When a California trust has two co-trustees and one co-trustee is removed through a court proceeding, the remaining co-trustee faces a specific and often underappreciated legal risk: the beneficiaries who successfully removed one co-trustee may now pursue the remaining co-trustee for their own alleged failures to prevent or report the removed co-trustee’s misconduct. Under California trust law, co-trustees have specific obligations to monitor each other’s conduct and to take action when one co-trustee’s misconduct comes to the other’s attention. A co-trustee who knew of their counterpart’s misconduct and failed to act, or who participated in decisions that the removed co-trustee made unilaterally, faces the argument that they breached their own independent fiduciary duties by allowing the misconduct to continue. Understanding this independent liability risk, and how to build the defense for the remaining co-trustee, is essential legal work in the post-removal phase of a contested Pasadena trust administration.
The Co-Trustee’s Duty to Monitor and Object
California Probate Code Section 16013 establishes the obligations of co-trustees toward each other’s conduct. Under this provision, a co-trustee has a duty to take reasonable steps to compel a co-trustee to correct a breach of trust. If a co-trustee knows that another co-trustee has committed or is committing a breach of trust and fails to take reasonable steps to compel correction, the inactive co-trustee can be held liable for the breach jointly with the breaching co-trustee. The remaining co-trustee who wants to avoid liability for the removed trustee’s conduct must demonstrate that they either did not know of the misconduct or that they took reasonable steps to address it when they became aware of it. Establishing the timeline of the remaining co-trustee’s knowledge and the steps they took in response is the central factual task in the remaining co-trustee’s defense.
The Innocent Co-Trustee Defense
California Probate Code Section 16013(b) provides that a co-trustee is not liable for a breach of trust committed by another co-trustee unless the co-trustee participated in the breach, improperly delegated their administration authority to the breaching co-trustee, failed to compel redress of a breach after becoming aware of it, or was negligent in supervising the breaching co-trustee. When the remaining co-trustee can establish that they had no knowledge of the specific misconduct, that they did not delegate their authority in a way that enabled the misconduct, and that the trust administration structure did not give them a reasonable opportunity to discover it, they have the innocent co-trustee defense that limits their personal liability for acts of their co-trustee that they were not able to prevent.
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Documenting the Remaining Co-Trustee’s Independent Conduct
The most important evidence in the remaining co-trustee’s defense is documentation of their own independent participation in trust administration decisions, their communications with the now-removed co-trustee about matters of concern, and any objections they raised to specific administration decisions. A co-trustee who can produce emails and written communications showing that they raised concerns about specific transactions before they were completed is in a much stronger defensive position than one whose only response to the misconduct was acquiescence. Proactive gathering of all communications between the co-trustees during the period of the removed trustee’s misconduct, combined with the remaining trustee’s own records of their independent administration decisions, builds the factual foundation for the innocent co-trustee defense.
The California Legislature’s Probate Code Section 16013 establishes co-trustee liability standards. Working with an experienced Pasadena trustee defense attorney who understands co-trustee liability and the innocent co-trustee defense gives remaining co-trustees the targeted legal protection they need when one co-trustee’s removal creates independent liability risk for them.
