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What can make a no-fault trustee removal valid?

On Behalf of | Apr 22, 2024 | Estate Planning |

Establishing a trust can be challenging, especially when the settlor has no idea what will happen in the future. At some level, they may be able to foresee problems and scenarios, helping them create a setup that can stay applicable for a long time. Other times, the beneficiaries could exercise their rights provided by law, mainly when the settlor has already passed away, leaving the trust in the trustee’s hands.

This option can apply to situations where the trustee is no longer fulfilling their duties adequately. Under these circumstances, the beneficiaries can take legal action and request the trustee’s removal. However, can they do the same if the trustee made no violations? If that is the case, it is called a no-fault removal, which can only be valid if it meets the following conditions:

  • Over time, the circumstances changed significantly, making the trustee’s removal a reasonable course of action.
  • The option of removing the trustee proves to be in the best interests of all beneficiaries.
  • The beneficiaries requested the removal, and the court determined a suitable person to become the successor or co-trustee.
  • The decision to remove the trustee is in line with the trust’s material purpose as planned by the settlor before death.

Without one or more of these components, the court may not have enough basis to grant the trustee’s removal. Because of these conditions, a no-fault removal is often an option that only becomes viable in specific situations.

Making trust plans for the future

If you intend to include a trust in your estate plan, consider seeking legal counsel even before establishing it. When creating a trust, you often need to look farther into the future even if you are no longer in it. Some decisions involving your trust, such as your trustee appointment or other details, may not be appropriate after you pass on. By incorporating foresight into your plan, you could be taking off some burden from your surviving family’s shoulders, allowing them to grieve the loss and support each other during this difficult time.