Individuals set up trusts for a variety of reasons. Some do it to protect a loved one’s eligibility for government benefits. Others do so to keep their assets from being overtaxed. Some do it so they can more easily transfer property to their heirs without it passing through probate.
It’s the role of the trustee to administer the trust according to the trust owner’s wishes. If they don’t, they can be removed from their role.
Once a trustee has been appointed to manage a trust, they can only be removed from their role in certain situations. The best place to look if you’re wondering if they can be removed is in the trust administration documents. Those documents should describe who can take action to remove a trustee from their role and reasons for their potential removal.
A probate court judge will have to step in and make a decision about the trustee’s removal if the trust documents don’t contain a removal clause. A beneficiary, co-trustee, settler or owner of the trust are all authorized to file such actions with the court.
The probate judge will generally use the Uniform Trust Code (UTC) to decide whether a trustee’s removal is warranted. The UTC outlines several instances in which it may be appropriate for a trustee to be removed from their role.
If the trustee fails to make decisions that are in alignment with the settlor’s wishes, they may be accused of a breach of trust. If a trustee fails to provide a beneficiary with information, mishandles funds or unjustly enriches themselves more than others, then this may result in their removal.
It’s the responsibility of the trustee to take steps to protect the value of the assets contained in the trust. If they fail to do this, then they may also be removed from their role.
If a trustee lacks the necessary knowledge to administer the trust or they become sick, their removal may be warranted.
Removing a trustee from their role isn’t easy. Beneficiaries, co-trustees and others initiating such a cause must adequately justify why it should occur. A trust litigation attorney here in Melbourne can review your case and advise you of the next steps that you should take.
