Trustee Removal, Suspension, Resignation

Trustees have an important responsibility in trust administration matters, and failing to uphold these responsibilities can result in a trustee being removed or suspended. In any case, these matters are complex, and our attorneys at RMO can provide valuable guidance in the process.

What is Trustee Removal, Suspension, or Resignation?

Trustee removal, suspension, or resignation occurs when a trustee is removed from their position in managing a trust, either through a legal contest or voluntarily. Under a revocable trust, the person who created the trust can remove a trustee. In an irrevocable trust, the trustee can often be removed through a majority vote from the beneficiaries, depending on the trust.

Removal or suspension of a trustee can occur for a variety of reasons, including a trustee becoming incapacitated or violating their fiduciary duty by mismanaging trust assets or ignoring the terms of the trust.

Under California and Texas law, a trustee can also resign from their position voluntarily if they follow the terms of the trust instrument, or they petition a court for permission to resign as trustee.

There are special circumstances and grounds that must be in place to justify a trustee removal or suspension, so it can be helpful to have the support of an attorney in this process. Our team at RMO Lawyers offers guidance and representation to clients seeking trustee removal to protect a trust.

What Do Trustee Removal, Suspension, or Resignation Entail?

Cases of trustee removal, suspension, or resignation require specific processes to follow under the law. Our lawyers can provide support in navigating all the following steps surrounding removal, suspension, or resignation.

Legal Basis and Authority

Trust creators, also known as settlors, co-trustees, and beneficiaries have various rights under the law that warrant their ability to petition for a trustee removal.

In California, trustees can be removed based on Cal. Probate Code §15642. This can happen through the trust’s terms, court action, or if a settlor, co-trustee, or beneficiary petitions under Section 17200.

Here are some reasons a trustee might be removed under the code in California:

Breach of trust.
If the trustee is unfit or insolvent.
If conflict among co-trustees hampers trust administration.
If the trustee refuses to act.
If the trustee’s compensation is too high for the circumstances.
If the sole trustee falls under certain categories, unless it’s clear the settlor wanted them to continue, without fraud or undue influence. Exceptions to this include if the trustee is related to the settlor or if the settlor consults an independent attorney who confirms the trustee’s choice.
The trustee is significantly unable to manage the trust’s finances or perform duties properly. This isn’t proven solely by occasional negligence or mistakes, especially if the trustee can revoke the trust.
If the trustee is significantly unable to prevent fraud or undue influence.
For any other valid reason.

Under Tex. Prop. Code § 113.082, a trustee in Texas can be removed according to the terms outlined in the trust instrument. Alternatively, upon the petition of an interested party and after a hearing, a court has discretion to remove a trustee and withhold some or all of their compensation if:

The trustee materially violated or attempted to violate the trust terms resulting in significant financial loss to the trust.
The trustee becomes incapacitated or insolvent.
The trustee fails to provide the required accounting.
The court finds other valid reasons for removal.

It’s essential to seek guidance from an attorney when considering these codes for trustee removal. Trust law is intricate, and the application of these statutes depends on the specific details of your case. An attorney can analyze your circumstances comprehensively, ensuring your rights are protected and implementing effective legal strategies

RMO’s attorneys can provide guidance on whether your case has legal backing to justify trustee removal or suspension.

Fiduciary Duties and Standards

Trustees have several duties to follow under the law. If trustees fail to uphold these fiduciary duties and maintain proper conduct, beneficiaries may have grounds to call for the trustee’s removal or suspension. A few examples of the trustee’s duties include administering the trust according to the terms of the instrument, treating all beneficiaries fairly, abstaining from using the trust for their own benefit, and others. RMO can help assess whether fiduciary duties have been violated and determine whether a case is justified.

Beneficiary Rights and Protections

Beneficiaries have special rights and protections in their relationship to the trust agreement and have the right to petition for trustee removal in instances where they feel a trustee has violated their duties. Our lawyers at RMO will represent beneficiaries to uphold their rights and protect their interests in a trust.

