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How to Remove a Trustee from a Revocable Trust

Trustee Removal is an option for beneficiaries or heirs who feels the Trustee has either threatened or has taken action against the terms of the Trust. One reason is self-dealing, as opposed to having the best interests of the beneficiaries. A beneficiary will usually find counsel due to the complexity of the nature of removing a Trustee. 

How do you remove a trustee from an irrevocable trust

With an irrevocable trust, you must get written consent from all parties, i.e., the trustor (trustmaker), beneficiaries, etc. The issue remains, however, that it may have to go to probate court to change the trustee.

Probate Topics, Probate Litigation 

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How to Remove a Trustee from a Family Trust

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Trustee Removal is an option for beneficiaries or heirs who feels the Trustee has either threatened or has taken action against the terms of the Trust. One reason is self-dealing, as opposed to having the best interests of the beneficiaries. A beneficiary will usually find counsel due to the complexity of the nature of removing a Trustee. 

Note: Judges take trustee removal very seriously, thus having all your evidence, expert witnesses such as accountants, subpoenaed documents, etc., is crucial. Therefore, proper procedures are necessary to convince the judge that it’s worth the time and effort to remove the Trustee. 

One factor to remove a Trustee is based on conflicts. For example, if there are a Trustee and Co-Trustee and cannot get along, the beneficiaries can petition the courts to remove one or both. When removing a trustee, there has to be a threat or actual irreparable damages to the Trust. Such actions can be a misappropriation of trust funds, embezzlement, and lack of transparency.

Reasons for Trustee removal?

The list for removing a Trustee from a Trust is as follows:

  1. Self-dealing is when a Trustee puts their interest in front of the beneficiaries, e.g., self-dealing, and is a reason for removal.
  2. Misappropriation of trust funds: When a Trustee, for example, borrowers from the Trust, and fully expects to pay it back, the misuse of the Trust can be grounds for removal. Cannot use the Trust as a piggybank.
  3. Hostility toward Beneficiaries: When the Trustee cannot get along, its best for the Trust to have a Trustee who is fully transparent and not allow hostility to enter into the administration process.
  4. Conflict of Interest: If the Trustee sells an asset from the estate and found it was sold under-market to a friend or themselves, for example, one can show there was a conflict of interest.
  5. Failure to comply with Trust terms: As a beneficiary, you can receive a copy of the Trust. If it’s evident that the Trustee is failing to act in the wishes of the grantor/trustor or on time, a beneficiary can petition the courts of trustee removal.

Please note, it’s all about staying transparent and living up to their fiduciary duty. Once you discover any wrongdoing, you can petition to force the Trustee to file a Formal Account

You will need to have a valid reason with supporting evidence before even attempting to remove a trustee from a revocable trust.  

If you live in California and are considering removing the Trustee, you have to make sure you are on the right side of the courts. What does this mean? It means that as a beneficiary or heir, you understand the process of a Trust administration process, allowing the Trustee to respond within a reasonable time frame. To petition to remove a Trustee must be based on a breach of fiduciary duty.

With that said, 

WHEN CAN I CONTEST A TRUST IN CALIFORNIA?

You see, when the settlor/ grantor is alive, the Trust is “revocable,” meaning it can be changed anytime as long as the settlor/grantor is still living. Once the settlor/ grantor dies, then the trust instrument becomes irrevocable straight away, and no changes can be made to the Trust. It’s at this point where you need to begin gathering the evidence as there are statutes of limitations. At this time, a successor trustee enters into the picture to manage the estate.  

The successor trustee has a fiduciary duty to the beneficiaries to keep abreast of all changes, including receiving a copy of the Trust. Note: There are many time limits. Therefore, consult an estate planning attorney for the best outcome.

There are times when a Trustor was married and later divorced and has a Trust. Then, the trustor remarries and creates another Trust and takes into consideration his/her “blended family.” The question arises, which is the primary document, and this is the bone of contention. 

Takeaway: Many times, there is an “in Terrorem” clause, which states that anyone who contests the Trust can be eliminated from the Trust moving forward.

Here at Hess-Verdon, we counsel clients on various aspects of estate disputes. Such as investigating potential claims, evaluating the merits of bringing a claim, filing or defending a claim, and when necessary litigating a claim through trial or settlement.

With our expert team of trust litigators, in many instances, we can settle such proceedings without going to trial after taking into account the merits of the positions advanced by the respective parties and the tax rules applicable.  

