October 2022

Under normal circumstances, a trustee of a trust is given broad latitude to manage the trust’s assets for the benefit of its beneficiaries. The trustee does this by managing the trust’s property and making decisions about how to reinvest trust assets. 

Trustees are generally required to act in the best interests of beneficiaries, but there are situations where removing a beneficiary from a trust is appropriate. 

For example, a beneficiary may be an adult child who has demonstrated poor financial judgment in the past, or it could be someone with drug problems or another serious issue that makes them unfit to continue as a beneficiary. 

Because trustees are fiduciaries with special responsibilities regarding trust beneficiaries, there are specific rules governing when and how they can remove beneficiaries from trusts.

The Basics of Trustee Removal Rights

Trustees are entitled to remove beneficiaries from a trust if there is a valid reason for doing so. The specific circumstances and conditions under which a trustee may remove a beneficiary vary according to the state where the trust is set up. 

In most cases, the trustee’s ability to remove one of the beneficiaries from a trust is subject to judicial review. However, in some states, the trustee can remove a beneficiary at any time, as long as he or she has a valid reason for doing so. 

Broadly speaking, the trustee’s right to remove is intended to protect the trust itself. Since trusts are meant to last indefinitely, trustees can use their removal rights as a last resort to protect the trust from someone who is endangering its long-term viability.

What Are the Reasons for Trustee Removal?

Trustees must have valid reasons for removing a beneficiary from a trust. Depending on the state where the trust is set up, trustees must have one or more of the following reasons to justify removing a person from a trust.

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When someone dies, they leave behind assets that need to be distributed to their beneficiaries. An executor or administrator is appointed in their will as the personal representative of their estate; this role gives them legal responsibility for the estate and its assets until they can be passed on to the beneficiaries.

Sometimes, a personal representative of an estate might not have the skills or time to complete their duties. When this happens, it’s necessary to have them removed from that position and appoint someone else in their stead. If you are named as a personal representative of an estate, it is important that you understand how much time and effort it might take from you before agreeing to take on the role.

Being a personal representative is a serious responsibility that you must take on only if you are prepared for the amount of work and time it will take from you. Ideally, you will find someone who is capable of doing the job but also has a close relationship with the family members of the deceased person in order to maintain a smooth transition and help the family members understand their inheritance. 

If the family members are unorganized and confused, it may be best to remove yourself as a personal representative until they are able to organize and clarify their thoughts. If the estate of the deceased person is confusing, it may be best to remove yourself as a personal representative until it is clear and easy to understand.

Call Doane & Doane to Speak with an Attorney

If you have questions about estate planning, call Doane & Doane today to speak with an experienced attorney. Our attorneys can help you navigate the complexities of the law and ensure that your assets are distributed according to your wishes. Visit our website today to schedule a consultation. You may also connect with us via our contact form.