The California Law on Trustee Incompetency

by Jim Thomas
If a parent is your trustee, incompetence can be a thorny issue.

If a parent is your trustee, incompetence can be a thorny issue.

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Removing a trustee for incompetence in California can be a painful process for all concerned. Since trustees are presumed by law to be competent, beneficiaries of a trust who want to remove a trustee must prove to the satisfaction of the court that the trustee is incapacitated to the extent he is unfit to serve. Many trustee challenges involve family members, for example, the beneficiaries of a trust created by parents on their children's behalf. Litigation to remove a parent as trustee in such circumstances can be costly, time-consuming and emotionally devastating.

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Trust

A trust is set up to allow one person to hold title to property — which can consist of real estate, money or other assets — for the benefit of another person. The trustee has a fiduciary duty to act in good faith to manage the property for the benefit of the beneficiaries by collecting, preserving and protecting the assets in the trust.

Presumption of Competence

Courts in California operate under the presumption that a trustee is competent. As a result, a beneficiary who tries to remove a trustee for incompetence has to overcome that presumption with solid proof. Sometimes the language of the trust sets forth the grounds for establishing incompetence. If not, case law in California requires evidence that a trustee is substantially unable to resist fraud, duress, menace or undue influence or is no longer able to provide for his personal needs, such as food, shelter and clothing.

Establishing Incompetence

California Probate Code 15642 states that a trustee can be removed if he is "unfit" to administer the trust. A lack of fitness is usually established by evidence from doctors and other medical professionals that the trustee suffers from a health condition that renders him incompetent to carry out his fiduciary duties to the beneficiaries. Testimony from a doctor as to the incompetence of the trustee to fulfill his duties is usually necessary. Some attorneys have introduced before-and-after handwriting evidence to show the trustee now suffers from a neurological condition that proves incompetence, but courts in California have required more than just handwriting evidence to establish that a trustee is unfit.

Considerations

Beneficiaries should think carefully about filing suit to remove a trustee. It can take years for such litigation to wind its way through the court system. The assets of the trust might be drained by a trustee who uses them to defend himself. If the beneficiaries and trustee are family members, a court fight could shatter those relationships. Mediation or negotiation might resolve the dispute and preclude the need to litigate.