Trustee Removal Actions: Drafting Trust Provisions to Define and Limit Power to Remove Trustees
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Estate Planning
- event Date
Wednesday, May 16, 2018
- schedule Time
1:00 PM E.T.
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE course will provide estate planning counsel and fiduciary advisers with a thorough, practical guide to the process and challenges of removing a trustee from an irrevocable trust. The panel will discuss structuring considerations for trust drafters to outline the circumstances under which a beneficiary or co-trustee may remove a trustee, detail the role of trust protectors in exercising trustee removal powers, and describe the judicial processes under which a beneficiary may remove a trustee.
Beneficiary actions to remove a trustee are among the most common challenges faced by fiduciaries. If the trust document is silent or insufficiently detailed about the circumstances and processes for removing a trustee, then the parties seeking to remove a fiduciary must navigate various state statutes and conflicting provisions of the Uniform Trust Code. Absent clear trust document guidance, trustee removal actions can deplete trust resources and produce unwanted results.
A surprising number of trust documents do not contain specific portability provisions defining when beneficiaries or co-trustees may remove a trustee from serving. In the case of corporate trustees, the grantor’s intent and the trustee’s exercise of power may not be aligned.
Beneficiaries often rely on language in the trust document that permits broad modification as grounds to replace a trustee. However, this approach conflicts with Section 706 of the UTC, which allows removal of a trustee if all qualified beneficiaries agree, removing the trustee serves the best interest of all beneficiaries, and it is not inconsistent with a material purpose of the trust.
Estate planning counsel can avoid messy trustee removal actions by specifying when the beneficiaries and co-trustees (if applicable) may remove a named trustee. Estate planners and fiduciary advisers should have a thorough grasp of the rules governing when a trustee may be removed to anticipate potential pitfalls.
Listen as our experienced panel provides a practical guide to structuring trust documents to minimize the risks of contested trustee removal actions, and to navigating the process of removing a trustee.
- Statutory and UTC provisions for nonjudicial removal of a trustee
- Recent cases involving trustee removal actions not for cause
- Unique issues involved in removing corporate trustees or co-trustees
- Granting trust protectors power to remove trustees
- Structuring trust provisions to set boundaries for beneficiaries’ ability to oust trustees
The panel will review these and other key issues:
- Uniform Trust Code provisions on modification of trusts and how they relate to Section 706
- Various major state provisions on trustee removal
- Balancing protection of beneficiaries vs. empowering trustees
- Drafting tips to define removal powers
- Corporate and successor trustees
- Determining circumstances for removal of a trustee for cause