Common Trustee Removal, Suspension, Resignation Scenarios

A trustee removal, suspension, or resignation can occur under a variety of circumstances, often to protect the interests of the trust. At RMO Lawyers, we support clients in all the following scenarios.

Grounds for Trustee Removal

Grounds for removing a trustee are outlined in Cal. Probate Code §15642 and Tex. Prop. Code § 113.082 as outlined above.

Situations that can arise and result in grounds for trustee removal include mismanaging trust property, charging excessive fees, having conflicts of interest with trust assets or a beneficiary, committing fraud, and being unresponsive, among others. In situations of a breach of trust, RMO Lawyers can provide support in the next steps.

Suspension of Trusteeship

A suspension of trusteeship may be necessary if a trustee does not uphold their fiduciary duty or engages in misconduct. A judge may support a suspension of a trusteeship while leaving the need for trustee removal for further discovery. Our lawyers at RMO can help trustees and beneficiaries navigate the process of petitioning for a trustee suspension.

Trustee Resignation

Under Cal. Probate Code §15640, a trustee may resign through procedures outlined in the trust instrument, securing consent from the appropriate person in a revocable trust, receiving consent from each adult beneficiary in an irrevocable trust, or securing a court order.

Under Texas Property Code § 113.081, a trustee can resign in line with the trust’s terms or by petitioning the court for permission to resign. The court has the authority to accept the resignation and relieve the trustee from their duties, ensuring the protection of the rights of other interested parties through appropriate terms and conditions.

RMO Lawyers can offer support for trustees looking to navigate this process properly.

When Should I Contact An Attorney For Trustee Removal, Suspension, or Resignation?

Trustee removal, suspension, and resignation are all complex processes. An attorney can be an excellent resource for offering guidance and answering questions along the way. Because the removal or replacement of a trustee impacts the trust, several parties can benefit from the support of an attorney.

You should contact an attorney for trustee removal in the following scenarios:

A trustee has failed to uphold their fiduciary duty
You are a trustee looking to resign from your role
A trustee becomes incapacitated or vulnerable to undue influence
You are unsure if a trust allows for trustee removal
You are a trustee interested in defending yourself from removal

If you have any questions about the trustee removal, suspension, or resignation process, schedule a free consultation with RMO Lawyers. Regardless of whether you are a trustee or a beneficiary in a trust, our team can provide valuable guidance surrounding the removal or replacement process.

Our Case Results

RMO has a proven track record of protecting people and defending legacies.

Summary Adjudication of Disinherited Beneficiary’s Trust Contest

Swiftly secured the dismissal of a trust contest of a disgruntled, disinherited trust beneficiary on a motion after strategically allowing the trust contest period to expire before serving a notice of proposed action to distribute trust assets to the trust’s remaining beneficiaries and nothing to the disinherited beneficiary.

Secured Family’s Business Legacy

Representing the successor family trustee, secured the generational family business for the decedent’s heirs by acquiring from a disgruntled beneficiary their interest in the family business on extremely favorable terms that will allow the family to continue operating the family business for future generations to come.

Defense of Financial Elder Abuse Claim Against Surviving Spouse Trustee

Successfully defended a surviving spouse trustee against financial elder abuse and other claims made by family members who said she had fraudulently transferred assets to herself from her late husband’s trust and estate.

Prevented Trustee Removal for Badly-Lawyered Trust Accounting

Staved off suspension, removal and surcharge for a trustee who had failed to properly or timely provide court-ordered trust accountings to trust beneficiaries and was staring down an imminent deadline, as well as suspension, removal and surcharge.

Trustee Removal for Fraud

Neutralized and secured removal of a hostile co-trustee who was attempting to bilk our client’s trust of millions of dollars through a series of fabricated claims.

