Breach of Fiduciary Duty vs. Negligence: Understanding the Legal Implications for Trustees
When it comes to trustee conduct, distinguishing a breach of fiduciary duty from negligence can determine whether a trustee remains in place, faces personal liability, or causes irreversible harm to beneficiaries. Each carries its own legal standard and consequence, and understanding the distinction helps families and fiduciaries alike protect their rights and responsibilities.
At Bochnewich Law Offices, we’ve represented countless clients in trust & estate litigation and understand how subtle differences between legal concepts can dramatically shift the direction of a case. Our experienced attorneys make sure that every detail is carefully considered to protect your interests. Our clients are typically based in Southern California, including Riverside County, Los Angeles County, San Bernardino County, Orange County, and San Diego County.
What Trustees Are Obligated to Do
When someone accepts the role of trustee, they accept a legal duty to act in the best interests of the trust beneficiaries. That duty includes loyalty, prudence, impartiality, and accountability. Fiduciary relationships are based on trust, and trustees are held to a higher legal standard than ordinary individuals managing property.
Core fiduciary duties include:
Duty of loyalty: Trustees must act for the benefit of the beneficiaries, not themselves.
Duty of care: Trustees must manage trust assets with reasonable care and skill.
Duty of impartiality: Trustees must treat all beneficiaries fairly, unless the trust provides otherwise.
Duty to account: Trustees must keep accurate records and inform beneficiaries of the trust’s performance.
When trustees violate one or more of these duties, it may rise to the level of a breach, opening the door to trust & estate litigation.
What Qualifies as a Breach of Fiduciary Duty
A breach occurs when a trustee's conduct violates one or more fiduciary obligations in a way that causes harm to the trust or its beneficiaries. These breaches are often intentional or reckless acts that show disregard for the trustee’s responsibilities.
Common examples of fiduciary breaches include:
Self-dealing: Using trust property for personal gain.
Failing to act: Refusing to make required distributions or ignoring trust terms.
Conflicts of interest: Making decisions that favor one beneficiary or outside party.
Failing to invest prudently: Making risky or unsuitable investments.
Withholding information: Refusing to share reports or accountings with beneficiaries.
When breaches are proven, courts may order removal, restitution, or even impose personal liability. As a firm experienced in trust & estate litigation, we carefully assess the facts and determine whether a breach has occurred based on evidence and case law.
A Different Legal Threshold
Negligence is a failure to use reasonable care, resulting in unintended harm. Unlike a fiduciary breach, which often involves a willful act or omission, trustee negligence may stem from oversight or misunderstanding.
For example, a trustee may accidentally:
Miss a filing deadline: Failing to file taxes on time due to lack of attention.
Overlook key trust provisions: Misinterpreting unclear language.
Rely on poor advice: Trusting an unqualified financial advisor without verifying their work.
These actions may still result in financial damage, but they lack the intentional wrongdoing found in a breach. Still, negligence can lead to removal or reimbursement if the trustee's conduct caused loss to the trust.
It's also important to note that repeated acts of negligence can gradually erode the trust's value and the beneficiaries' confidence. Even without bad intentions, inaction and errors can trigger significant consequences.
Trustees who aren't proactive may find themselves the subject of formal claims, especially when beneficiaries suffer prolonged losses or are left in the dark. This cumulative effect of negligence makes early legal consultation essential for both beneficiaries and trustees.
Distinguishing Breach From Negligence in Legal Claims
In trust & estate litigation, the distinction between breach and negligence shapes both the legal standard and the remedies. We often need to evaluate intent, pattern of conduct, and harm caused.
Key differences include:
Intent: A breach involves a deliberate or reckless disregard; negligence involves carelessness.
Burden of proof: Breaches may carry stricter burdens, especially when self-dealing is involved.
Remedies: Breaches can lead to harsher penalties, including removal, surcharge, or punitive damages.
Defenses: A trustee accused of negligence might defend their actions by showing they relied in good faith on professionals.
When we handle these cases, we examine records, testimony, communication patterns, and asset performance to determine where a trustee’s actions fall on the legal spectrum.
How Disputes Commonly Arise
Trustee misconduct isn’t always obvious at first. Many family members begin questioning a trustee’s behavior when distributions slow down or communication becomes limited.
Typical causes for disputes include:
Unequal distributions: Favoring one heir while ignoring the others.
Loss of assets: Trust value drops significantly without explanation.
Unexplained expenses: Trustees write checks to themselves or third parties without clear reasons.
Inaccessible records: Trustees fail to provide accounting despite multiple requests.
Once these signs appear, beneficiaries often turn to our firm for clarity. We begin by requesting documents, evaluating trust terms, and outlining potential claims under trust & estate litigation statutes.
Trustee Defenses and Mitigation Strategies
Trustees accused of breach or negligence aren’t automatically at fault. We also represent trustees and evaluate whether their actions align with trust terms, legal standards, and the original intent of the grantor.
Common trustee defenses include:
Good faith reliance: Acting based on trusted advice from attorneys or accountants.
Emergency action: Making decisions quickly to preserve assets during volatile markets.
Ambiguity in trust terms: Following a reasonable interpretation when language is unclear.
We also help trustees correct errors early to avoid escalation. Prompt action, transparency, and cooperation can resolve issues before they lead to full litigation.
Trustee Removal and Legal Remedies
When misconduct or negligence is proven, California courts may take action. The remedies depend on the severity of the harm and the trustee’s intent.
Courts may order:
Removal of trustee: If the trustee has failed repeatedly or lost beneficiary's trust.
Surcharge: Requiring the trustee to reimburse losses out of their own funds.
Restitution: Returning misused or wrongly distributed assets.
Injunctive relief: Temporarily freezing accounts or suspending certain activities.
These actions protect the integrity of the trust and restore beneficiary confidence. Our goal in trust & estate litigation is to preserve assets while promoting accountability.
Prevention Through Good Planning
We’ve seen how easily trustee disputes can divide families and drain resources. That’s why careful planning and education are critical to preventing future litigation.
Lawyers may advise clients to:
Choose responsible trustees: Name individuals with financial acumen and impartiality.
Provide clear instructions: Draft trust terms that minimize interpretation.
Update plans regularly: Reflect life changes, new laws, and evolving priorities.
Encourage transparency: Share intentions with family members when possible.
Even with solid planning, disputes can still arise. But clear language and sound administration make resolution easier.
Working With a Litigation-Focused Firm
Our experience in trust & estate litigation allows us to evaluate cases quickly and offer guidance tailored to the situation. Attorney Peter Bochnewich has earned a reputation for very good results and long-term client satisfaction. He approaches every referral with professionalism and treats clients and attorneys with genuine respect.
We prioritize collaboration to avoid unnecessary court time. When litigation is unavoidable, we prepare every case thoroughly with a strategy rooted in fairness and precision. We know how emotional these cases can be, so we stay responsive, transparent, and hands-on from start to finish.
Speak to a Trust & Estate Litigation Lawyer
If you believe a trustee has acted negligently or breached their fiduciary duty, or if you’re a trustee accused of misconduct, a trust & estate litigation lawyer is here to help. At Bochnewich Law Offices, we represent clients across Southern California, including Riverside County, Los Angeles County, San Bernardino County, Orange County, and San Diego County. Reach out today for clarity, direction, and strong legal support.