Key Takeaways

• A trustee or executor is a fiduciary — legally bound to act with loyalty, care, and in the beneficiaries’ interest.
• A breach happens when they self-deal, mismanage or waste assets, favor one beneficiary, fail to account, or otherwise violate their duties.
• Beneficiaries can petition the court to compel an accounting, surcharge the fiduciary (hold them personally liable), remove them, and recover losses.
• In serious cases the fiduciary may owe the lost value, lost profits, and interest — and sometimes more.
• These are among the most consequential probate and trust disputes, with real recovery available for genuine wrongs.

What a Fiduciary Owes

Trustees and executors occupy a position of trust. The law calls them fiduciaries, and it holds them to the highest standard it recognizes outside a few special relationships. A fiduciary must put the beneficiaries’ interests first, manage the assets with care, stay loyal, treat beneficiaries fairly, keep good records, and account for everything they do. They’re handling someone else’s money and property, and the law expects them to do it as carefully as a prudent person would manage another’s affairs — not their own convenience.

When a fiduciary falls short, the consequences are serious, because the breach of trust harms people who were depending on them. California gives beneficiaries real tools to respond, and real remedies to recover what was lost.

The Core Fiduciary Duties

A trustee’s or executor’s duties include:

• Loyalty. Act solely in the beneficiaries’ interest — no using the position for personal gain.
• Avoiding self-dealing and conflicts. Don’t buy estate or trust assets for yourself, lend to yourself, or put your interests against the beneficiaries’ without proper authority.
• Care and prudence. Manage and invest the assets the way a prudent person would, protecting them from loss.
• Impartiality. Treat beneficiaries even-handedly; don’t favor one over another (such as a remainder beneficiary over an income beneficiary, or one sibling over the rest).
• Keeping assets safe and separate. Don’t commingle trust or estate property with personal property.
• Informing and accounting. Keep beneficiaries reasonably informed and provide the accountings the law requires.

These duties are the yardstick. A breach is simply a violation of one or more of them, and most disputes come down to showing which duty was broken and what it cost.

What a Breach Looks Like

In practice, fiduciary breaches tend to recur in recognizable patterns:

• Self-dealing — selling trust property to themselves or an associate below value, paying themselves improper fees, using estate funds personally.
• Mismanagement or waste — letting property deteriorate, making reckless or negligent investments, failing to collect what’s owed, leaving assets unprotected.
• Favoritism — steering benefits to themselves or a favored beneficiary at others’ expense.
• Failure to account or inform — refusing to provide accountings, hiding transactions, stonewalling beneficiaries’ reasonable requests.
• Commingling — mixing trust or estate funds with their own, making it impossible to track what happened.
• Unreasonable delay — sitting on the administration, withholding distributions without justification.

Not every mistake is a breach — fiduciaries are allowed to be human, and the law gives some room for honest, reasonable judgment. But a pattern of misconduct, a clear conflict, or a serious lapse crosses the line.

Suspect a trustee or executor is mishandling assets or hiding the ball? Beneficiaries have stronger rights than they often realize. Bay Legal handles fiduciary-breach matters in California. For guidance on your specific situation, call (650) 668-8000 or schedule a consultation at baylegal.com/contact.

The Remedies — What Beneficiaries Can Recover

This is where fiduciary law has teeth. When a beneficiary proves a breach, the court can:

• Surcharge the fiduciary — hold them personally liable for the loss in value the breach caused.
• Make them give up improper gains — disgorge any profit they made through the breach.
• Recover lost profits — what the estate or trust would have earned but for the breach.
• Charge interest on the amounts owed.
• Remove the fiduciary and appoint a replacement.
• Deny or reduce their compensation, and in some cases order them to pay attorney fees.

In short, a fiduciary who breaches can be made to restore the estate or trust to where it should have been — out of their own pocket. For egregious conduct, especially involving an elder, additional remedies may apply (see our guide on financial elder abuse and Probate Code section 859, which can mean double damages). The combination of removal plus surcharge is the standard one-two punch: stop the harm and recover the loss.

Proving a Breach

Fiduciary cases are won on records and reconstruction. Building one typically means:

• Getting an accounting — often the first step is a petition to compel the fiduciary to account, which forces the transactions into the open.
• Tracing the assets — following the money to show what happened versus what should have.
• Documenting the duty and the breach — establishing what the fiduciary was required to do and how they deviated.
• Quantifying the loss — proving the dollar harm, including lost value and lost profits.

The accounting is frequently the key that unlocks the case: a fiduciary who’s been hiding misconduct often can’t withstand a court-ordered, line-by-line accounting. That’s why a refusal to account is both a breach in itself and a major red flag.

An accounting is often the first move that breaks a fiduciary-breach case open. If a trustee or executor won’t account, Bay Legal can help you compel one and pursue recovery. For guidance on your specific situation, call (650) 668-8000 or schedule a consultation at baylegal.com/contact.

How This Fits With the Rest of Probate

Breach of fiduciary duty is the engine behind executor removal and the surcharge remedy, and it overlaps heavily with financial elder abuse claims and sibling disputes over a trust or estate. It applies to both executors (in probate) and trustees (in trust administration). For the broader litigation context, see contested probate and our complete guide to California probate.

Frequently Asked Questions

What is breach of fiduciary duty by a trustee or executor?

It’s a violation of the legal duties a trustee or executor owes — loyalty, care, impartiality, avoiding self-dealing, and accounting. Common breaches include self-dealing, mismanagement, favoritism, and refusing to account.

Can you sue a trustee or executor in California?

Yes. A beneficiary can petition the court to compel an accounting, surcharge the fiduciary for losses, remove them, and recover improper gains and lost profits with interest.

What does it mean to surcharge a fiduciary?

To hold them personally liable for the loss their breach caused — ordering them to repay the estate or trust from their own funds, sometimes with interest and reduced or denied compensation.

What can a beneficiary recover for a breach?

The lost value caused by the breach, any profit the fiduciary made improperly, lost profits the estate or trust should have earned, and interest. In elder-abuse cases, additional remedies including double damages may apply.

How do you prove a trustee mishandled a trust?

Usually by compelling an accounting, tracing the assets to show what happened versus what should have, documenting the breach, and quantifying the loss. A refusal to account is itself a breach and a warning sign.