In a revocable or irrevocable trust document, one of the most important appointments involves the trustee. The trustee is the person that the grantor or settlor wishes to handle all matters involving his or her trust, including assets and debts.
The trustee is also responsible for safeguarding the money within the trust for the protection of the beneficiaries. The trustee is normally given fairly wide discretion, but in some extreme circumstances, the trustee may need to be removed to protect the beneficiaries. However, what are these grounds for removing a trustee?
Failure to Comply with the Terms of the Trust
One of the reasons a trustee could be removed is if he or she did not follow the terms provided within the trust. A trustee is the individual who is given legal control and management of the assets within the trust, but with this responsibility comes the duty to guard them for the benefit of the trust beneficiaries.
If the trustee deliberately disobeys or fails to follow the terms of the trust and does not act within the best interests of the beneficiaries, the beneficiaries can petition the court to have the trustee removed.
Mishandles or Neglects Trust Assets
In addition, the trustee is under a fiduciary duty to manage the assets in the trust in a manner that does not deplete the trust or waste the assets. If the trustee is handling them in a way that causes them to deplete unnecessarily, the beneficiaries have a cause of action to sue to remove the trustee. If the trustee acts irresponsibly with the assets due to negligence or trustee incompetence, they can also petition to remove the trustee.
Along the same lines of mismanaging the trustee assets, if the trustee begins to use the power given to him or her under the trust document to his or her own benefit and not in the best interests of the beneficiaries, the court may also be able to remove the trustee, as this is a clear violation of the trustee’s fiduciary duty.
Removal for Good Cause
Sometimes, the trustee and beneficiaries simply do not get along or do not agree on how to handle the trust terms, especially if the two parties are related. In these situations, beneficiaries can petition the court to remove the trustee for good cause.
However, the beneficiaries have a high standard to meet when proving their case, and they must give reasonable and compelling evidence to the court to show the removal needs to happen. The beneficiaries should also anticipate the trustee defending the case and asking for legal fees should the beneficiaries not be successful.
Trust contests can be rather complicated, and the legal costs associated with removing a trustee can be high. It is for this reason that it is almost always recommended that the beneficiaries considering filing a petition, contact an experienced attorney to be advised of the pros and cons associated with filing a case.
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