim against the trust property that the trustee purchased after or in contemplation of appointment as trustee, but the court may allow the trustee to be reimbursed from trust property the amount that the trustee paid in good faith for the claim. (c) A transaction between the trustee and a beneficiary which occurs during the existence of the trust or while the trustee's influence with the beneficiary remains and by which the trustee obtains an advantage from the beneficiary is presumed to be a violation of the trustee's fiduciary duties. This presumption is a presumption affecting the burden of proof. This subdivision does not apply to the provisions of an agreement between a trustee and a beneficiary relating to the hiring or compensation of the trustee.
16004.5. (a) A trustee may not require a beneficiary to relieve the trustee of liability as a condition for making a distribution or payment to, or for the benefit of, the beneficiary, if the distribution or payment is required by the trust instrument. (b) This section may not be construed as affecting the trustee's right to: (1) Maintain a reserve for reasonably anticipated expenses, including, but not limited to, taxes, debts, trustee and accounting fees, and costs and expenses of administration. (2) Seek a voluntary release or discharge of a trustee's liability from the beneficiary. (3) Require indemnification against a claim by a person or entity, other than a beneficiary referred to in subdivision (a), which may reasonably arise as a result of the distribution. (4) Withhold any portion of an otherwise required distribution that is reasonably in dispute. (5) Seek court or beneficiary approval of an accounting of trust activities.
16005. The trustee of one trust has a duty not to knowingly become a trustee of another trust adverse in its nature to the interest of the beneficiary of the first trust, and a duty to eliminate the conflict or resign as trustee when the conflict is discovered.
16006. The trustee has a duty to take reasonable steps under the circumstances to take and keep control of and to preserve the trust property.
16007. The trustee has a duty to make the trust property productive under the circumstances and in furtherance of the purposes of the trust.
16009. The trustee has a duty to do the following: (a) To keep the trust property separate from other property not subject to the trust. (b) To see that the trust property is designated as property of the trust.
16010. The trustee has a duty to take reasonable steps to enforce claims that are part of the trust property.
16011. The trustee has a duty to take reasonable steps to defend actions that may result in a loss to the trust.
16012. (a) The trustee has a duty not to delegate to others the performance of acts that the trustee can reasonably be required personally to perform and may not transfer the office of trustee to another person nor delegate the entire administration of the trust to a cotrustee or other person. (b) In a case where a trustee has properly delegated a matter to an agent, cotrustee, or other person, the trustee has a duty to exercise general supervision over the person performing the delegated matter. (c) This section does not apply to investment and management functions under Section 16052.
16013. If a trust has more than one trustee, each trustee has a duty to do the following: (a) To participate in the administration of the trust. (b) To take reasonable steps to prevent a cotrustee from committing a breach of trust or to compel a cotrustee to redress a breach of trust.
16014. (a) The trustee has a duty to apply the full extent of the trustee's skills. (b) If the settlor, in selecting the trustee, has relied on the trustee's representation of having special skills, the trustee is held to the standard of the skills represented.
16015. The provision of services for compensation by a regulated financial institution or its affiliates in the ordinary course of business either to a trust of which it also acts as trustee or to a person dealing with the trust is not a violation of the duty provided in Section 16002 or 16004. For the purposes of this section, "affiliate" means a corporation that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another domestic or foreign corporation.
Often, trustees are questioned by the beneficiaries regarding their duties. As a trustee, you can retain us to consult with you regarding specific duties. Where there are doubts about interpretation of a duty, we can petition the court for instructions to the trustee.
The attorneys at Sirkin Law Group, P.C. have been advising trustees and other fiduciaries since 1992. Contact us at 818.340.4479 or 800.300.9977. We serve all of Los Angeles County and advise trustees throughout the United States relating to duties of a trustee in California. Our offices are located in Los Angeles, Woodland Hills, Glendale, West Los Angeles, Pasadena and Irvine. Lawyers for Trustees Los Angeles Ca.
West Los Angeles Office Address: 11400 W. Olympic Blvd. #200, Los Angeles, CA 90064.
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