Can a Successor Trustee Also Be a Beneficiary in California?

You've been named as both successor trustee and beneficiary of a loved one's trust. Is that allowed? Can the same person manage the trust AND receive assets from it?

The short answer: Yes, absolutely. It's not only legal—it's extremely common. But it comes with important responsibilities and potential complications you should understand.

Yes, It's Legal and Common

California law permits the same person to serve as both trustee and beneficiary. In fact, this is one of the most common arrangements in family trusts.

Typical scenario: A parent creates a living trust naming themselves as initial trustee. They name their adult child as both:

• Successor trustee (to manage the trust after the parent dies)
• Beneficiary (to receive assets from the trust)

This makes sense. Parents often want their children to both inherit their assets AND manage the distribution process.

Why Families Choose This Arrangement

Simplicity

One person handles administration without needing to coordinate with a separate trustee.

Cost Savings

No need to pay a professional trustee when a trusted family member can serve.

Trust and Confidence

The trust creator knew this person well and trusted them with both roles.

Efficiency

The trustee-beneficiary can make decisions quickly without conflicts with an outside party.

The Catch: Fiduciary Duties Still Apply

Here's what's critical: Even though you're entitled to receive trust assets, you must still act as a fiduciary toward ALL beneficiaries—including yourself.

This means you cannot favor yourself over other beneficiaries, even though you're one of them.

Your Duties as Trustee (Even as Beneficiary)

Duty of Impartiality

You must treat all beneficiaries fairly, including yourself. You cannot:

• Give yourself more than your share
• Take distributions before other beneficiaries
• Make decisions that benefit you at others' expense

Duty of Loyalty

You must put the beneficiaries' collective interests first, not your personal interest in receiving more.

Duty to Account

You must keep records and provide accountings to co-beneficiaries, showing exactly what happened to trust assets—including what you received.

Duty to Follow Trust Terms

You distribute according to the trust document, not according to what you'd prefer.

Potential Conflicts of Interest

Being both trustee and beneficiary creates inherent conflicts. Here are situations where problems arise:

Conflict 1: Valuing Assets for Division

Scenario: The trust says you and your sibling each get 50% of the estate. The trust includes a house worth $800,000 and $200,000 in cash.

The conflict: If you take the house, it must be valued fairly. You might be tempted to undervalue it so you "owe" less equalization to your sibling.

The solution: Get an independent appraisal. Document fair market value objectively.

Conflict 2: Deciding When to Sell Property

Scenario: You want to keep the family home and buy out your siblings. They want to sell immediately.

The conflict: As trustee, you control timing. As beneficiary, you have a personal preference.

The solution: Act as a trustee first—consider what's best for the trust and all beneficiaries, not just your preference. If you want to buy, make a fair offer at appraised value.

Conflict 3: Setting Trustee Compensation

Scenario: The trust allows "reasonable" trustee compensation. You're doing the work—can you pay yourself?

The conflict: You're deciding your own salary from an estate you inherit from.

The solution: Keep compensation objectively reasonable. Document time spent. Consider what a professional would charge. Get other beneficiaries' consent if possible.

Conflict 4: Exercising Discretion

Scenario: The trust gives you discretion to distribute income for beneficiaries' "health, education, and support." You're both trustee and a beneficiary.

The conflict: You're deciding how much to give yourself.

The solution: Apply the same standards you'd apply to other beneficiaries. Document your reasoning. Consider what an independent trustee would decide.

How to Protect Yourself as Trustee-Beneficiary

1. Document Everything

Keep meticulous records of:

• Every decision you make and why
• How you valued assets
• Why distributions were made
• Time you spent on trustee duties
• Any compensation you took

If a co-beneficiary later challenges you, documentation is your defense.

2. Treat All Beneficiaries Equally

Apply the same rules to yourself that you apply to others:

• Same timeline for distributions
• Same valuation methods
• Same documentation requirements
• Same standards for discretionary decisions

3. Communicate Transparently

Keep other beneficiaries informed:

• Send regular updates
• Share accountings proactively
• Explain your decisions
• Respond promptly to questions

Suspicion grows in silence.

4. Get Independent Appraisals

For significant assets (especially real estate), get professional appraisals. Don't rely on your own estimates.

5. Consider Waiving Trustee Fees

Many family trustee-beneficiaries waive compensation to avoid conflicts and resentment. You'll receive your beneficiary share anyway.

6. Consult Professionals

An attorney and CPA can provide objective guidance—and documentation that you sought professional advice supports your good faith.

When to Consider Declining One Role

Sometimes it's better NOT to serve as both trustee and beneficiary:

Consider declining the trustee role if:

• You have significant conflicts with co-beneficiaries
• The trust involves complex discretionary decisions
• Family relationships are already strained
• You don't have time to serve properly
• The responsibility feels overwhelming

You can still be a beneficiary even if you decline to serve as trustee. The next named successor takes over administration.

What If Co-Beneficiaries Object?

Sometimes co-beneficiaries are uncomfortable with one beneficiary also controlling the trust.

Their options:

• Request detailed accountings
• Ask for independent appraisals
• Object to specific decisions
• Petition the court for removal (if you breach duties)
• Request court supervision of the trust

Your protection:

• Follow fiduciary duties carefully
• Document everything
• Communicate transparently
• Act in good faith
• Seek professional guidance

If you're doing everything properly, objections won't succeed.

What the Trust Creator Intended

Remember: the person who created this trust specifically chose you for both roles. They trusted your integrity to:

• Manage their estate responsibly
• Treat all beneficiaries fairly
• Receive your inheritance appropriately

Honoring their trust means taking both roles seriously and acting with integrity.

Common Questions

Can I distribute my share to myself before others?

Not unless the trust specifically allows it. Generally, distribute proportionally or wait until full distribution to all beneficiaries.

Can I buy trust property for myself?

Technically possible, but risky. If you buy trust property:

• Get an independent appraisal
• Pay fair market value
• Document everything
• Consider getting co-beneficiaries' written consent

Can I be removed as trustee?

Yes. Co-beneficiaries can petition the court to remove you if you breach your fiduciary duties. But simply being a beneficiary is NOT grounds for removal.

Should I hire an attorney even though I'm a beneficiary?

Yes. Professional guidance protects you as trustee AND ensures you properly receive your beneficiary share. The attorney fee comes from the trust, not your inheritance.

Get Professional Guidance

Serving as both successor trustee and beneficiary requires careful attention to your dual roles. The Law Offices of Rozsa Gyene helps trustee-beneficiaries navigate this balance—protecting you while ensuring proper administration.

Call (818) 291-6217 for a consultation, or visit our contact page.

Serving Glendale, Burbank, Pasadena, and all of Los Angeles County.

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This article provides general information about serving as both trustee and beneficiary in California. Every trust is different. Consult an attorney for advice specific to your situation.