Trustee Surcharge: Making a Trustee Pay Personally
A surcharge makes a California trustee pay personally for a breach of trust. Probate Code section 16440 charges the trustee with loss or depreciation to the trust caused by the breach with interest, with any profit they made from it, and with profit the trust would have earned but for the breach.
What a trustee can be charged with
California measures a trustee’s liability for breach of trust under Probate Code section 16440, which sets three alternatives. A trustee is chargeable with any loss or depreciation in the value of the trust estate resulting from the breach, with interest; with any profit the trustee made through the breach, with interest; and with any profit that would have accrued to the trust estate where the loss of that profit resulted from the breach. That third measure matters more than it looks, because it reaches the trustee who did nothing — the one who left a property empty, or funds uninvested, while the estate lost ground. The claim is brought as a petition under section 17200 concerning the internal affairs of the trust, commonly alongside removal. The statute also supplies the trustee’s defence: where the trustee acted reasonably and in good faith under the circumstances as known to them, the court may in its discretion excuse liability in whole or in part where doing so is equitable.
Sources: Probate Code s.16440 - Measure of liability for breach of trust · Probate Code s.17200 - Petitions concerning internal affairs of trust · Verified 2026-08-14.
The three measures, in plain terms
| Measure | What it captures | Typical fact pattern |
|---|---|---|
| Loss or depreciation, with interest | What the trust is worth less | Property sold below value; funds spent on the trustee’s own costs |
| Trustee’s profit, with interest | What the trustee gained | Living rent-free in trust property; taking undisclosed compensation |
| Profit the trust would have made | What inaction cost | A rental left vacant for years; cash left idle while the estate carried debt |
Why this is the claim that recovers money
Removing a trustee changes who holds the keys. It does not, by itself, restore anything. A surcharge reaches the trustee’s own assets, and it is the reason a case with a depleted trust can still be worth bringing — the money need not still be in the trust for the court to order it back into one.
Related: the breach that supports the claim, removal under §15642, compelling the accounting that proves it, what a trustee may properly charge, and who pays the fees.
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How contingency fees work in California
A contingency fee means the attorney is paid from what is recovered rather than by the hour, so a beneficiary who cannot fund litigation out of pocket can still bring a claim. California regulates these agreements closely. Under Business and Professions Code section 6147, the agreement must be in writing and the attorney must give the client a duplicate copy, signed by both, when the contract is made. It must state the agreed contingency rate; how disbursements and costs incurred in prosecuting or settling the claim will affect that fee; and to what extent the client could be required to pay for related matters. Unless the matter falls under section 6146, the agreement must also state that the fee is not set by law and is negotiable. These are not formalities: failure to comply with any provision of section 6147 makes the agreement voidable at the client’s option, leaving the attorney entitled only to a reasonable fee.
Sources: Business and Professions Code s.6147 - Contingency fee contracts · Verified 2026-08-03.
Not every matter suits a contingency arrangement, and the firm does not take every case on one. Whether yours qualifies depends on the facts, the likely recovery, and the assets actually available to satisfy a judgment. Ask when you call.
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