Can I Remove a Fiduciary for Excessive Fees

I recently spoke with Emily, a woman devastated to learn her mother’s trust was draining away not because of mismanagement, but because of seemingly legal, yet exorbitant, fees charged by the trustee – her own aunt. Emily had meticulously reviewed the trust documents and, while there was no explicit cap on fees, the amounts felt predatory. She’d spent $8,000 just compiling the records to show the fees were unreasonable, a cost that felt like throwing good money after bad. This scenario, unfortunately, is far more common than people realize. As an Estate Planning Attorney and CPA with over 35 years of experience here in Escondido, I often advise clients navigating these treacherous waters, and the answer, while complex, is often yes, but it requires a strategic approach.

What Constitutes “Excessive” Fees for a Trustee?

Determining whether a trustee’s fees are excessive isn’t simply a matter of subjective feeling. Courts look at several factors. California law allows trustees to charge reasonable compensation for their services (Probate Code § 16420). However, “reasonable” doesn’t mean carte blanche. Courts will consider the size and complexity of the trust, the trustee’s expertise, the time devoted to administration, and – crucially – what similarly situated professionals would charge for the same services. A trustee who is both a professional fiduciary and a CPA, like myself, is often held to a higher standard; our training demands a demonstrable cost-benefit analysis for all services rendered. Excessive fees aren’t always blatant overbilling, either. They can manifest as unnecessary expenses, self-dealing (using trust assets for personal gain), or hiring excessively priced vendors with whom the trustee has a personal relationship.

What Steps Can I Take to Challenge Trustee Fees?

The first step is documentation. Assemble every invoice, receipt, and account statement related to the trust. Compare the charges to industry standards. A forensic accounting review, while costly upfront, can be invaluable in demonstrating the extent of the overreach. Next, formally request an accounting from the trustee. This is a legal right of beneficiaries, and the trustee is obligated to provide one. If the accounting is insufficient or you suspect it’s inaccurate, you can petition the court for a formal accounting under Probate Code § 16420. This petition can also demand the trustee provide detailed justification for all fees charged. Remember, simply asking the trustee to lower fees rarely works; a formal, legally-backed demand carries far more weight.

Can I Petition the Court to Remove the Trustee?

Yes, but removal isn’t automatic. You must demonstrate that the trustee has breached their fiduciary duty, and excessive fees, especially when combined with other questionable actions, can certainly constitute a breach. The court will weigh the seriousness of the misconduct against the disruption that removal might cause. Often, a petition for removal is coupled with a request for surcharge – forcing the trustee to personally repay the improperly charged fees. However, proving a breach of fiduciary duty isn’t always straightforward, especially with complex financial records. That’s where the CPA skillset is invaluable – dissecting the financial data, identifying discrepancies, and presenting a clear, compelling case to the court.

What if the Trustee Claims They Acted in Good Faith?

Good faith isn’t a shield against liability for excessive fees. While a trustee isn’t expected to be a financial expert, they are expected to exercise reasonable care and diligence in managing trust assets. Claiming ignorance of reasonable fee structures won’t excuse blatant overcharging. Furthermore, if the trustee is a professional fiduciary, the standard is even higher. They are presumed to have knowledge of industry standards and best practices. However, Probate Code § 21311 offers some protection: If a beneficiary sues the trustee under a “no-contest” clause, the beneficiary is only penalized if the lawsuit was filed without ‘probable cause.’

What About Disputes Over Assets Not Formally in the Trust?

This is a growing area of concern, especially with real estate. If a home wasn’t properly titled in the trust before the grantor’s death, resolving ownership can be complex. For deaths on or after April 1, 2025, if the property value is up to $750,000, a ‘Petition for Succession’ under AB 2016 (Probate Code § 13151) may offer a simpler, faster alternative to a full Heggstad trial. It’s crucial to differentiate between a “Petition” (a judge’s order) and an “Affidavit” as these are often confused. If the property value exceeds that threshold, or if there are complex ownership issues, a Heggstad petition may still be necessary.

Why is Digital Evidence So Important Now?

Increasingly, evidence of undue influence or mismanagement resides in digital form – emails, text messages, cloud storage. But accessing this information isn’t always easy. Without proper legal authority under RUFADAA (Probate Code § 870), a trustee or beneficiary might be legally blocked from subpoenaing crucial digital evidence needed to prove their case. This is a critical consideration when gathering evidence, and it’s another area where experienced legal counsel is essential.

How do California trustee duties and funding rules shape the outcome for beneficiaries?

Success in trust administration depends on more than just the document; it requires active management of assets, precise accounting to beneficiaries, and careful navigation of tax rules. Whether dealing with a blended family or complex real estate, understanding the mechanics of trust law is the only way to ensure the grantor’s wishes survive scrutiny.

Ultimately, the success of a trust depends on the details—proper funding, clear terms, and a trustee willing to follow the rules. By anticipating friction points and documenting every step of the administration, fiduciaries can protect the estate and themselves from liability.

Verified Authority on California Trust Litigation & Disputes

• The 120-Day Rule (Probate Code § 16061.7): California Probate Code § 16061.7
  The most critical statute in trust litigation. It establishes the 120-day deadline for contesting a trust after the notification is mailed. Missing this deadline usually ends the case before it starts.
• Caregiver Presumption (Probate Code § 21380): California Probate Code § 21380
  This statute protects seniors by presuming that gifts to care custodians are the result of fraud or undue influence. It is the primary weapon used to overturn “deathbed amendments” that favor a caregiver over family.
• No-Contest Clauses (Probate Code § 21311): California Probate Code § 21311
  Defines the strict limits on enforcing penalty clauses. It explains that a beneficiary can only be disinherited for suing if they lacked “probable cause” to bring the lawsuit.
• Petition for Instructions (Probate Code § 17200): California Probate Code § 17200
  The “gateway” statute for most trust litigation. It allows a trustee or beneficiary to petition the court for instructions regarding the internal affairs of the trust, from interpreting terms to removing a trustee.
• Asset Recovery “Backup” (AB 2016): California Probate Code § 13151 (Petition for Succession)
  Effective April 1, 2025, this statute provides a streamlined path (Judge’s Order) to resolve disputes over ownership of a primary residence valued up to $750,000, often avoiding costly Heggstad litigation.
• Digital Discovery (RUFADAA): California Probate Code § 870 (RUFADAA)
  Essential for modern litigation. This act governs who can access a decedent’s digital communications—often the “smoking gun” evidence in undue influence or capacity trials.