California Code, PROB 16401.

California Code, PROB 16401.

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Probate Code - PROB

DIVISION 9. TRUST LAW [15000 - 19530] Â Â ( Division 9 enacted by Stats. 1990, Ch. 79. ) Â Â PART 4. TRUST ADMINISTRATION [16000 - 16632] Â Â ( Part 4 enacted by Stats. 1990, Ch. 79. ) Â Â CHAPTER 4. Liability of Trustees to Beneficiaries [16400 - 16465] Â Â ( Chapter 4 enacted by Stats. 1990, Ch. 79. ) Â Â

ARTICLE 1. Liability for Breach of Trust [16400 - 16403] Â Â ( Article 1 enacted by Stats. 1990, Ch. 79. )

  16401.  (a) Except as provided in subdivision (b), the trustee is not liable to the beneficiary for the acts or omissions of an agent. (b) Under any of the circumstances described in this subdivision, the trustee is liable to the beneficiary for an act or omission of an agent employed by the trustee in the administration of the trust that would be a breach of the trust if committed by the trustee: (1) Where the trustee directs the act of the agent. (2) Where the trustee delegates to the agent the authority to perform an act that the trustee is under a duty not to delegate. (3) Where the trustee does not use reasonable prudence in the selection of the agent or the retention of the agent selected by the trustee. (4) Where the trustee does not periodically review the agent’s overall performance and compliance with the terms of the delegation. (5) Where the trustee conceals the act of the agent. (6) Where the trustee neglects to take reasonable steps to compel the agent to redress the wrong in a case where the trustee knows of the agent’s acts or omissions. (c) The liability of a trustee for acts or omissions of agents that occurred before July 1, 1987, is governed by prior law and not by this section. (Amended by Stats. 1995, Ch. 63, Sec. 9. Effective January 1, 1996.)