Estate of Ashlock: Bad-Faith Estate Misappropriation Can Trigger Double Penalties in California – California Legal Guide | CPT Law

California Legal Implications: Bad Faith Actions Trigger Severe Financial Penalties

A recent ruling in the California Court of Appeal serves as a stark warning to individuals managing estate assets. In the case of *Estate of Ashlock*, summarized in this court opinion, the court affirmed that individuals who misappropriate estate property in “bad faith” face severe financial consequences. The court ruled that the wrongdoer must return the stolen property and pay an additional penalty equal to twice the value of that property, effectively resulting in triple damages., the court affirmed that individuals who misappropriate estate property in “bad faith” face severe financial consequences. The court ruled that the wrongdoer must return the stolen property and pay an additional penalty equal to twice the value of that property, effectively resulting in triple damages.

For California families, trustees, and beneficiaries, this case highlights the critical importance of fiduciary duty and the severe statutory penalties designed to protect estate assets from theft and fraud.

Understanding California Probate Code Section 859

The core of this legal dispute revolves around California Probate Code Section 859, often referred to as the “double damages” statute. This law is designed to punish those who wrongfully take, conceal, or dispose of property belonging to a specific estate, trust, or conservatorship., often referred to as the “double damages” statute. This law is designed to punish those who wrongfully take, conceal, or dispose of property belonging to a specific estate, trust, or conservatorship.

To trigger these penalties, the court must find that the individual acted in bad faith. This means the act was not merely an administrative error or a misunderstanding, but rather an intentional act of wrongdoing or dishonesty.. This means the act was not merely an administrative error or a misunderstanding, but rather an intentional act of wrongdoing or dishonesty.

The Math of Misappropriation Penalties

Prior to *Estate of Ashlock*, there was some legal ambiguity regarding how these damages were calculated due to conflicting case law (specifically a conflict between *Conservatorship of Ribal* and *Estate of Kraus*). The *Ashlock* ruling clarifies the calculation method used by the courts, favoring a stricter interpretation against the wrongdoer.

Under this ruling, the financial liability is calculated as follows:
1. Restitution (Section 856): The wrongdoer must return the original misappropriated property (or its value).
2. Penalty (Section 859): The wrongdoer must pay a separate penalty equal to twice the value of the recovered property. The wrongdoer must pay a separate penalty equal to twice the value of the recovered property.

In the *Ashlock* case, the individual misappropriated approximately $5 million. The court ordered the return of the $5 million, *plus* a penalty of $10 million. This resulted in a total liability of $15 million.

The Importance of Fiduciary Selection

This case underscores the vital importance of selecting trustworthy fiduciaries (trustees, executors, or personal representatives). When creating an estate plan, choosing the right person to manage assets is the first line of defense against misappropriation. (trustees, executors, or personal representatives). When creating an estate plan, choosing the right person to manage assets is the first line of defense against misappropriation.

Conversely, for beneficiaries who suspect that an executor or trustee is stealing from an estate, this ruling provides a powerful tool for recovery. It ensures that bad actors cannot simply return what was taken if caught; they face ruinous financial penalties that serve as a deterrent and a means to make the estate whole.

About This Case

Source: Estate of Ashlock: Bad-Faith Estate Misappropriation Can Trigger Double Penalties in California

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Legal Disclaimer

This article is for informational purposes only. Consult with a qualified California estate planning attorney for advice specific to your situation.

About the Author: Dustin MacFarlane, Esq.

California Licensed Attorney | Estate Planning Specialist

Dustin MacFarlane is the founder of California Probate and Trust, PC, with over 15 years of experience in estate planning, probate administration, and trust law. Licensed by the California State Bar, Dustin has helped thousands of California families protect their assets and plan for the future.

CA Bar License: Active | Practice Areas: Estate Planning, Probate, Trust Administration | Location: Granite Bay, CA

Why Estate Planning Matters in California

California has unique estate planning laws that differ significantly from other states. Without proper planning, your assets may not pass according to your wishes, and your family could face unnecessary probate court proceedings.

A comprehensive California estate plan typically includes:

• A revocable living trust to avoid probate
• Pour-over will as a safety net
• Advance health care directive
• Durable power of attorney for finances
• Beneficiary designations on retirement accounts and life insurance

How Trusts Work in California

California’s trust law (Probate Code Division 9) governs how trusts are created, administered, and terminated. Understanding these rules is essential for effective estate planning.

Key benefits of California trusts:

• Avoid probate: Assets in a properly funded trust bypass California’s lengthy probate process
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