Removing a successor trustee is possible, and generally requires filing a petition for removal, while working with a trust litigation attorney. For trust litigators, a common question is whether a successor trustee can be removed or replaced. Successor trustees don’t always manage the trust effectively, or respect the grantor’s true wishes. Sometimes successor trustees will try to disinherit heirs or engage in self-serving practices that violate their fiduciary duties. Other times they simply neglect their administrative duties or make unwise investment decisions. In such cases, it may be possible to have the successor trustee replaced by filing a petition for removal with the probate court.
Can I remove a successor trustee?
Maybe, if the successor trustee has mismanaged the trust or engaged in misconduct or neglect. Many modern trusts appoint what’s called a trust protector. The trust protector usually has authority to remove and replace a successor trustee at will. Beneficiaries and co-trustees usually don’t – but may have – have authority to remove a successor trustee themselves. If the trust protector will not do it for them, or there is no trust protector, and the beneficiaries and co-trustees don’t have the authority either, then a petition for removal will have to be filed with the applicable probate court. Most of the time, it is beneficiaries and co-trustees who seek to have a successor trustee removed after the trust’s creator has already passed away or become incapacitated.
When can a successor trustee be removed?
A successor trustee may be subject to removal and replacement if:
-They have been negligent or engaged in some sort of misconduct. If a trustee has breached any of their fiduciary duties, they may be ousted from their post. Successor trustees are often removed for self-dealing, conflicts of interest, investment mismanagement, or failing to make proper distributions.
-The trustee failed to disclose material information or provide a full and accurate trust accounting as required by law.
-The trustee does not respect the original intent of the trust’s creator. This is often the case when a successor trustee tries to add or subtract a beneficiary, or makes amendments that aren’t in keeping with the grantor’s real wishes. .
-The trustee becomes incapacitated and can no longer perform their duties.
Can a trust protector remove a successor trustee?
Usually, yes. If a trust maker appoints a trust protector, that person or entity often has a right to remove a successor trustee or prevent their appointment. This can save beneficiaries and co-trustees the time and expense of going through the probate court. If a trust protector does decide to remove a successor trustee, they usually have the power to appoint a replacement. The trust protector is usually an impartial third party who is not a beneficiary of the trust, so their judgement is assumed to be more objective.
Can beneficiaries sue a successor trustee?
Yes, beneficiaries can sue a successor trustee, and they are usually the ones that do. A beneficiary may seek a successor trustee’s removal, demand that they compensate the trust for any losses they caused, or both. In some cases, an exculpatory clause in the trust may purport to protect the successor trustee from all liability, but unless the offensive behavior is specifically covered by that exculpatory clause the courts likely will protect the beneficiaries. Similarly, if a beneficiary signed a waiver of trustee liability when the successor trustee took over, it may not be enforceable if it was signed in return for a distribution.
Can I replace my sibling as successor trustee?
You may be able to replace a sibling as successor trustee if a court or trust protector orders it, or if the successor sibling voluntarily steps down. Many times, original trustors select their eldest or most responsible adult child to serve as successor trustee. But situations change, and sibling rivalry can rear its ugly head. Sometimes a sibling trustee withholds distributions out of spite or sheer apathy. Or maybe they were the best choice for successor when the trust was made, but they’ve became ill or incapacitated, or simply gotten too busy to perform their duties.
If a sibling successor trustee is negligent or has engaged in misconduct, and another sibling is well-equipped to take over, courts may sometimes order the switch. But where there is particularly bad blood between siblings, courts tend to select an impartial third party or institution as the replacement trustee, just to avoid further conflict in the future.
What is the legal process for removing a successor trustee?
If you want to remove a successor trustee, you will first need to consult a trust litigation lawyer.. Your attorney will hear the facts of your case, and determine whether you have legal standing and cause to seek removal of the successor trustee. If you do, your attorney will then file a petition for removal with the applicable probate court. A hearing will then be scheduled, and a judge will hear both sides’ arguments before rendering a verdict. If the judge decides to remove the successor trustee, a replacement trustee will be appointed. Depending on the facts of the case, the court may also award compensatory damages and/or attorney’s fees and costs.
Sometimes, a settlement agreement can be negotiated outside of court. A successor trustee may decide to step down voluntarily rather than face potentially catastrophic personal liability if they lose at trial.
Have questions? Give us call. Shoot us an email. The consultation is always free.
Call (424) 320-9444 or Email [email protected]
About RMO Lawyers
RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit https://rmolawyers.com/.
