Some trustees only have to fulfill their responsibilities for a specific amount of time. They manage trust assets until they have distributed them according to the instructions of a trustor or oversee personal resources for vulnerable older adults during their golden years.
Other times, trustees may retain their authority indefinitely. Some trusts can exist for multiple generations. They can control assets ranging from financial resources and businesses to real estate. The trustee may have the authority to sell or manage resources. They can approve distributions to beneficiaries and make decisions about how they invest trust resources.
Occasionally, the beneficiaries of a trust may have concerns about the conduct or competence of a trustee. Removing them and replacing them with someone else may be the best option in that scenario. However, a trustee may not agree to resign.
When is it feasible to involuntarily remove a trustee from their position?
After they cause major losses
In scenarios where there is evidence of a trustee mismanaging resources, beneficiaries can seek their removal. In fact, if beneficiaries question a proposed transaction involving trust resources, they could seek to remove the trustees to prevent them from completing the transaction and diminishing trust resources. Both incompetence when managing trust resources and embezzlement could justify the removal of a trustee from their position because they have cost the trust money.
After they become unable to do the job
Managing a trust may require the regular evaluation of assets and other routine tasks. Sometimes, the person previously serving as trustee has personal issues that prevent them from continuing to do their job well. Incarceration or hospitalization could leave a trustee incapable of continuing to perform their role. Personal instability, including bankruptcy, could also raise questions about their ability to continue managing trust resources. In cases where the trustee has experienced a negative change in circumstances, the courts might agree to replace them with a different trustee.
After they fail to do their job
Some trustees accept their position and then fail to follow through on their obligations. They might not secure or properly manage trust resources. They might ignore distribution requests from beneficiaries. The failure to engage in trust administration responsibilities can warrant an individual’s removal from their position.
Initiating trust litigation can potentially help preserve what assets remain in the trust. Those concerned about the conduct of a trustee may need to seek their replacement before a trust suffers major losses. Beneficiaries can sometimes ask the courts to replace a trustee with a specific person, multiple co-trustees or even a professional fiduciary.