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3 times beneficiaries may want to remove a trustee

On Behalf of | Jan 6, 2022 | Estate Planning

Trust administration is largely a boring and technical job. A trustee has to manage resources and distribute them to beneficiaries when appropriate. However, especially if a trust includes significant resources, there is a possible motive for someone to misuse their authority. It is also possible for someone’s mistakes or failures as a trustee to directly impact the inheritance or financial resources of other people.

As the beneficiary of an estate, you will usually have an amicable or professional relationship with the trustee. However, there are a few situations in which you may need to ask the courts to remove them from their role.

When they don’t comply with the trust documents

A trustee is a human with their own feelings and relationships. Sometimes, a trustee may let their own opinion influence how they perform their duty. They might bend the rules for one beneficiary or enforce them too strictly for someone else.

If you believe that the trustee’s personal feelings have started to impact how they do their job and manage the trust’s resources, that might be a reason to challenge their role and potentially ask the probate courts to replace them.

When they seek to personally profit off of their position

A trustee has a fiduciary duty to the beneficiaries of the trust. They should make informed decisions about how they managed trust assets and seek to preserve, if not maximize, the resources of the trust.

Unfortunately, some people will use their position as a way to make money for themselves or other people. They could hire their spouse’s business to serve as a property manager for the trust, charging more than fair market value for the services provided. They might sell trust assets to themselves for a fraction of the price that they would command on the open market and then resell them for a profit.

Trustees abusing their position for personal gain could face challenges and lose their role.

When they are not capable of managing trust assets

Some people have good intentions but simply make mistakes because they are not organized or educated enough to take proper care of complex assets, like a business or an investment account. If a trustee’s mistakes or their incompetence has negatively affected the value of trust assets, those mistakes could give beneficiaries grounds to challenge them.

Simply being frustrated with the trustee’s pedantic approach to the administration process or delays in a payout won’t be reason to challenge a trustee. However, when they fail in their duty or violate their obligations to you or the trust, you may be in a position to ask the probate court to intervene and protect your inheritance. Knowing the rules that apply to trusts and their administration can help you protect yourself and your inheritance.