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Guide to Removing a Trustee

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One of the most important decisions when creating your estate plan is naming an honest and dependable trustee. It is the trustee’s job to administer, for the sole benefit of the beneficiaries, the trust.

A dishonest trustee can readily steal all your hard-earned assets. Sometimes, problems may occur which make the beneficiaries of the trust seek the removal of the trustee. Problems might be caused by dissatisfaction with an accounting of the trust, or the trustee’s failure to hand over requested information.

Reasons for Removal of a Trustee 

Removal of a trustee revolves around the trust documents and applicable California State laws. Typically, a trustee may be removed for any of the following reasons:

Violating the trust terms is the main reason trustees are removed. This could include violating any of the grantor’s conditions.

Failing to do the required accounting or reporting is grounds for removal. All trustees are obligated to account for their activities related to the trust. Failing to provide a truthful report of the information requested by beneficiaries is grounds for removal.

After a trustee becomes incapacitated, he or she can be removed. Incapacitation could be the result from abusing alcohol or drugs. Also, various health or medical problems may lead to incapacitation.

Fiduciary duties are owed to the beneficiaries by the trustee. This means that the trustee is obligated to act in the best interests of the beneficiaries as well as the trust. For example, self-dealing may include selling property of the trust at a big discount.

Theft of any trust property is a direct violation of the fiduciary duties and grounds for immediate removal of the trustee.

Ways to Remove a Trustee

Most trusts contain the process for removing a trustee in the trust documents. For instance, trust documents often state that a trustee may be removed through a unanimous vote by the beneficiaries. Or else, beneficiaries may be required to petition the court to make a determination.

In situations where the documents do not specifically address the removal process, the trustee can still be discharged for his or her duties by petitioning the probate court. The judge can order the trustee to be removed in situations where he or she has breached fiduciary duties, breached the trust agreement, or is unsuitable to continue serving as the trustee.

Holding the Trustee Liable for Damages

Beneficiaries may hold the trustee liable for damages to the trust, which is called a surcharge. The surcharge is ordered by the court, and requires the trustee to pay back any damages caused by the trustee.

It is important to know the exact reason(s) for the surcharge. If the damages caused by the trustee are unclear, a petition can be filed to make the trustee to do a formal account of the trust. Beneficiaries should be able to determine if there are any issues based on the accounting.

Get Help with Your Trust

Creating a trust can be a difficult task. The Feldman Law Group is here to help you establish a valid trust that avoids probate, and enables you to properly manage and distribute your assets.

If you are having problems with the trustee, Walnut Creek estate planning attorney Aaron Feldman can help remove him or her and work with the court to make sure that the trustee is held liable for any and all damages.

Contact us online or call now at 925-283-6691 to discuss the specific details of your trust and/or trustee.

Resource:

leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=15642&lawCode=PROB

https://www.feldmanlawgroup.com/preventing-potential-family-conflicts-with-your-estate-plan/

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