Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

August 30, 2012
What to do if a Trustee has not taken action?

Q: I am writing for my Aunt A. My grandmother died in the 90's. She had a living trust that gave her house to her two daughters, Aunt A and Aunt B. Aunt A took care of my grandmother towards the end of her life, and the trust was changed to give her 3/4 interest in the house. Grandmother died in a nursing home, paid for by the county. Aunt A has lived in the house all these years, taking no action to close the trust or anything. She was afraid she couldn't afford to pay the attorney to do the administrative work required, afraid that the county would want some money for grandmother's care, and afraid Aunt B would find out she got more interest in the house. So she's done nothing at all. Aunt A is having health problems and needs to refinance the house for money to take care of her health and because the house is in disrepair.

My question is this: what is her legal liability at this point? She is afraid to take any action, because she doesn't know what the ramifications will be.

Any information or advice you can give us would be greatly appreciated! --Joy, Sacramento, CA

A: Based on your question, it sounds as if Aunt A is named as the trustee of your grandmother's trust. Trustees owe fiduciary duties to the beneficiaries of a trust, which, in this case, would be Aunt A and Aunt B, and maybe others. You do not mention who are the beneficiaries of your grandmother's other trust assets (bank accounts, personal property, etc.), but Aunt A would owe the same fiduciary duties to them.

Aunt A's specific duties regarding trust assets, including the house, will depend on the exact provisions of your grandmother's trust. Generally, however, Aunt A has a duty to keep all the beneficiaries informed about the trust, to properly manage the trust assets, not to prefer one beneficiary over the other, and not to use trust assets for her personal benefit.

Aunt A could be liable to Aunt B (and any other beneficiaries) for her failure to properly administer the trust after your grandmother's death. I would strongly recommend that Aunt A consult with an attorney who is experienced in trust administration as soon as possible, because the longer she waits and the more actions she takes with regard to the house, the more difficult the issues become. With knowledge of the trust agreement and more specific facts, an experienced attorney can advise Aunt A on how to approach Aunt B (and any other trust beneficiaries) about these issues.

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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