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What Is A Role Of A Trustee?


What Is A Role Of A Trustee?

Simply put, a trustee legally owns the Trust. The ultimate goal is the disbursement of funds to the beneficiaries. The trustee is responsible for fulfilling the grantor’s last wishes. 

Probate Topics, Probate Litigation 



What Is A Role Of A Trustee?

Simply put, a trustee legally owns the Trust. The ultimate goal is the disbursement of funds to the beneficiaries. The trustee is responsible for fulfilling the grantor’s last wishes. During the trust administration process, the trustee may not show preferential treatment or obtain financial gain. The beneficiaries should be made aware of what is the role of a trustee. The trustee is responsible for:

  • Notifying the beneficiaries that they are going to inherit.
  • Providing the beneficiaries with a copy of the Trust and all of its amendments.
  • Inventory of the assets.
  • Liquidation of assets.
  • Providing accounting reports to the courts.
  • Disbursing funds to the beneficiaries in a timely manner.

Beneficiary Expectations

The beneficiaries expect to receive their inheritance in a timely manner. The beneficiaries need consistent communications throughout the trust process. The beneficiaries have the right to contest a trust within the first 120 days after receiving a notice that they will inherit. After that time, they can contest the Trust if they suspect that the trustee is misappropriating funds or not holding up to their fiduciary duty. The beneficiaries can also request a trustee be removed. The courts will require absolute proof before they will remove or replace a trustee. It is also possible that a beneficiary is also the named trustee.

Appointment Of New Trustees

Trustees are typically chosen by the grantors when the trust instrument is created. If this is not possible, the courts may appoint a new trustee. The courts may ask the beneficiaries who they want as trustee. If the courts need to select a new trustee, they may ask the bank where most or all of the assets are held to administrate the Trust. The trust lawyer who helped the grantor set up the Trust can assist when there is a need for new trustees’ appointment. 

Appointment Of Trustee Form

When a new trustee is appointed, they will need to fill out an acceptance of appointment form. This form will help them open a new bank account to place all the grantor’s assets. The new bank account allows the trustee to keep all the trust funds separate from their personal funds. Individual accounts keep the trustee from accidentally commingling funds. A trust attorney can help you establish the form so that you have all the paperwork you need. The appointment of trustees and acceptance forms are essential when a new trustee is appointed. 

Appointment And Removal Of Trustees

Although we always hope that a trustee will uphold their fiduciary duties throughout the trust process administration, there are times when the removal of a trustee is necessary. Since a Trust cannot move forward without a trustee, a new trustee will need to be appointed. A new trustee can take the form of an outside source who all the beneficiaries so choose. It might take the form of one of the trustees. In other circumstances, the courts might appoint the new trustee. Both an appointment and removal of trustees are commonplace. 

A trustee may be removed if:

  • The trustee misappropriates funds.
  • A trustee does not appear to be fulfilling their fiduciary duties.
  • The Trust is contested on the grounds of the grantor not being of sound mind.
  • It is believed that the trustee is appointed due to undue influence on the grantor.
  • The trustee fails to communicate with the beneficiaries.
  • There is a conflict between the trustee and beneficiaries.
  • The trustee has a conflict of interest with the Trust.
  • There is a conflict due to the trustee beneficiary status.
  • The trustee fails to respond to court requests for information.
  • The trust administration is taking too long.

As a trustee, you should seek legal counsel if you are accused of any of the above actions. The trustee has the right to seek counsel for guidance and have the legal hours billed to the Trust. 

Removal Of Trustee

The removal of a trustee requires intervention from the courts. There needs to be sufficient proof that the trustee is not performing their duties. The courts are strict as removing a trustee will drag out the administration of the Trust. In certain circumstances, charges may be filed against the trustee in addition to their removal from their position. If you are faced with a removal action that you believe is not appropriate or the charges are false, contact a trust attorney for guidance.

How Legal Counsel Can Help

The trust administration process is serious business. As a trustee, you are the legal owner of that Trust. One of the rights you have as a trustee is to seek legal counsel whenever you need guidance. It is a good idea to have legal counsel standing by throughout the trust process. Any actions that change trustees will serve to stretch out the trust process. This delays the beneficiary rights of timely disbursement. You can complete a trust administration by sticking to the Trust’s rules and avoiding removal by doing so. You should also seek guidance if you are a newly appointed trustee who needs to sign their acceptance to the trustee form appointment. 

Trustee and Co-Trustee Conflict

When there is a conflict between the trustee and co-trustees, then the beneficiaries may petition to remove one or both in court, but again, it takes court action, which costs a lot of time and a lot of money. Even then, you may not know how the court will rule in the house hotel intervene in the trust affairs. Therefore it may not go as planned.

Are you a Trustor?

If you are a trustor, then you may want to consider having the Trust name the co-trustees to act independently that is, act alone without both signatures. Logistically, if the trustees can work independently, then the trust administration process can be completed on time. For example, if a trustee goes out on vacation or is incapacitated, the other trustee can continue with only one signature needed to get everything completed and distribute the estate to the beneficiaries.

Take into consideration under California probate code section 15620 should be unanimous action to c0-trustees unless otherwise provided in the trust instrument. Your estate planning attorney should insert a particular language specifying and allowing for actions by one or the other co-trustee.

What is Unanimous Action

If the specific wording is not included in the original trust instrument or an amendment, then section 15620 requires “Unanimous action.” One can consider this as a majority rules clause.

When Co-Trustee Don’t Agree

What happens if the co-trustees can’t agree? If the co-trustees cannot agree, then any of them can file a petition for instructions under California probate code 17200, which will ask a judge of the superior court to guide the co-trustees. When a co-trustee petitions for instructions, all co-trustees and beneficiaries should be notified.

Trustee & Co-Trustee Not Getting Along


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