Serving as a trustee is a responsibility that can last for years. The trustee named by the person who created and funded the trust has to oversee the management of trust resources and the distribution of those assets to beneficiaries in accordance with the trust documents.
They may need to make decisions about the investment of capital and the maintenance of physical assets. Their services are crucial for the protection of beneficiaries. Unfortunately, not all trustees consistently and appropriately fulfill their obligations.
Some of them struggle with their obligations or violate their duty to trust beneficiaries. In those scenarios, it may be necessary to remove a trustee from their position by taking the matter to probate court. The following types of situations are examples of scenarios that may justify probate litigation to replace a trustee?
Inaction or incompetence
Trustees have to consistently manage the resources contained in a trust, communicate with interested parties and make distributions as appropriate in a timely fashion. Maybe the trustee struggles with time management because they have their small children. Maybe they have a very demanding career. If trustees fail to handle their obligations in a timely fashion, removing them from their position may be necessary. Similarly, if they prove incompetent by making poor asset management choices or letting others manipulate them, they may not be fit to continue serving in their role.
Challenges in their personal life
Sometimes, people face challenges that raise questions about their continued service as trustee. Perhaps they have a major medical battle ahead, such as treatments for late-stage cancer. Maybe they currently face charges for a significant criminal violation or may be subject to a sentence of incarceration after entering a guilty plea. Perhaps they have relocated out of the state. They may even have decided to file for personal bankruptcy. Any of those challenging personal situations could compromise a trustee’s ability to fulfill their obligations.
A breach of fiduciary duty
A trustee has a fiduciary duty to beneficiaries. They should do their best to manage and even improve the value of trust resources so that beneficiaries receive as much as possible from the trust. Self-dealing and embezzlement are both ways that people may put their own enrichment ahead of what is best for beneficiaries. They might also allow their relationships with certain beneficiaries to influence their conduct. They might put their own wishes ahead of the instructions provided by the trustor. When a trustee fails to follow trust instructions or uphold their fiduciary duty, removing them might be the best option.
Taking action to remove a trustee can help preserve resources for beneficiaries and uphold the intentions of the trustor. Probate litigation intended to replace a trustee may ultimately be the best decision for those concerned about trust administration.