MBE Rules · Wills, Trusts & Estates
Trustee's Fiduciary Duties
Cal. Prob. Code §§ 16000-16015
The rule
A trustee owes duties of loyalty, prudent administration, impartiality among beneficiaries, to make trust property productive, to control and preserve trust property, to keep beneficiaries reasonably informed, and to avoid self-dealing absent express authorization or informed consent.
In plain English
A trustee has a legal obligation to act in the best interests of the trust and its beneficiaries. This includes managing the trust property wisely, treating all beneficiaries fairly, keeping them informed, and avoiding any conflicts of interest unless they have permission to do so.
Worked example
Alice is the trustee of her late father's trust, which benefits her and her two siblings. Instead of investing the trust funds in a diversified portfolio, she uses the money to start her own business, which she has not disclosed to her siblings. This self-dealing violates her fiduciary duties, and her siblings can seek removal of Alice as trustee and damages.
Memory hook
Trustees must put the trust first—no self-dealing, just loyalty!
The trap
Exams may present scenarios where a trustee appears to act in their own interest, leading students to overlook the requirement for informed consent or express authorization.
How examiners test it
Questions often test the boundaries of a trustee's duties by presenting fact patterns that involve potential conflicts of interest or mismanagement of trust assets.
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More Wills, Trusts & Estates rules
- Co-Trustees · Cal. Prob. Code § 15620
- Trustee Removal · Cal. Prob. Code § 15642
- Formal Will Requirements · Cal. Prob. Code § 6110
- Spendthrift Exceptions · Cal. Prob. Code §§ 15305-15307
- Ademption of Specific Devises · In re Estate of Newsome (1967) 248 Cal.App.2d 712
- Intestate Succession · Cal. Prob. Code §§ 6400-6414