Someone Took Property From the Trust. What Can You Actually Recover?

The deed was signed eleven weeks before your mother died. It moved the house, the only real asset in her trust, to the one sibling who had been living with her. The bank accounts were emptied in the same stretch. You are told this is what she wanted.

California gives you a specific tool for this, and it is not an ordinary lawsuit. It is a petition under Probate Code section 850, heard in the probate court, and it does two separate things that people routinely collapse into one. It gets the property back. Then, if the taking was bad enough, it punishes the person who took it.

The gap between those two things is where most of the money is. It is also where California appellate courts openly disagree with each other, and have for seven years.

The petition that moves property back is section 850

Section 850 lets a trustee, a personal representative, or any interested person ask the probate court to sort out who owns what. The provision that matters in a taking case is the one covering the situation where the trust "has a claim to real or personal property, title to or possession of which is held by another." There is a parallel provision for a decedent's estate. The petition has to "set forth facts upon which the claim is based," which in practice means you plead the transfers, the dates, and the circumstances, not a conclusion that something was stolen.

If the court agrees the property belongs to the trust, section 856 directs it to order a conveyance or transfer "to the person entitled thereto, or granting other appropriate relief." The house comes back. The accounts are restored.

Worth understanding before you file: section 850 is neutral machinery. The same statute handles the entirely innocent case where a settlor bought a rental in 2011, always treated it as trust property, and simply never got around to signing the deed into the trust. Nobody did anything wrong there. The petition still works. Which petition you are actually filing, a title cleanup or an accusation, determines everything that follows.

Returning the property is not the punishment

This is the point that changes the arithmetic, and the Fifth District put it about as plainly as a court can. There is nothing punitive about requiring a thief to return stolen property to its rightful owner.

The punishment lives in Probate Code section 859. If a court finds that a person has "in bad faith wrongfully taken, concealed, or disposed of property belonging to" a trust, a decedent's estate, an elder, a dependent adult, a minor, or a conservatee, that person "shall be liable for twice the value of the property recovered." The section closes by saying its remedies "shall be in addition to any other remedies available in law."

Two findings unlock it, and the Second District stated the test in Estate of Kraus (2010) 184 Cal.App.4th 103: the penalty is imposed when an interested party establishes both that the property is recoverable under section 850 and that there was a bad faith taking. Neither finding alone is enough.

How large the penalty is depends on which court decides it

Here is the unresolved question. The trust recovers a $500,000 property. The taking was in bad faith. Does the wrongdoer owe $1,000,000, or $1,500,000?

In Conservatorship of Ribal (2019) 31 Cal.App.5th 519, the Fourth District, Division Three, said the smaller number. The obligation to return the property merges into the doubled figure, so the total is twice the value taken and no more. The court's reasoning was textual and blunt: "If the Legislature had intended damages to be tripled, it would have written something akin to 'the person shall be liable for [three times] the value of the property recovered by an action under this part.'" In its experience, the Legislature knows how to distinguish double damages from treble damages and has provided for each in numerous contexts.

In Estate of Ashlock (2020) 45 Cal.App.5th 1066, the Fifth District said the larger number, and said Ribal was wrong. Its reasoning starts from a detail that is easy to miss: the word "damages" does not appear anywhere in sections 850 through 859. The duty to hand the property back arises under section 856 and applies whether the taking was deliberate or an innocent misunderstanding. Section 859 is a separate penalty for culpable conduct. Read that way, a $10,000 withdrawal from a decedent's account produces a judgment of $30,000, of which $10,000 is simply the money coming home.

That was not a hypothetical for the appellant in Ashlock. The estate recovered eighteen properties collectively valued at $5,148,000, and she was held liable under section 859 for $10,296,000 on top.

Los Angeles sits in the district that had already answered

For a case filed in Los Angeles County, this split is less abstract than it looks, because the Second Appellate District covers Los Angeles and the Second District had taken a position a decade before either of those cases.

Kraus was a Second District, Division Five decision. David Kraus had withdrawn $197,402 from his dying sister's bank accounts using a power of attorney that turned out to be void. The beneficiaries of her will and trust petitioned under section 850. The probate court found bad faith, ordered him to return the $197,402, and separately imposed a statutory penalty of $394,804. The Court of Appeal affirmed the whole judgment. That is the return plus double structure, applied and upheld, in the district where Los Angeles trust disputes are heard.

When the Fifth District decided Ashlock, it expressly aligned itself with Kraus and against Ribal, noting that Ribal had cited and quoted Kraus without acknowledging the conflict it was creating. The disagreement has not been resolved since. It remains a live question, which is worth knowing on both sides of a settlement conversation, because the exposure a defendant is negotiating against may be half again what they think it is.

Bad faith is a real gate, and it is where these cases are lost

Beneficiaries tend to assume that proving the transfer was improper proves everything. It does not. Levin v. Winston-Levin (2019) 39 Cal.App.5th 1025 is the case to read before assuming otherwise.

