What actions can be taken against a trustee who won’t disburse funds from a trust on unjust grounds?

Question

If a trustee was refusing to disburse funds to a beneficiary and a case could be made that they did not have any sound reason for withholding, what legal actions does the law provide, to lawyers or citizens, to enforce the terms of the trust? (In California, USA).

I mean, I would like to know a list of options: sue them in a civil court? How does one do that, file paperwork at a local court or something?

Is there any other option than suing, like submitting a case to a local court and having them make a court order to the trustee to pay?

Or, if I have the right to change trustees, how do I formally undertake that action? Can I appoint myself as the trustee?

And so on: what actions exist?

Answer 1

If a trustee was refusing to disburse funds to a beneficiary and a case could be made that they did not have any sound reason for withholding, what legal actions does the law provide, to lawyers or citizens, to enforce the terms of the trust?

A trustee doesn't need a sound reason for not making a distribution. Unless a trust agreement absolutely denies a trustee all discretion and orders the trustee to, for example, shut down the trust and distribute all of its funds when the beneficiary turns twenty-one years of age, the beneficiary has no right whatsoever to have the trustee make any distribution to them.

In 99% of the cases where a beneficiary of a trust complains about the trustee not making distributions to them, they have no valid legal basis to bring a lawsuit and no right to receive any distributions from the trust that the trustee doesn't affirmatively decide to make without court input.

The trustee is usually required to provide a copy of the trust to the beneficiary if asked to do so (or at least the portions of the trust relevant to the beneficiary if there are multiple beneficiaries) and certain information about the assets and asset management of the trust.

But the whole point of creating a trust that affords a trustee discretion is to allow the trustee to no make a distribution without having to justify that decision to anyone.

If the trustee violates the trust agreement, or embezzles funds, or invests in a manner prohibited by law (e.g. putting all of the trust's money into a single penny stock that loses most of its value) or fails to file tax returns when required by law, the beneficiary in California can bring a lawsuit for breach of fiduciary duty in the Superior Court in California that has jurisdiction over the trustee to pay money damages for the breach of fiduciary duty and/or to be replaced for failing to do their job properly in a manner severe enough to justify their removal from their position.

Or, if I have the right to change trustees, how do I formally undertake that action? Can I appoint myself as the trustee?

The trust agreement will spell out the beneficiary's rights. Unless the trustee has grossly failed to carry out their mandatory obligations, usually the beneficiary usually can't change the trustee, but trust agreements vary.

A beneficiary almost certainly can't appoint himself as the trustee. If the trustee were removed, and the trust did provide for another means to fill the vacancy in the trustee position, the court would probably appoint the trust department of a bank to replace the trustee who was removed for misconduct.

Answer 2

Virtually none

Subject to the trust deed, the trustee decides what is in the best interests of the beneficiary. The trustee does not have to take the wises of the beneficiary into account or even find out what they are.

How trustees are replaced and who is eligible to act as trustee will be spelled out in the deed. Outside of that, barring any obvious illegality - like the trustee using the trust assets for their own benefit, there is no chance of replacing a trustee.

If you are alleging a breach of trust:

1. Be careful. Falsely accusing someone of a crime is defamation.
2. I can’t speak for California specifically but trust matters are usually beyond the jurisdiction of local courts. If you need to take this to the State Supreme Court, that will be expensive and require some serious legal expertise.