Thieving Trustee Removed and Surcharged

Secured removal of a thieving co-trustee daughter whose malfeasance left her own mother destitute and unable to pay her bills, including recovery of the stolen assets, attorney fees and costs.

Trust Beneficiary Dispute Squashed & Partition Avoided

Swooped in on behalf of an institutional trustee after years of protracted litigation to secure a decision from the Los Angeles probate court to end a years-long dispute between feuding siblings over the distribution of their parents’ estate, avoiding distribution of assets in-kind, which would have only resulted in partition.

Sub-Trust Allocations Defended

Client’s mother survived step-dad and succeeded him as trustee of their family trust. After mom passed, step-dad’s children alleged she had improperly allocated trust assets to favor her survivor’s trust, which went to our client, over the marital trust, which went to step-dad’s children. Using historic appraisals and valuations, demonstrated the disputed allocation was reasonable, resolving the dispute.

Inept Trustee Removed & Client Appointed Successor Trustee to Save Estate

Non-responsive and ineffective trustee who had done little to nothing to administer the trust or protect trust assets from waste following decedent’s passing was removed and our client appointed as successor trustee by the probate court, avoiding further damage.

Racist Trustee Removed and Surcharged

Removed and obtained surcharge of a non-beneficiary family trustee who hurled racial epthets at our client, refused to account, and tried to sell the house intended for our sole trust beneficiary client out of spite, securing the home for our client and her family.

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Who We Represent in a Trustee Removal, Suspension, or Resignation Case

A trustee removal, suspension, or resignation can affect multiple parties in a trust, including the trustee and the beneficiaries. RMO represents the following potential clients in cases surrounding a change in the role of a trustee.

TRUSTEES

Our lawyers can defend trustees who are being either forcefully removed or asked to step down. At RMO, we have a strong track record of successfully representing trustees in cases of removal or suspension. We’ll take the appropriate steps to defend the integrity of the trustee in cases where they have upheld their fiduciary duty.

CO-TRUSTEES

In cases of cooperation of co-trustees, one trustee may experience concerns with the actions or conduct of another. Our lawyers can represent co-trustees in calling for trustee removal to ensure they are able to properly administer the trust and preserve the integrity of the estate planning documents.

BENEFICIARIES & HEIRS

Beneficiaries and heirs have a direct interest in ensuring a trust is managed properly. These parties may develop concerns with the actions or conduct of a trustee. We can support beneficiaries and heirs in building a case for trustee removal by gathering evidence and presenting the facts to the court for removal or suspension.

SETTLORS

In the case of a revocable living trust, the person who created the trust has the discretion to remove the appointed trustee. Our attorneys can help settlors navigate the legal removal process outlined by the trust and offer guidance in the steps necessary to replace the trustee.

SCHEDULE A FREE CONSULTATION

Be advised that the RMO Client Relations Team will reach out prior to your scheduled time, as our policy requires that we gather additional information concerning the parties to your case before we can confirm your consultation. In the event that we are unable to reach you, regrettably, we will need to cancel your requested consultation.

Communication Disclaimer

Please note that communications by you to RMO LLP or any of its lawyers through this website do not create an attorney-client relationship between you and the firm. Do not send any privileged or confidential information to the firm through this website or otherwise until instructed in writing from us to do so.

FAQs About Trustee Removal, Suspension, Resignation

Who has the power to remove a trustee?

In most jurisdictions, a trustee can be removed by the court, by the terms outlined in the trust document itself, or by the beneficiaries of the trust, the trust maker, or co-trustee under certain circumstances.

Read the full article

What are the grounds for having a trustee removed?

The grounds to have a trustee vary in each jurisdiction. Seeking guidance from an attorney is crucial when contemplating trustee removal based on these codes. Trust law involves intricate nuances, and the interpretation of statutes relies heavily on the unique aspects of your case. An attorney can conduct a thorough analysis of your circumstances, safeguarding your rights and formulating the most effective legal strategies to navigate the complexities of the situation.

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