Robert Levin's trust was amended seven times across nearly thirty years. After he died, his daughter challenged the 2008 and 2012 amendments, both of which favored his widow. The probate court found a presumption of undue influence as to the 2012 amendment that went unrebutted, voided that amendment in full, and ordered the widow to return the property she had taken under it and a related deed. A complete win on the section 850 petition.

And no section 859 penalty at all. The trial court declined to find bad faith, and the Court of Appeal affirmed, holding that section 859 applies to an undue influence theory only where the undue influence was exerted in bad faith. The property went back. The doubling did not happen.

Section 859 has three doors and only two require bad faith

The statute is usually described as a bad faith provision, which is not quite right. In Kerley v. Weber (2018) 27 Cal.App.5th 1187, the court parsed section 859 into three clauses separated by "or," describing three categories of conduct that can support the penalty:

• Taking property in bad faith. The general route. Bad faith must be found.
• Taking property by the use of undue influence in bad faith. Bad faith must be found here too, which is precisely what sank the claim in Levin.
• Taking property through elder or dependent adult financial abuse as defined in Welfare and Institutions Code section 15610.30. On this route, Kerley held no separate finding of bad faith is necessary.

That third door is wider than it sounds. Section 15610.30 defines financial abuse to include taking, secreting, appropriating, obtaining, or retaining an elder's property "for a wrongful use or with intent to defraud," and separately, taking it by undue influence. If the person whose property was moved was 65 or older, the claim you plead is a strategic decision with a different proof burden attached, not a formality.

The elder abuse route also changes who pays the lawyers

Attorney fees under section 859 are discretionary. The statute says the wrongdoer "may, in the court's discretion, be liable for reasonable attorney's fees and costs." A probate judge can decline.

Welfare and Institutions Code section 15657.5 is written the other way. Where financial abuse of an elder or dependent adult is proven by a preponderance of the evidence, "the court shall award to the plaintiff reasonable attorney's fees and costs." Not may. Shall. And section 859 itself carves this out, making its discretionary language subject to anything "otherwise required by law, including Section 15657.5."

So the same set of facts, pleaded two ways, can produce a fee award that is up to the judge or a fee award the judge is directed to make. In a case where the property recovered is modest and the litigation was long, that distinction can be worth more than the penalty.

The penalty does not shrink because the wrongdoer cannot pay

In March 2026, the Fourth District, Division Two decided Moramarco v. Nowakoski, case No. E084620, and published the part that answers a question defendants raise constantly.

Nowakoski was an attorney who drafted a family trust, became successor trustee, and then failed to account to the beneficiaries for three years after the settlor's death. By the time the probate court reached the penalty, he was disbarred and told the court he had no realistic ability to pay: Social Security income, no employment prospects, and a residence he owned with his wife. He asked the court to treat that as mitigation.

It could not. Section 859, the court held, "imposes a strict and mandatory penalty structure" once the two conditions are met, and "the probate court has no discretion regarding the calculation of the amount of the statutory penalty." The statute is silent on mitigating factors, in contrast to penalty statutes elsewhere in California law that expressly direct courts to weigh a defendant's assets, liabilities, and net worth. Inability to pay is not a defense to the size of a section 859 penalty.

Worth noting that the probate court added it would not have reduced the penalty even if it could have, viewing the financial evidence as a snapshot in time.

What to do

1. If you are a beneficiary who suspects a taking. Get the title history and the bank records before you accuse anyone. Recorded deeds are public; account records usually require the trustee's accounting or a subpoena. Date every transfer against the settlor's decline, because the timing is what separates a gift from a taking. If the settlor was 65 or older, evaluate the elder financial abuse route early, since it changes both your proof burden and your fee exposure.
2. If you are a trustee holding property someone else claims. Section 850 runs in your direction too. You can petition to bring property back into the trust rather than waiting to be sued over the shortfall, and a trustee who sits on a known claim has a different problem, which our article on trustee fiduciary duties covers.
3. If you are the person accused. Separate the two questions immediately, because they have different answers. You may well have to return the property regardless of your intent. The penalty is a distinct fight about your state of mind, and Levin shows it is winnable even after a finding of undue influence. What will not work is arguing that the number is too large for you to pay.
4. If the property is real estate, move quickly on the title. Property that has been sold to a third party is a materially harder recovery than property still standing in the wrongdoer's name. Securing the status quo is its own decision, and we have written separately on when a lis pendens belongs in a trust dispute.

Two related questions come up often enough to flag. Removing the person is a separate petition with separate standards, covered in how to remove a trustee in California. And if the theory is that the document itself was procured improperly, start with how California courts analyze undue influence, because that finding is the predicate for one of the three routes above and, on its own, is not enough for the penalty.

Talk to a Los Angeles trust litigation attorney

The Darvish Firm's Los Angeles trust and estate litigation attorneys represent beneficiaries, trustees, and personal representatives in section 850 recovery petitions, section 859 penalty claims, elder financial abuse matters, and trust accountings. Call (310) 677-3512 or request a consultation.

This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Every case depends on its facts. Consult an attorney about your specific situation.