Is it time to remove a trustee?
The main purpose of a trust is to provide resources for loved ones. This can be done during life and after death, though it’s mostly associated with after death. A trust is an entity where a person manages their resources and shares them with next of kin, family and friends. There are all kinds of trusts, and many share real estate or family heirlooms, while others provide income to loved ones who need the assistance.
A trustee is the person in charge of the trust. You might create a trust as part of an estate plan, but it’s up to somebody else to carry out your wishes. A trustee might be an adult child, a spouse, an attorney, a banker or anybody else you choose.
The trustee’s role
Unfortunately, there are no guarantees that your trustee will act as instructed. Mismanagement of funds doesn’t just hurt your legacy. It hurts the beneficiaries who receive income through the trust. It’s possible that the trustee is dishonest, or maybe he or she is simply overmatched with the job or misunderstands the role.
When a trustee is hurting the cause, it’s possible to remove them. Depending on the trust, beneficiaries may have a say is the trustee’s role. Otherwise, beneficiaries can file a claim with probate court. If the trust’s creator is still living, he or she can also initiate the change.
Reasons for possible removal
Mismanagement is a broad term. There are a few core ways that a trustee might violate their role.
Failure to meet the trust’s terms – In its simplest terms, if a trustee isn’t fulfilling what is written in the trust there is cause for removal.
Mismanagement or neglect – When the trustee’s actions damage the trust’s overall value, whether through neglect or poor decision making.
Self-dealing – If a trustee uses the trust to his or her own benefit, including conflicts of interests, rather than following the trust’s terms.
Hostility toward beneficiaries – There are many high-profile examples of hostility, or communication breakdown between the appointed trustee and beneficiaries or heirs.
Good cause – This is a legal category to capture overlooked elements. In short, if beneficiaries have other reasons to remove the trustee, they are allowed to petition under reason of good cause.
The removal process
The purpose of any estate plan is to protect loved ones by sharing assets and their value. While a trust is an excellent way to do so, it’s possible that your choice to trustee won’t live up their role of managing it. If that should happen, the law provides resources to remove the appointed trustee to protect your original intent. Anyone with concerns about a trust or its management should consult with a probate litigation attorney to explore your options.