Once limited only for the exclusive domain of the ultra-wealthy, family trusts have become a lot more common. Even families with relatively modest amounts of wealth can take advantage of a trust to avoid the expense of probate, address long-term planning goals, and mitigate taxes.
However, every trust must have a trustee, someone who is in charge of making sure that the trust is properly managed and funds dispersed as they should be. Unfortunately, not every trustee (no matter how carefully chosen) is up to the job.
Who Can Petition to Remove a Trustee?
Every trust is governed by a trust agreement, and that agreement will spell out who founded and funded the trust (often known as the grantor), who benefits from the trust, and who is designated as a trustee, co-trustee, or successor trustee (in case something happens to the original trustee).
Generally speaking, the only people who can initiate proceedings to remove a trustee are the trust's grantor, its beneficiaries, and any co-trustees. In fact, if the trust was set up as a revocable trust, the grantor can remove a trustee at any time, for any reason. If the trust was set up as an irrevocable trust, the grantor gave up their right to make changes without filing a lawsuit. And, naturally, if the grantor of the trust is deceased, then the beneficiaries or co-trustees will have to take legal action.
What Situations Call for the Removal of a Trustee?
Most of the time, motions to remove a trustee center on the trustee's failure to uphold their fiduciary duty, which is a primary obligation in order to act in the best interests of the trust and its beneficiaries. Here are some examples of reasons that call for the removal of a trustee:
- Failing to uphold the trust's basic requirements regarding disbursements
- Mismanaging the trusts funds, whether that's through willfulness or by being inept
- Charging fees that seem excessive for their time and efforts managing the trust
- Self-dealing, such as handling aspects of the trust in a way that gives them a personal benefit
- Conflicts of interest, such as personal obligations that would interfere with their duties or create biases
- Money issues, such as when the trustee has defaulted on personal loans or filed for bankruptcy
- Mental health issues, drug addiction, or alcoholism on the part of the trustee
- Fraud or other misappropriation of the trust's funds in any fashion
Ultimately, if you find yourself questioning whether or not you need to take action to remove a trustee, it may be time to speak to a probate litigation attorney.