BREACH OF DUTIES BY TRUSTEE
A breach of trust is defined as a violation by the trustee of any duty that the trustee owes a beneficiary. To be liable for breach of trust, a trustee must be personally at fault. To prove breach of trust against the trustee, the beneficiary must show the breach was (1) in bad faith, (2) knowingly but in good faith, or (3) negligently.
Whether trustee has breached his or her duties is determined by the trust instrument. Deviation from the terms of the trust, absent a sufficient excuse, is a breach of trust.
Generally, trustee has the following duties:
1. Duty to review trust terms and comply with the terms. Trustee may deviate from the terms of trust if there is change in circumstances.
2. Duty of loyalty. The trustee has a duty always to consider and act in the best interest of the trust.
3. Duty to avoid conflict of interest. The trustee may not deal with himself or herself in any transaction in his or her individual capacity. This includes obtaining a loan from the trust.
4. Duty of impartiality. The trustee must consider the different interests of beneficiaries. However, the trustee must deal impartially with all beneficiaries of a trust, and must act impartially in investing and managing trust property.
5. Duty to disclose. The trustee is obligated to reasonably inform the beneficiaries of trust of the action taken by the trustee in administration of trust.
6. Duty not to delegate. Trustee should not delegate any act that trustee could reasonably perform himself or herself.
7. Duty to keep the trust assets separate.
8. Duty to enforce or defend claims.
Breach of any duty by the trustee is actionable by the affected beneficiary. A beneficiary of trust may bring the following actions against the trustee:
1. Compel or enjoin the trustee from breaching the trust.
2. Compel the trustee to compensate for a breach.
3. Appoint a receiver or temporary trustee.
4. Remove the trustee.
5. Set aside acts of the trustee.
6. Reduce or deny compensation of the trustee.
7. Impose an equitable lien or a constructive trust on trust property.
8. Trace and recover trust property that has been wrongfully disposed of.
The statute of limitations to file a lawsuit against the trustee is generally three years. However, other factors may affect the statute of limitations.
For more information call us at (310)553-5562.
A breach of trust is defined as a violation by the trustee of any duty that the trustee owes a beneficiary. To be liable for breach of trust, a trustee must be personally at fault. To prove breach of trust against the trustee, the beneficiary must show the breach was (1) in bad faith, (2) knowingly but in good faith, or (3) negligently.
Whether trustee has breached his or her duties is determined by the trust instrument. Deviation from the terms of the trust, absent a sufficient excuse, is a breach of trust.
Generally, trustee has the following duties:
1. Duty to review trust terms and comply with the terms. Trustee may deviate from the terms of trust if there is change in circumstances.
2. Duty of loyalty. The trustee has a duty always to consider and act in the best interest of the trust.
3. Duty to avoid conflict of interest. The trustee may not deal with himself or herself in any transaction in his or her individual capacity. This includes obtaining a loan from the trust.
4. Duty of impartiality. The trustee must consider the different interests of beneficiaries. However, the trustee must deal impartially with all beneficiaries of a trust, and must act impartially in investing and managing trust property.
5. Duty to disclose. The trustee is obligated to reasonably inform the beneficiaries of trust of the action taken by the trustee in administration of trust.
6. Duty not to delegate. Trustee should not delegate any act that trustee could reasonably perform himself or herself.
7. Duty to keep the trust assets separate.
8. Duty to enforce or defend claims.
Breach of any duty by the trustee is actionable by the affected beneficiary. A beneficiary of trust may bring the following actions against the trustee:
1. Compel or enjoin the trustee from breaching the trust.
2. Compel the trustee to compensate for a breach.
3. Appoint a receiver or temporary trustee.
4. Remove the trustee.
5. Set aside acts of the trustee.
6. Reduce or deny compensation of the trustee.
7. Impose an equitable lien or a constructive trust on trust property.
8. Trace and recover trust property that has been wrongfully disposed of.
The statute of limitations to file a lawsuit against the trustee is generally three years. However, other factors may affect the statute of limitations.
For more information call us at (310)553-5562.