How to Remove a Trustee from a Family Trust

Removal by the trustor

A trust agreement should state the circumstances under which a trustee may be removed by the trustor.

Trust agreements usually allow the trustor to remove a trustee, including a successor trustee. This may be done at any time, without the trustee giving a reason for the removal. To do so, the trustor executes an amendment to the trust agreement.

In an irrevocable trust, the trustor cannot remove a trustee, as is possible in a revocable trust. 

Removal by co-trustee or beneficiaries

Although trustees have some discretion in managing trust assets, trust agreements usually give the trustees some degree of guidance as to how the assets should be managed, as well as the reasons and procedures for removing a trustee. State law also provides guidelines about a trustee's duties and responsibilities, which involve what is known as the trustee's fiduciary duty, or the obligation to follow the terms of the trust agreement and to act in good faith and in the best interests of the beneficiaries.

Legal grounds to remove a trustee may include:

• Violating the requirements of the trust agreement
• Mismanagement of trust assets, either intentionally or negligently
• Fraud or misappropriation of trust assets
• Self-dealing or conflict of interest, such as a trustee purchasing assets from the trust for their own benefit, especially if the purchase is for less than fair market value
• Charging excessive fees
• Inability to cooperate with the other trustees or to get along with the beneficiaries
• Mental incapacity of the trustee
• Financial insolvency of the trustee, such as when the trustee has filed for bankruptcy

Removal by trustee

A serious conflict between co-trustees can lead to one or more seeking to remove another. If the trustor is still alive, the trustees should express the problem to the trustor and ask that the other trustee be removed. If the trustor is deceased or incapacitated, the trustees should convey the problem to the beneficiaries and ask the beneficiaries to join in seeking removal.

The matter is more complicated if any beneficiary is a minor or is not specifically named, such as when beneficiaries are designated as the children of a certain person rather than as named individuals. The trustees seeking removal may also file a petition for removal, as discussed below.

Removal by beneficiaries

Trust agreements commonly have provisions that allow beneficiaries to remove or replace a trustee. Usually, a majority vote of the beneficiaries is required. Often, the trust agreement provides that a trustee may only be removed for cause. Beneficiaries seeking removal of a trustee may also need to file a petition for removal, as discussed below.