The Weekly Scenario: What Happens If My Trustee Fails to Follow the Terms of My Trust?
Question: What happens if my Trustee fails to follow the terms of my trust?
Answer: A Trustee is required to abide by the terms of a trust. If that Trustee fails to do so, a beneficiary of the trust is not without recourse.
One of the benefits of naming co-trustees is that they tend to hold one another accountable. Moreover, most trusts will provide a way for the beneficiaries to remove a Trustee and replace them with another Trustee (the next successor or someone else chosen in a specified manner).
If no specific provisions are made for replacement, a beneficiary could also petition the court to name a replacement and further, to review the acts of the Trustee.
Comment: It is a good idea in creating a trust to name successor trustees, assuming you know who you might name. However, just because a person is named, the individual trustee may refuse to accept the position or may resign from the position due to any number of reasons. Another option aside from family members or close friends as trustees is a corporate trustee.
As always, if you have any questions or would like to learn more, please contact Steve Shane at firstname.lastname@example.org or .
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Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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