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to Each Client.

What happens when you don’t trust a trustee?

Trusts are very popular ways of making sure that an estate’s assets do the most good and fulfill a testator’s wishes over the long run. Having the right trustee to manage and administer a trust is, naturally, critical.

What happens, then, if you have lost faith in a trustee’s capacity to do their job? You can seek to have a trustee replaced – but only for good cause.

6 reasons it may be appropriate to ask for a trustee’s removal

There are numerous reasons to challenge a trustee and ask the court to replace them. Some of the most frequent issues include:

  1. They breach their fiduciary duty: Trustees are legally bound to act in the best interest of the beneficiaries of the trust. Any failure to manage the trust with care can constitute a breach of their moral and legal obligations. Examples include self-dealing, mismanagement of funds or poor investment decisions.
  2. There are conflicts of interest: Trustees must avoid any conflicts of interest that may compromise their ability to make impartial decisions. If a trustee has personal or financial interests that conflict with those of the beneficiaries, it could lead to decisions that prioritize their own well-being over their duty.
  3. They refuse to communicate: Transparency and open communication are important in trust administration. If a trustee fails to keep beneficiaries informed about the trust’s status, financial matters or any other relevant information, that’s a legitimate concern.
  4. They’re holding onto the assets too hard: One of the primary responsibilities of a trustee is to distribute assets to the beneficiaries per the terms of the trust. If a trustee unreasonably delays or refuses to distribute assets without a valid reason, beneficiaries may have grounds for challenging the trustee’s position.
  5. They won’t obey the trust: Similarly, trustees are bound by the terms and conditions laid down in the trust. While some trustees have a lot of discretionary power, they cannot use that power in a way contrary to the intentions or rules of the trust.
  6. They are not capable of the job: A trustee must possess the necessary skills and capacity to fulfill their duties effectively. If a trustee is incompetent or incapacitated, it can jeopardize the proper administration of the trust.

If you’re concerned about a trustee’s actions, it’s wise to get legal guidance. Swift action can help prevent a situation from escalating and causing real harm to a trust.

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