REMOVAL OF TRUSTEE
A named trustee of living trust has an absolute right to act as the trustee. In addition, a trustee of the living trust may resign during the administration of trust. The resignation may require consent of settlor and/or beneficiaries of the living trust. Also, in certain circumstances, a court order is required for trustee's resignation.
Settlor and/or beneficiaries of a living trust have the right to file a petition with the court to remove the trustee of a living trust and to replace the trustee with another qualified trustee. The removal of trustee may be for the followings:
1. Breach of trustee’s duties.
2. Failure of the trustee to pursue the claims of trust against third parties.
3. Failure of trustee to defend claims by third parties against the trust.
4. Failure of trustee to recover assets of trust.
5. Trustee's lack of capacity.
6. Hostility between trustee and beneficiaries.
7. Hostility between the co-trustees.
The lawsuit against the trustee must be by verified petition in the probate department of court. Generally, the beneficiary has the burden of proof in action against the trustee. The beneficiaries of trust must prove that the trustee has the fiduciary duty, and that the trustee has failed to perform the required act. However, the exception to the rule may be that the trustee obtained an advantage in a transaction between the trustee and beneficiaries. In that case, the burden of proof shift to the trustee and the trustee must prove that he or she did not take advantage.
If the trust allows it, the trustee may defend the lawsuit against him by showing that he or she has acted in good faith. The trustee may also be relieved of liabilities if he or she could show that the act was with the consent of beneficiaries, or that the beneficiaries have approved the trustee’s act. In such cases, however, the trustee must show that the beneficiaries were given full disclosure before their consent, or before their approval of the act.
In addition to the rights of beneficiaries of trust to remove the trustee, the beneficiaries may file lawsuit against the trustee to enforce their other rights against the trustee.
The statute of limitations to file a lawsuit against the trustee is generally three years. However, other factors may affect the statute of limitations.
For more information call us at (310)553-5562.
A named trustee of living trust has an absolute right to act as the trustee. In addition, a trustee of the living trust may resign during the administration of trust. The resignation may require consent of settlor and/or beneficiaries of the living trust. Also, in certain circumstances, a court order is required for trustee's resignation.
Settlor and/or beneficiaries of a living trust have the right to file a petition with the court to remove the trustee of a living trust and to replace the trustee with another qualified trustee. The removal of trustee may be for the followings:
1. Breach of trustee’s duties.
2. Failure of the trustee to pursue the claims of trust against third parties.
3. Failure of trustee to defend claims by third parties against the trust.
4. Failure of trustee to recover assets of trust.
5. Trustee's lack of capacity.
6. Hostility between trustee and beneficiaries.
7. Hostility between the co-trustees.
The lawsuit against the trustee must be by verified petition in the probate department of court. Generally, the beneficiary has the burden of proof in action against the trustee. The beneficiaries of trust must prove that the trustee has the fiduciary duty, and that the trustee has failed to perform the required act. However, the exception to the rule may be that the trustee obtained an advantage in a transaction between the trustee and beneficiaries. In that case, the burden of proof shift to the trustee and the trustee must prove that he or she did not take advantage.
If the trust allows it, the trustee may defend the lawsuit against him by showing that he or she has acted in good faith. The trustee may also be relieved of liabilities if he or she could show that the act was with the consent of beneficiaries, or that the beneficiaries have approved the trustee’s act. In such cases, however, the trustee must show that the beneficiaries were given full disclosure before their consent, or before their approval of the act.
In addition to the rights of beneficiaries of trust to remove the trustee, the beneficiaries may file lawsuit against the trustee to enforce their other rights against the trustee.
The statute of limitations to file a lawsuit against the trustee is generally three years. However, other factors may affect the statute of limitations.
For more information call us at (310)553-5562.