Rest assured, the Hess-Verdon team is here to help you. Unlike some other law firms, we are a full-service firm. Handling thousands of probate and trust litigation cases helps us know exactly steps are crucial for your situation.

WHEN CAN I CONTEST A TRUST IN CALIFORNIA?

 You see, when the settlor/ grantor is alive, the Trust is “revocable,” meaning it can be changed anytime as long as the settlor/grantor is still living. Once the settlor/ grantor dies, then the trust instrument becomes irrevocable straight away, and no changes can be made to the Trust. It’s at this point where you need to begin gathering the evidence as there are statutes of limitations. At this time, a successor trustee enters into the picture to manage the estate.  

The successor trustee has a fiduciary duty to the beneficiaries to keep abreast of all changes, including receiving a copy of the Trust. Note: There are many time limits. Therefore, consult an estate planning attorney for the best outcome.

There are times when a Trustor was married and later divorced and has a Trust. Then, the trustor remarries and creates another Trust and takes into consideration his/her “blended family.” The question arises, which is the primary document, and this is the bone of contention. 

Takeaway: Many times, there is an “in Terrorem” clause, which states that anyone who contests the Trust can be eliminated from the Trust moving forward.

Here at Hess-Verdon, we counsel clients on various aspects of estate disputes. Such as investigating potential claims, evaluating the merits of bringing a claim, filing or defending a claim, and when necessary litigating a claim through trial or settlement.

With our expert team of trust litigators, in many instances, we can settle such proceedings without going to trial after taking into account the merits of the positions advanced by the respective parties and the tax rules applicable.  

Rest assured, the Hess-Verdon team is here to help you. Unlike some other law firms, we are a full-service firm. Handling thousands of probate and trust litigation cases helps us know exactly steps are crucial for your situation.

File a Lawsuit to Recover Assets

As an Executor or Trustee, one fiduciary duty is to protect from the theft of estate assets. Therefore, you may have to obtain a court order from the probate judge to have missing items returned from a sibling stealing from the Trust.

If you have sufficient documentation or testimony, and the assets have not been returned, you will need to seek counsel from a Trust & Estate Litigation Attorney

What Happens when the Executor or Trustee is Stealing from the Estate?

When a Trustee is stealing from a Trust, i.e., possibly forged documents, you must act within 120 days after the Trustee gives a beneficiary notice under probate court section 16061.7. Once the mailing the announcement, the clock starts from there. If the notification is never sent, then the statutes of limitations to contest the Trust remains open indefinitely. Take note that you have 120 days to review all documents and challenge the Trust or Will if there is a disagreement with any documents, amendments, etc. Fraud and forgery are forms of stealing where people call and say, “my brother cheated me out of my inheritance.” Don’t allow yourself to be the person who says, “my inheritance was stolen.” You are against a time table to act! Find a Trust litigation attorney who has in-depth knowledge and help you contest the matter.

Take away:  You as a beneficiary still have your right intact if you find any misappropriation of trust funds. If there is stealing from an Executor or Trustee, the 120 days rule does not apply. If, however, the “stealing” occurred through forging of documents, and you were given notice yet did not act, you are unable to contest the Trust. 

File a Lawsuit to Recover Assets

As an Executor or Trustee, one fiduciary duty is to protect from the theft of estate assets. Therefore, you may have to obtain a court order from the probate judge to have missing items returned from a sibling stealing from the Trust.

If you have sufficient documentation or testimony, and the assets have not been returned, you will need to seek counsel from a Trust & Estate Litigation Attorney

What Happens when the Executor or Trustee is Stealing from the Estate?

When a Trustee is stealing from a Trust, i.e., possibly forged documents, you must act within 120 days after the Trustee gives a beneficiary notice under probate court section 16061.7. Once the mailing the announcement, the clock starts from there. If the notification is never sent, then the statutes of limitations to contest the Trust remains open indefinitely. Take note that you have 120 days to review all documents and challenge the Trust or Will if there is a disagreement with any documents, amendments, etc. Fraud and forgery are forms of stealing where people call and say, “my brother cheated me out of my inheritance.” Don’t allow yourself to be the person who says, “my inheritance was stolen.” You are against a time table to act! Find a Trust litigation attorney who has in-depth knowledge and help you contest the matter.

Take away:  You as a beneficiary still have your right intact if you find any misappropriation of trust funds. If there is stealing from an Executor or Trustee, the 120 days rule does not apply. If, however, the “stealing” occurred through forging of documents, and you were given notice yet did not act, you are unable to contest the Trust. 

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