Two things will get a Trustee removed quickly: death and stealing.  By stealing I mean really stealing—like tens or even hundreds of thousands of dollars missing or misappropriated. 

But what about Trustees who violate their fiduciary duties but haven’t (1) died, or (2) stolen large sums of money?  Those Trustees can be harder to remove from office.  You as a beneficiary may believe, for good reason, that a Trustee is acting improperly and should be removed.  In fact, a large numbers of private Trustees fail to meet their fiduciary duties primarily because they don’t know what those duties are (see our earlier post on this topic).  But assembling the necessary evidence and arguments to justify removing a Trustee before the Court can be tricky and time consuming.

A client of mine told me that Trustee removal seems to be a case of death by a thousand lashes.  In other words, the removal must be supported by building a case using as many fiduciary violations as you can find.  After a good number of violations are assembled, then you have a shot at Trustee removal.  This does not mean that it is hard to hold a Trustee liable for his or her breaches.  Finding that a Trustee is personally liable for a given breach can be easier than having the Trustee removed.

In my experience, it can be hard to remove a Trustee because the Court puts a good deal of emphasis on the Settlor’s choice of that Trustee in the first place.  Also, many Courts are reluctant to suspend or remove a Trustee temporarily, absent death or substantial stealing, because they don’t want to “shoot from the hip.”  This means that the Trustee removal issue must go to trial where proper evidence can be presented by both parties to determine if removal is warranted.

Under the California Probate Code, Court’s have wide discretion to remove Trustees.  Removal can be based on the following grounds:

  1. Any provision in the Trust document for removal (some Trust’s will specify a removal procedure),
  2. Where a Trustee has committed a breach of Trust (again must have a number of examples of this to be effective, absent death or substantial stealing),
  3. Where the Trustee is insolvent or unfit to administer the Trust (a loose standard to show a Trustee is “unfit”),
  4. Where hostility or lack of cooperation among Co-Trustees impairs the administration of the Trust,
  5. Where the Trustee fails or declines to act,
  6. Where the Trustee’s compensation is excessive under the circumstances,
  7. Where the Trustee is the same person who drafted the Trust (or related to the person who drafted the Trust).

Many times beneficiaries will focus on one item, such as where a Trustee has committed a breach, and think that the one occurrence they have witnessed is sufficient for removal.  But if the Court is reluctant to force removal (which most Court’s are), then how big of a breach does it have to be to justify removal?  That depends on the facts of the case.  The more examples you have of a Trustee breaching his duty, and the more severe each example is, the more likely you are to obtain Trustee removal.  Hence, the death by a thousand lashes.  On the other hand, if you have one big breach, then that single lash may be enough to rid the Trustee from office.

  • karen minassi

    In our family trust my mother is still alive, in her 80’s and not mentally able to understand financial matters , my sister had been the co-trustee with her and is now trustee.There were several income properties for the trusts’ benefit. I believe my sister took rental monies from two of the properties and used these for herself. I had noticed that it didn’t appear that these funds were being deposited in my mothers trust account. When I confronted my sister about it she just blew up and claimed up never showing any evidence of depositing these funds to me.

    One of the properties was a beach house that my family has own for 50 years . It has 99% of the time been used as an income rental property . Generating monthly winter rental and then weekly summer rental each year .It always was a good money maker.
    This situation of my sister not showing income on the beach house property went on for the 5 years that she was a co trustee , again my mother was co trustee with her but she was out of it mentally.
    So I started to ask the trust attorney to look into this for me. She never would . I pleaded with the trust attorney to give an accounting of the rental income and to have my sister show proof of deposit into the trust bank account. This never happened . Finally my sister came up with the excuse that she didn’t rent it out but instead had decided to use it for her own family use each summer. Now should I ask the courts to suspend her?

  • You certainly should consider your options, which could include suspension, removal and requesting a formal Trust accounting. Your options may be limited while your mother is alive, so you should consult an attorney to determine how to proceed–it can be a bit tricky until after your mother’s death.

