Code Section Group

Probate Code - PROB

DIVISION 9. TRUST LAW [15000 - 19530]

  ( Division 9 enacted by Stats. 1990, Ch. 79. )

PART 4. TRUST ADMINISTRATION [16000 - 16504]

  ( Part 4 enacted by Stats. 1990, Ch. 79. )

CHAPTER 4. Liability of Trustees to Beneficiaries [16400 - 16465]

  ( Chapter 4 enacted by Stats. 1990, Ch. 79. )

ARTICLE 1. Liability for Breach of Trust [16400 - 16403]
  ( Article 1 enacted by Stats. 1990, Ch. 79. )

16400.
  

A violation by the trustee of any duty that the trustee owes the beneficiary is a breach of trust.

(Enacted by Stats. 1990, Ch. 79.)

16401.
  

(a) Except as provided in subdivision (b), the trustee is not liable to the beneficiary for the acts or omissions of an agent.

(b) Under any of the circumstances described in this subdivision, the trustee is liable to the beneficiary for an act or omission of an agent employed by the trustee in the administration of the trust that would be a breach of the trust if committed by the trustee:

(1) Where the trustee directs the act of the agent.

(2) Where the trustee delegates to the agent the authority to perform an act that the trustee is under a duty not to delegate.

(3) Where the trustee does not use reasonable prudence in the selection of the agent or the retention of the agent selected by the trustee.

(4) Where the trustee does not periodically review the agent’s overall performance and compliance with the terms of the delegation.

(5) Where the trustee conceals the act of the agent.

(6) Where the trustee neglects to take reasonable steps to compel the agent to redress the wrong in a case where the trustee knows of the agent’s acts or omissions.

(c) The liability of a trustee for acts or omissions of agents that occurred before July 1, 1987, is governed by prior law and not by this section.

(Amended by Stats. 1995, Ch. 63, Sec. 9. Effective January 1, 1996.)

16402.
  

(a) Except as provided in subdivision (b), a trustee is not liable to the beneficiary for a breach of trust committed by a cotrustee.

(b) A trustee is liable to the beneficiary for a breach committed by a cotrustee under any of the following circumstances:

(1) Where the trustee participates in a breach of trust committed by the cotrustee.

(2) Where the trustee improperly delegates the administration of the trust to the cotrustee.

(3) Where the trustee approves, knowingly acquiesces in, or conceals a breach of trust committed by the cotrustee.

(4) Where the trustee negligently enables the cotrustee to commit a breach of trust.

(5) Where the trustee neglects to take reasonable steps to compel the cotrustee to redress a breach of trust in a case where the trustee knows or has information from which the trustee reasonably should have known of the breach.

(c) The liability of a trustee for acts or omissions of a cotrustee that occurred before July 1, 1987, is governed by prior law and not by this section.

(Enacted by Stats. 1990, Ch. 79.)

16403.
  

(a) Except as provided in subdivision (b), a successor trustee is not liable to the beneficiary for a breach of trust committed by a predecessor trustee.

(b) A successor trustee is liable to the beneficiary for breach of trust involving acts or omissions of a predecessor trustee in any of the following circumstances:

(1) Where the successor trustee knows or has information from which the successor trustee reasonably should have known of a situation constituting a breach of trust committed by the predecessor trustee and the successor trustee improperly permits it to continue.

(2) Where the successor trustee neglects to take reasonable steps to compel the predecessor trustee to deliver the trust property to the successor trustee.

(3) Where the successor trustee neglects to take reasonable steps to redress a breach of trust committed by the predecessor trustee in a case where the successor trustee knows or has information from which the successor trustee reasonably should have known of the predecessor trustee’s breach.

(c) The liability of a trustee for acts or omissions of a predecessor trustee that occurred before July 1, 1987, is governed by prior law and not by this section.

(Enacted by Stats. 1990, Ch. 79.)

PROBProbate Code - PROB1