There are several options to ensure your assets and property are protected both throughout your life and when you die. Along with estate planning and probate, setting up a trust is one of these options. Trustees, who are responsible for administering and managing trusts, have a broad array of rights and responsibilities. However, can a trustee remove a beneficiary from a trust in California?

Most people may understand the need to draft a will, but not many know the full scope of establishing, managing, and administering a trust. While setting up a trust is an invaluable option for ensuring loved ones are provided for, it can be a complicated process. Hiring a Carlsbad trust administration attorney, like Paul V.L. Campo Attorney at Law, can mitigate the stress of the process for all involved.

California Trust Laws

A trust is a form of estate planning that involves one person entrusting another with managing and administering the assets and property of their estate. There are two types of trusts: irrevocable and revocable. Irrevocable trusts cannot be changed once they are set up. Contrarily, revocable trusts may be altered to provide settlors or trustors more control.

The laws surrounding creating and validating trusts in California are outlined in California Probate Codes 15000-19530. Some major components of the laws include the rules for establishing a trust, including that a trust may only be set up if there is trust property and beneficiaries, as well as rules for terminating trusts.

Who Are the Stakeholders in a Trust?

To understand trust, it is important to know all parties involved in the process. The trustor, or settlor, is the person who funds the trust. The trustee is responsible for administering and managing the trust, and the beneficiaries receive the funds and/or property within it. Beneficiaries may be both people and pets, and a trustee may be a family member, a trusted friend, or even a bank. In some cases, a group of people may be trustees.

Can a Trustee Remove a Beneficiary From a Trust?

The trustee is perhaps the most integral part of the trust process since they have the fiduciary duty to administer and manage the trust according to the settlor’s wishes. In fact, they are legally obligated to fulfill certain responsibilities pursuant to California Probate Codes 16000-16015. Some of those responsibilities include:

• Administering the trust according to the settlor’s wishes
• Administering the trust in the best interest of the beneficiaries
• Being impartial in managing the trust
• Avoiding any conflicts of interest in managing and administering trusts
• Defending and protecting the trust

These are just some of the roughly 15 duties of trustees. Trustees also have certain powers as outlined in CA Probate Codes 16200-16249, including the power to accept additional property of the trust, deposit trust funds into certain financial institutions, make certain approved changes to the trust, and even borrow money from the trust for specific purposes.

With all of the powers a trustee has, they do not have the power to remove a beneficiary from a trust. Once the settlor names beneficiaries, only they can change them, not the trustee. There are generally only two exceptions to this rule: the trustee is also the settlor, or the person who set up the trust, or the settlor created a specific provision that allows the trustee to make changes to beneficiaries.

Hiring a Trust Lawyer

There are many benefits to setting up a trust, with the most common benefit being avoiding probate. In California, your estate may only avoid probate if you have assets and property valued under $166,250 unless you set up a trust – with certain exceptions. Since the median owner-occupied housing value in California is $695,400 as of 2023, many Californians may benefit from establishing a trust to ensure their descendants or loved ones are taken care of.

If you are a trustee, it is recommended that you hire a lawyer to ensure you are fulfilling your duties appropriately and lawfully. Any mismanagement, errors in judgment, or legal mistakes in administering or managing a trust can lead to significant consequences. It is better to be on the safe side and ensure you understand the complexities of California’s trust laws.

FAQs

Q: Can a Trustee Remove Beneficiaries From a Trust?

A: In short, no, a trustee cannot remove beneficiaries from a trust. Once the trustor or settlor establishes the trust and names the trustee(s) and beneficiaries, this typically cannot be altered. However, there are two main exceptions: if there are specific provisions that outline that the beneficiaries can be removed, or if the settlor is also the trustee and removes beneficiaries.

Q: Can a Trustee Evict a Beneficiary in California?

A: A trustee may have the legal power to evict a beneficiary from a property in California. A trustee may have the power to sell real property if this is outlined in the trust agreement. Considering this, the trustee may also have the right to evict any tenants in the property, including beneficiaries, in order to sell the property according to the settlor’s wishes.

Q: Who Has More Power: a Trustee or a Beneficiary?

A: Generally, a trustee has more power over the trust in terms of management and administration. However, their purpose is ultimately to serve in the best interest of the beneficiaries and per the wishes of the settlor. Therefore, even though the trustee holds more power, they also have a lot of responsibilities.

Q: What Are the Grounds for Removal of Trustees in California?

A: There are several grounds for the removal of trustees in California. A trust is a legal agreement with legal obligations pursuant to California law. Therefore, any unlawful activity executed by the trustee may be grounds for removal. Specific examples include any breaches of trust, unfit, hostile, or uncooperative behavior, or if the trustee refuses to fulfill their duties.

Trust Lawyers With Years of Experience

Being a trustee is a serious role with a range of duties and powers. Internalizing the legal obligations for establishing a trust can be overwhelming, and this is where Paul V.L. Campo Attorney at Law comes in. We can help ensure you fully understand your obligations and fulfill your duties with integrity. Contact us today for a pain-free consultation and learn more about how we can help you.