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Do you have valid grounds for removing a trustee?

On Behalf of | Jan 23, 2022 | Estate Planning

The relationship between the person appointed to be a trustee and the beneficiary the trust they’re overseeing may not always be a friendly one. Often a particular trustee is chosen, at least in part, because they’re strong enough to stand up to pressure from the beneficiary or other family members and abide by the terms of the trust that the deceased person laid out.

Of course, trustees can have other responsibilities, like making sure that the trust assets are invested wisely so they can grow and provide years of income. That’s one reason why people sometimes choose professionals outside the family to be trustees.

What does the removal clause say?

If you’re considering seeking the removal of a trustee, it’s crucial to understand the terms of the trust and the law. Many trusts have a removal clause that designates the conditions that allow a trustee’s removal and who has the authority to remove them. It may also designate a successor trustee to replace them.

If the trust doesn’t give you clear legal grounds for having a trustee removed and the trustee won’t voluntarily step down, you’ll need to go to a probate court if you still believe they need to be removed. That’s why it’s important to know what state law says.

What does New York law say?

Under New York law, a trustee whoviolated or threatens to violate his trust.” They can also be removed if they are “insolvent or whose insolvency is imminent or…for any reason is…unsuitable to execute the trust.”

Typically, a trustee is removed if they have violated their fiduciary duty to the beneficiaries. This often involves taking trust assets for themselves. Not providing beneficiaries with the information to which they’re entitled on the value or health of the trust can be a sign that the trustee has violated their duty. 

Trustees can also be removed if they aren’t administering the trust effectively. This could include neglecting the assets or making poor investment choices. If their actions (or negligence) have caused the trust to lose a significant amount of money, that can be grounds for removal. Removing a trustee isn’t (and shouldn’t be) a simple procedure. If you believe you have grounds for removing a trustee, it’s crucial to have legal guidance.