Fiduciary Duty: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

A fiduciary duty is the legal obligation a trustee, executor, or agent under a power of attorney owes to act in the best interest of the people they serve, in good faith and with reasonable care.

How it works in California

California breaks the general idea of fiduciary duty into specific, enforceable rules for trustees. Under Prob. Code, § 16000, a trustee must administer the trust according to its terms. Under Prob. Code, § 16002, the trustee must act solely in the beneficiaries’ interest, not the trustee’s own. When a trustee crosses that line, the consequences can be serious; see trustee breach of fiduciary duty in California for what a beneficiary can do about it.

Where a trust has more than one beneficiary, Prob. Code, § 16003 adds a duty of impartiality: the trustee has to weigh the different beneficiaries’ interests fairly rather than favoring one, even a favorite child. Prob. Code, § 16004 bars the trustee from using trust property for personal profit or any purpose unrelated to the trust.

An executor and an agent under a power of attorney owe closely related duties, drawn from probate and agency law rather than the trust statutes specifically, but the core idea is the same: act for the people you serve, not for yourself.

Why it matters

For example, a trustee who is also a beneficiary sells a trust-owned rental property to their own spouse at a discount. Even if no other beneficiary objects at the time, that transaction violates the duty of loyalty and the duty to avoid conflicts of interest, and it can be unwound or charged back against the trustee’s share years later.

Common mistakes

Treating a fiduciary role as a source of personal benefit rather than a job done for someone else. Favoring one beneficiary’s wishes over another’s without a reason tied to the trust’s terms. Assuming that disclosing a conflict of interest after the fact fixes a transaction that needed prior consent or court approval.

Related terms

• HEMS standard: one way a trust narrows a trustee’s discretion within the broader fiduciary duty.
• Successor trustee: the person who takes on this same fiduciary duty once the original trustee can no longer serve.
• Trust decanting: a power a trustee still has to exercise consistent with their fiduciary duty, not just because the statute allows it.
• Trustee: the role most often bound by this duty.
• Trustee accounting: the paperwork that lets beneficiaries check whether the fiduciary duty was actually followed.
• Trustee removal: the remedy available when a trustee breaches this duty badly enough.

Part of the California estate planning glossary. For the full treatment, see Trustee Breach of Fiduciary Duty in California.