If you want to decline to serve as trustee, complete and sign a declination to serve as trustee document and deliver it to the successor trustee. Consultation with a trust administration attorney in your area would be adviseable.
Typically a notarized resignation is sufficient. The Trust itself can also have a clause describing how a Trustee must resign (for example, providing notice and to whom). But yes, once resigned the successor Trustee would become the new Trustee unless the Trust specifies another method of appointing the new Trustee.
Serving as an executor or trustee is a significant responsibility that requires careful consideration. While there are benefits, such as personal satisfaction and potential compensation, there are also drawbacks, including time commitment, emotional strain, and potential legal liability.
To act unanimously - Trustees must act unanimously unless the trust deed says otherwise. To act carefully and distribute assets correctly – for example, in a life interest trust, the trustees must distribute any income to the life tenant beneficiaries but still preserve the value of the capital for any remaindermen.
Sometimes this can also include a Trustee Resignation Form that you can get from your attorney or the Court. You will then need to complete and sign the form in the presence of a notary public. You'll also want to make copies of your resignation documents for the trust, the court, and your own records.
Declining to Administer a Trust
The position must be formally accepted if you want to do the job. If a reasonable amount of time passes, and the named trustee does not accept, the court will consider them to have rejected the job.
Ultimately, trustees can only withdraw money from a trust account for specific expenses within certain limitations. Their duties require them to comply with the grantor's wishes. If they breach their fiduciary duties, they will be removed as the trustee and face a surcharge for compensatory damages.
Naming the same person as trustee and beneficiary can be problematic. Not only can it lead to a trustee and beneficiary conflict of interest, but it can make it difficult for the trustee to uphold their duty to treat all beneficiaries equally.
Common Breaches of Trustee Duties in California. Too often, trustees breach their duties. Some of the most common ways they do this include breaches of trust, funds misappropriation, poor management, fraudulent acts, failure to act, and engagement with a competitor.
In general, the steps to this process are: The trustee must send a written notice to the beneficiary to vacate the real property. Under California law, if the beneficiary has been in possession of the property for less than a year, then a 30-day notice is sufficient.
After one or more missed Chapter 13 payments, the trustee may file a “motion to dismiss for material default.” This is another way of saying that they can't pay your creditors since you haven't paid the trustee.
Reasons for removing a trustee
They may reach the end of their term of office. They may choose to step down. Their circumstances may change in a way which stops them from continuing their role.
Typically, the grantor, or the one who sets up and funds the trust, cannot remove a trustee without the granted permission of all others involved. In these cases, a request may be filed with the probate court either by a co-trustee, a beneficiary, or by the probate court itself under certain circumstances.
Examples of executor misconduct and trustee misconduct include: Failing to provide accountings to beneficiaries. Favoring one beneficiary over another. Misappropriating or misusing estate or trust assets for personal gain. Commingling personal assets with those of the estate or trust.
If the trustee is not paying beneficiaries accurately or on time, legal action can be taken against them.
The answer is a resounding yes. The ability to seek removal and replacement of a trustee is one of your most important rights as a trust beneficiary.
Yes, a trustee can go to jail for stealing from a trust, if they are convicted of a criminal offense. In California, embezzling trust assets worth $950 or less is a misdemeanor crime that can be punished with up to a 6-month sentence in county jail.
Trustees can be held personally liable for any harm caused by their actions or inactions, leading to costly legal fees to defend themselves and potentially to pay other parties legal fees. Reputational Risks: As its name states, being a trustee means having been invested with a high level of trust.
If the trust is irrevocable, you need to have the consent of all of the adult beneficiaries of the trust in order to resign. The law also allows you to petition the court to accept your resignation as trustee.
Experience and Knowledge. Another key consideration is whether the individual or entity is qualified to act as trustee. If the trust has substantial assets, an individual with experience managing significant assets or with a background in finance or investments may be better suited to the role of trustee.
If a rogue trustee is failing in their duties then either their fellow trustees or beneficiaries of the trust can request that a trustee voluntarily steps down. As long as there are enough trustees remaining then the trustee can simply retire or else they can appoint someone else in their place before stepping down.
The California probate code outlines the responsibilities of trustees in managing and fairly distributing assets to beneficiaries. Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months.
While a probate court is empowered to remove one co-trustee, it is a difficult challenge. California's Probate Code Section 15642 provides in part that a “trustee may be removed in accordance with the trust instrument, by the court on its own motion, or on petition of a settlor, cotrustee, or beneficiary under Section ...