What is a Trustee?

A trustee is the person or institution responsible for managing a trust according to its terms and in the best interest of the people the trust was created to benefit. When someone creates a trust, they may name themselves as the initial trustee, with a successor trustee designated to step in if they become incapacitated or die. That responsibility has significant legal obligations. What a trustee does and what happens when they fall short matters whether you are creating a trust, named as a trustee, or a beneficiary waiting on distributions.

Trustee Duties and Responsibilities

A trustee’s primary job is to administer the trust according to its terms while acting in the best interest of the beneficiaries at all times. In California, trustees are held to specific standards under California Probate Code § 16000, which establishes the duty to administer the trust according to its terms from the moment a trustee accepts the role.

A trustee is a fiduciary, meaning the law imposes a heightened duty of loyalty and care that goes beyond ordinary business obligations. That relationship requires the trustee to place the interests of the beneficiaries above their own at every stage of the process. Trustee duties include:

• Loyalty: Acting solely in the interest of the beneficiaries and avoiding conflicts of interest or self-dealing.
• Prudent administration: Managing trust assets with the care a reasonably prudent person would apply to their own financial affairs.
• Impartiality: Balancing the interests of all beneficiaries fairly, including both current and future beneficiaries.
• Accounting: Providing beneficiaries with regular accountings that document trust assets, income, expenses, and distributions.
• Communication: Keeping beneficiaries reasonably informed about the trust and its administration.
• Preservation of assets: Protecting trust property from loss, waste, or unnecessary risk.

These duties are not optional, and a trustee who ignores them, even unintentionally, can be held personally responsible for the consequences. This is a core aspect of trust administration in California. 

Types of Trustees

Not every trustee looks the same, and the right choice depends on the size and complexity of the trust, the nature of the assets, and the relationships involved. There are four common types of trustees, each with distinct advantages and limitations depending on the situation.

Individual Trustee 

An individual trustee is typically a family member, close friend, or trusted advisor named by the person who created the trust. Individual trustees are common in family trusts, but the role carries more responsibility than many people expect, particularly when it comes to record-keeping, tax filings, and communication with beneficiaries.

Professional Trustee 

A professional trustee is an individual, such as an attorney or financial advisor, who serves in the trustee role on a paid basis. Professional trustees bring expertise to complex estates but may not have the personal connection to the family that an individual trustee would.

Corporate Trustee 

A corporate trustee is a bank or trust company that offers institutional trust administration services. Corporate trustees are well-suited to large or long-term trusts that require consistent, professional management across generations, though they can be less flexible than individual trustees in responding to a family’s specific needs.

Successor Trustee 

A successor trustee steps in when the original trustee passes away, becomes incapacitated, or resigns. Most trusts name a successor trustee in the trust document itself to avoid court involvement when a transition becomes necessary, and estate planning attorneys in San Diego consistently recommend naming at least one successor when the trust is created.

How to Choose a Trustee

The right trustee should be someone you trust completely with your family’s finances, who has the time and willingness to take on the role, and who can communicate clearly with beneficiaries. A successor trustee does not need to be a financial expert, but they should be organized, dependable, and able to make sound decisions under pressure. Many California families name an adult child or close family member as successor trustee, with a professional trustee named as backup.

Are Trustees Paid for Their Work?

Yes. Under California Probate Code § 15680, a trustee is entitled to reasonable compensation for their services unless the trust document states otherwise. For professional or corporate trustees, fees are typically calculated as a percentage of trust assets. For family members serving as trustee, compensation is less common but permitted.

What a Trustee Cannot Do

Just as important as knowing what a trustee must do is knowing what a trustee is prohibited from doing. California law imposes strict limits on trustee conduct, and violations can result in removal, surcharge, or other court-ordered consequences. A trustee who crosses these lines, even with good intentions, can be held personally liable for harm caused to the trust.

Prohibited conduct includes the following:

• Self-dealing: Borrowing from the trust, purchasing trust assets at below-market prices, or entering transactions where the trustee personally benefits.
• Favoritism: Treating one beneficiary more favorably than others without authorization in the trust document.
• Improper delegation: Handing off decision-making responsibilities that the trustee is required to handle personally, even when outside professionals are involved.
• Commingling funds: Mixing trust assets with the trustee’s personal finances in any form.
• Withholding information: Refusing to provide accountings or keeping beneficiaries in the dark about trust activity.

A trustee also cannot act outside the scope of authority granted by the trust document itself, even if they believe their actions would benefit the trust. The terms of the trust are set out ahead of time, and the trustee must follow them to the letter. 

The Difference Between a Trustee and an Executor

A trustee and an executor are both fiduciaries, but they serve different functions. An executor is appointed to administer a deceased person’s estate through the probate process, paying debts and distributing assets according to the will. A trustee manages assets held in a trust, which may continue operating for years or even decades after the person who created it has passed away.

Some people serve as both the executor of an estate and the trustee of a trust created by the same person, which can create overlap and complexity in how the two roles interact. Whoever steps into either position should know where each role begins and ends, and an attorney familiar with California trust and estate law can help clarify the specific responsibilities in a given situation.

When Trustee Issues Arise

Trustee disputes are more common than most people expect, and California law provides specific remedies when a trustee breaches their duties. Even well-intentioned trustees can find themselves in conflict with beneficiaries. Disputes often arise over the timing of distributions, investment decisions, accountings that beneficiaries find incomplete, or conduct that appears to favor one beneficiary over others.

When a trustee breaches their duties, the court can order remedies that may include compelling the trustee to perform their obligations, suspending or removing the trustee, requiring the trustee to restore assets lost through a breach, and appointing a temporary trustee to protect the trust while the matter is resolved. 

Beneficiaries who believe a trustee is mismanaging a trust have the right to petition the court for relief, and trustees facing claims have the right to defend their conduct. Trust administration has legal requirements that are difficult to manage without guidance, whether you are the trustee or a beneficiary with concerns, and mistakes can be costly for everyone involved.

Talk to a San Diego Trust Attorney at Frisella Neilson, APC

If you have questions about trustee responsibilities, trust administration, or a dispute involving a trust, our attorneys at Frisella Neilson, APC, including Lisa J. Frisella, are available to help. Based in San Diego, our trust attorneys focus on trust and estate matters for clients throughout California. Contact us online or call (619) 260-3500 to speak with our team.