Serving as a trustee is not just an honor. It can also be a legal burden. You may start with the best intentions, but the role quickly becomes more complex than expected. One misstep in administering a California trust can unravel years of family peace, create legal exposure, or even land you in court. From missed deadlines to unclear communication, these aren’t just minor oversights. They’re common trustee mistakes that can cost real people real money.
So, what mistake does a trustee make most often? It usually comes down to treating the trust like a personal project instead of a fiduciary duty. Trustees aren’t just helpers. They’re legal stewards. And California law holds them to a high standard.
If you’ve been appointed trustee or are trying to hold one accountable, Geremia & Cullen, PC, can help you understand what’s required and what happens when things go wrong. Our attorneys regularly represent beneficiaries and trustees in complex, emotionally charged trust disputes throughout California.
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What Are Common Trustee Mistakes?
To help you avoid legal and financial missteps, here are seven common trustee mistakes we regularly see and how each one can derail a trust if not handled carefully.
1. Failing to Follow the Trust Document
It sounds simple, but it’s the most frequent and damaging of trustee errors. Whether it’s delaying distributions, making unauthorized investments, or ignoring specific instructions, a trustee who disregards the document risks breaching fiduciary duty.
California law requires trustees to administer a trust by its terms. Deviating intentionally or accidentally can lead to court intervention, reversal of transactions, and personal liability. For this reason, read the trust in full before doing anything. If terms are unclear, seek legal clarification rather than guessing.
2. Delaying Mandatory Notices or Filings
In California, trustees have legal deadlines that begin ticking the moment the role becomes active. The most overlooked is the 60-day notice to beneficiaries. Miss it, and you risk claims of concealment or mismanagement.
Delays in notice, inventory, or tax filings are common trustee errors, which can halt the administration and escalate tensions. Courts take timeliness seriously, because so do beneficiaries who feel excluded or uninformed.
3. Poor Communication with Beneficiaries
Even well-meaning trustees can fall into the trap of silence. They assume that updates aren’t necessary because they’re doing the work. But trustees have a legal duty to keep beneficiaries “reasonably informed.” That doesn’t just mean mailing a statement once a year. Beneficiaries want to know what’s happening, especially if they’re grieving, confused, or suspicious of other family members.
To avoid this mistake, communicate early and often. Transparency builds trust and reduces the risk of litigation. If you’re unsure how much to share, speak with an attorney who can help you strike the right balance.
4. Commingling Personal and Trust Assets
It might seem harmless to temporarily temporarily use your personal account, especially if the trust doesn’t yet have one. But this is one of the most serious common trustee errors and a red flag in any investigation.
Trustees must maintain clear and separate accounts. Commingling not only violates fiduciary duty, it makes you appear dishonest even if you’re not. For this reason, open a dedicated trust account as soon as possible. You must record all trust income, distributions, and expenses through that account and corresponding records.
5. Mismanaging Investments or Selling Assets Improperly
Trustees often feel pressure to grow the trust. However, making risky investments or failing to diversify can backfire, especially if assets lose value. Similarly, selling trust property without authority or adequate notice can lead to legal disputes. California’s Uniform Prudent Investor Act outlines the “prudent investor rule.” Under it, trustees must manage trust assets as a prudent investor would—balancing risk and return with care and strategy.
6. Ignoring Tax Obligations
Many trustees are unaware they’re now responsible for the trust’s tax filings. Missing a deadline or failing to file can result in penalties along with potentially unhappy beneficiaries wondering why their inheritance shrank. Depending on their structure, trusts may be subject to income tax at both the state and federal levels. In some cases, trustees must also file estate tax returns.
7. Showing Favoritism or the Appearance of It
Trustees are human. In California, most are also family members. It’s easy to fall into unconscious favoritism, advancing funds to one sibling, responding more quickly to another, or using language that implies bias. Even if you believe one beneficiary “deserves more,” the trust terms, not your instincts, must guide decisions. To avoid this mistake, treat every beneficiary as equal under the law. If that feels difficult, it’s a sign you may need legal support, or even to consider stepping aside.
Not sure if you’re making the right moves as trustee?
We’ll walk you through your duties and help you avoid mistakes that could cost you or your family down the road.
Can a Trustee Be Held Personally Liable for Mistakes?
If a trustee breaches their duties and causes harm, California courts can surcharge the trustee personally, meaning they must repay the trust from their own funds. Whether failing to safeguard property, making unwise financial moves, or acting in self-interest, the answer to “can a trustee be held personally liable for mistakes” is a resounding yes. Moreover, intent isn’t always required. Even accidental breaches can lead to liability if they cause losses or violate fiduciary obligations.
Still Wondering What Mistakes a Trustee Makes? Talk to Geremia & Cullen, PC, We Understand the Stakes
At Geremia & Cullen, PC, we help trustees and beneficiaries navigate these situations with clarity, honesty, and focus. Whether you’re trying to correct a misstep, protect your inheritance, or resolve a brewing conflict before it explodes, we’ll meet you where you are with calm, capable legal guidance.
Founding attorneys Brian Geremia and Sarah Cullen bring decades of combined experience and deep Sacramento roots to every case. Brian is a Super Lawyers Rising Star, a published legal scholar, and a respected voice in trust litigation statewide. Sarah, a former employment law attorney and judicial extern, has established a reputation for professionalism, ethical advocacy, and personalized attention to every client she serves.
Contact us today. Whether you’re worried about your role or wondering if your trustee has made a serious mistake, we’re here to talk. There’s no pressure. Just answers and a path forward.