  • Betty Lun

    My stepfather is the trustee of my moms Trust. Me and my brothers are the beneficiaries. My step father has take almost 500,000 out of our trust. But he says there isnt anything we can do because my mom signed a No-Contest. Is this true? Please he

  • I wrote an article on that very issue because I see Trustees making that same statement all the time and its just not accurate. Watch out Trustees, your actions are subject to review regardless of a no-contest clause.

  • Brenda

    Thank you so much for getting back with me. I had read your article and it was great. I live in Texas. The other problem is that it states in the trust “The trustee(which is him) may from time to time so mch or all the corpus of Trust C to or benefit of the Troutors Spouse in such and manner as Trustee may determine to be necessary or appropriate for the HEALTH,MAINTENANCE and SUPPORT accordance with his station in life, taking into consideration any other sources of support (both principal and income). So this is why he says he can get out as much as he needs. He does have his own money at least a millon. Doesnt he have to use his money first? Also do you know what the law is on No Contest in Texas. I have looked everwhere for that answer. Again Thank you for the little people who know nothing.

  • There are definitely issues you need to iron out with the Trust. But I can’t speak to Texas law or how this all would be handled in Texas. I can say that California law is unique when it comes to No-Contest clauses, but it’s possible that Texas law is similar. Also, in California it depends on the Trust terms whether a surviving spouse can receive assets from the trust before depleting his or her own assets. I would recommend that you consult with a Texas lawyer to see what your rights are there. Wish you the best of luck.

  • lisa

    This was good info. Thanks for your website. My father died 45 days ago in California, his place of residence. My half-sister, trustee, has yet to provide me with a copy of the trust. I have asked for this info. I do not know what assets were in the trust. Can I ask the court to force her to give me a copy of the trust AND an accounting of the trust assets? She told me verbally that I am co-beneficiary. Meanwhile she has emptied his house and carted away contents in a moving van, no inventory provided. This to me is indicative of how she plans to handle the rest of his estate.

  • If you are in California you can ask both for a copy of all Trust documents, and all Wills, and for an accounting; provided you are a beneficiary of the Trust. It takes a Petition that must be fully noticed, but there is a procedure and the Trustee will be ordered to comply.

  • My wife’s mother left a house. There are four heirs. Her part was put in Trust. There was mediation in which. A settlement agreement was made. Due to the hostility they signed. An agreement to buy her out. Also to give her part outright and not in Trust. At this time she chose not to take the buyout. There was no mention if she declined the buyout. That the settlement agreement is void. The Trustee refuses to abide by the agreement. Unless she agrees to the buyout. The offer was to low, the house is under Section 8. She doesn’t want my wife to have. Anything to do with the house. My question, is the agreement still valid. Although she didn’t take the buyout ?

  • That’s a hard question to answer. Depends on what the settlement agreement said and what the parties intended when they entered into the settlement agreement. It is possible that the agreement is still valid, but I can’t say for sure without seeing the agreement and understanding more of the facts.

    This is a good example of how tricky settlement agreements can be to draft because you have to think of all the various contingencies that could occur after the deal is made.

  • Deenna Baer

    In my mother’s will, I was gifted $$, my sister is trustee and shorted me the full amount of my money saying that when my mother’s life ins was distributed she should have gotten the full amount instead of it being divided 3 ways.

    I talked to the life ins people and they said that the form they used to divide up the life ins. was a legal form. There was another form but was not legal and the life ins co. had sent paperwork stating such and a form to have this corrected but the life ins co. never was sent an amended form so they used the legal one to disburse the life ins.

    I just received a check from my sister with the life ins that I received a few months ago taken out of my amount that was gifted me from my mother.

    I talked to the life ins about receiving the paperwork that they told me about over the phone but I need to have a court order to get that paperwork from them since I am not the trustee.

    So can i get this paperwork from the life ins. co and then submit it in court to get the rest of my money that was gifted me from my mother’s will and if so how do I go about it?

    • davidsonkeitha

      If you are in California, you first have to file a petition in probate court asking the court to order your sister to distribute the rest of your money. Once you have an open case number in court, you can subpoena the life insurance company and obtain the documents you are looking for.