A trustee who has accepted the trust may resign only by one of the following methods: (a) As provided in the trust instrument. (b) In the case of a revocable trust, with the consent of the person holding the power to revoke the trust.
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.
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.
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.
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.
But generally, the trustee is entitled to use trust funds to pay for things like: Funeral and burial expenses for yourself or a trust beneficiary. Expenses related to properties included in the trust, such as repairs or property insurance. Repaying any debts owed by your estate when you pass away.
Serving as the trustee of a trust instills a person with significant power. They have access to all the trust assets, but with a catch: They can only use those assets to carry out the instructions of the trust.
Can a Trustee renounce their role? A Trustee can choose to renounce their role – they could also be incapable at the time they are needed. This is an advantage of appointing multiple Trustees, as if one Trustee is unable to act, the other(s) can step in.
After being nominated, a trustee may decline to serve but cannot decline after accepting, nor delegate the responsibility.
Once appointed, trustees have numerous rights and responsibilities. However, they typically do not have the right to quit being a trustee without approval. A trustee who fights against their removal can lead to a long, drawn-out court battle that sucks money directly from the trust.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
Generally, assets in a revocable trust, including houses, should be distributed or sold within 12-18 months.
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.
Yes, you can resign at any time. In the case of a continuing trust you may be required to help find a replacement trustee.
If the trustee is not paying beneficiaries accurately or on time, legal action can be taken against them.
Trustees are personally liable for all decisions they take in that capacity, and their liability is not automatically limited to the value of the trust fund. Typically, the trust deed will limit trustees' liability in some way and these clauses should be checked, as well as any existing trustee insurance.
The trustee generally has the authority to withdraw money from a trust to cover the cost of third-party professionals, as well as any other expenses arising as a result of administration.
A A Trustee is disqualified 'as Trustee' upon his death, loss of his legal competence, removal from trusteeship, liquidation, rescinding his licence or declaring his bankruptcy. The Trust shall then be transferred to the other Trustees in case of multiple Trustees, unless the Trust Instrument provides otherwise.
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.
Yes. The bankruptcy trustee will look at your bank account.
Whether a particular individual has standing to sue a trustee for a certain reason may vary by jurisdiction, but beneficiaries almost always have standing to sue. A large part of a trustee's responsibility is prudently investing the trust funds. Most state laws contain prudent investment standards for trustees.
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.