SECTIONS 16000-16015 - California Statutes

PROBATE CODE

SECTION 16000-16015

16000. On acceptance of the trust, the trustee has a duty to
administer the trust according to the trust instrument and, except to
the extent the trust instrument provides otherwise, according to
this division.

16001. (a) Except as provided in subdivision (b), the trustee of a
revocable trust shall follow any written direction acceptable to the
trustee given from time to time (1) by the person then having the
power to revoke the trust or the part thereof with respect to which
the direction is given or (2) by the person to whom the settlor
delegates the right to direct the trustee.
(b) If a written direction given under subdivision (a) would have
the effect of modifying the trust, the trustee has no duty to follow
the direction unless it complies with the requirements for modifying
the trust.

16002. (a) The trustee has a duty to administer the trust solely in
the interest of the beneficiaries.
(b) It is not a violation of the duty provided in subdivision (a)
for a trustee who administers two trusts to sell, exchange, or
participate in the sale or exchange of trust property between the
trusts, if both of the following requirements are met:
(1) The sale or exchange is fair and reasonable with respect to
the beneficiaries of both trusts.
(2) The trustee gives to the beneficiaries of both trusts notice
of all material facts related to the sale or exchange that the
trustee knows or should know.

16003. If a trust has two or more beneficiaries, the trustee has a
duty to deal impartially with them and shall act impartially in
investing and managing the trust property, taking into account any
differing interests of the beneficiaries.

16004. (a) The trustee has a duty not to use or deal with trust
property for the trustee's own profit or for any other purpose
unconnected with the trust, nor to take part in any transaction in
which the trustee has an interest adverse to the beneficiary.
(b) The trustee may not enforce any claim against the trust
property that the trustee purchased after or in contemplation of
appointment as trustee, but the court may allow the trustee to be
reimbursed from trust property the amount that the trustee paid in
good faith for the claim.
(c) A transaction between the trustee and a beneficiary which
occurs during the existence of the trust or while the trustee's
influence with the beneficiary remains and by which the trustee
obtains an advantage from the beneficiary is presumed to be a
violation of the trustee's fiduciary duties. This presumption is a
presumption affecting the burden of proof. This subdivision does not
apply to the provisions of an agreement between a trustee and a
beneficiary relating to the hiring or compensation of the trustee.

16004.5. (a) A trustee may not require a beneficiary to relieve the
trustee of liability as a condition for making a distribution or
payment to, or for the benefit of, the beneficiary, if the
distribution or payment is required by the trust instrument.
(b) This section may not be construed as affecting the trustee's
right to:
(1) Maintain a reserve for reasonably anticipated expenses,
including, but not limited to, taxes, debts, trustee and accounting
fees, and costs and expenses of administration.
(2) Seek a voluntary release or discharge of a trustee's liability
from the beneficiary.
(3) Require indemnification against a claim by a person or entity,
other than a beneficiary referred to in subdivision (a), which may
reasonably arise as a result of the distribution.
(4) Withhold any portion of an otherwise required distribution
that is reasonably in dispute.
(5) Seek court or beneficiary approval of an accounting of trust
activities.

16005. The trustee of one trust has a duty not to knowingly become
a trustee of another trust adverse in its nature to the interest of
the beneficiary of the first trust, and a duty to eliminate the
conflict or resign as trustee when the conflict is discovered.

16006. The trustee has a duty to take reasonable steps under the
circumstances to take and keep control of and to preserve the trust
property.

16007. The trustee has a duty to make the trust property productive
under the circumstances and in furtherance of the purposes of the
trust.

16009. The trustee has a duty to do the following:
(a) To keep the trust property separate from other property not
subject to the trust.
(b) To see that the trust property is designated as property of
the trust.

16010. The trustee has a duty to take reasonable steps to enforce
claims that are part of the trust property.

16011. The trustee has a duty to take reasonable steps to defend
actions that may result in a loss to the trust.

16012. (a) The trustee has a duty not to delegate to others the
performance of acts that the trustee can reasonably be required
personally to perform and may not transfer the office of trustee to
another person nor delegate the entire administration of the trust to
a cotrustee or other person.
(b) In a case where a trustee has properly delegated a matter to
an agent, cotrustee, or other person, the trustee has a duty to
exercise general supervision over the person performing the delegated
matter.
(c) This section does not apply to investment and management
functions under Section 16052.

16013. If a trust has more than one trustee, each trustee has a
duty to do the following:
(a) To participate in the administration of the trust.
(b) To take reasonable steps to prevent a cotrustee from
committing a breach of trust or to compel a cotrustee to redress a
breach of trust.

16014. (a) The trustee has a duty to apply the full extent of the
trustee's skills.
(b) If the settlor, in selecting the trustee, has relied on the
trustee's representation of having special skills, the trustee is
held to the standard of the skills represented.

16015. The provision of services for compensation by a regulated
financial institution or its affiliates in the ordinary course of
business either to a trust of which it also acts as trustee or to a
person dealing with the trust is not a violation of the duty provided
in Section 16002 or 16004. For the purposes of this section,
"affiliate" means a corporation that directly or indirectly through
one or more intermediaries controls, is controlled by, or is under
common control with another domestic or foreign corporation.