Removing Problem Trustees for California Living Trusts
On behalf of Roger Buffington
One of the frequent questions asked of Buffington Law Firm’s trust and estate litigation attorneys is whether a successor-trustee of a revocable “living” trust can be removed by a court action. As discussed in recent Blog articles, California living trusts are designed to operate without court supervision. The notion is that after the trustors (the person or persons who created the trust, e.g. husband and wife) have passed away, one or more designated successor-trustees will have the power under the trust instrument to carry out the provisions of the written trust instrument. When this process works as the law intends it is often cost-efficient and quick, and avoids the cost of probate.
Unfortunately, it is quite common that a successor-trustee misbehaves in some way, such as failing to distribute trust assets timely or at all, or taking excessive trustee fees, or simply using trust assets for his or her own benefit. When this happens, the beneficiaries often want to know how difficult it is to remove the trustee. Few questions confront our Firm more often.
California Probate Code Section 15642 provides in part:
(a) A trustee may be removed in accordance with the trust instrument, by the court on its own motion, or on petition of a settlor, cotrustee, or beneficiary under Section 17200 .
(b) The grounds for removal of a trustee by the court include the following:
(1) Where the trustee has committed a breach of the trust.
(2) Where the trustee is insolvent or otherwise unfit to administer the trust.
(3) Where hostility or lack of cooperation among cotrustees impairs the administration of the trust.
(4) Where the trustee fails or declines to act.
(5) Where the trustee’s compensation is excessive under the circumstances. …
While this provision may look somewhat straightforward, the legal reality is different. Firstly, just as the Code section says, there has to be grounds for removal, and the burden of proof is on the beneficiaries to convince the Court that proper grounds exist. Almost invariably the Successor-Trustee can use trust moneys to pay for legal defense, while the beneficiaries often must reach into their own pockets to pay their attorneys. (Sometimes we can get a Court order distributing funds to the beneficiaries for this purpose, but not always.)
In practice Courts give considerable deference to the written appointment of the successor-trustee in the Trust instrument, and Courts are reluctant to remove successor-trustees. Getting the matter placed in front of a Judge at Hearing takes time and costs money. Very few trust instruments make a provision allowing beneficiaries to remove a trustee other than by Court action. Even when the instrument appears to make a provision for such, the successor-trustee may fight it, often causing considerable delay and legal expense to compel removal of the trustee or alternatively, quick dissolution of the trust. The bottom line: it is not easy to remove a successor-trustee absent pretty good evidence of sufficient grounds. Simply not trusting or liking the successor-trustee is not grounds, and few questions are more frequently asked than that one. Successor-Trustees are often family members, and it may be that there is a history of dislike, distrust, or conflict between the successor-trustee and some or all of the beneficiaries. This alone is rarely grounds for removal.
What Can Be Done?
It is not easy to remove a successor-trustee, but it can be done. Courts are becoming increasingly sensitive to the problem of bad-actor successor-trustees. Buffington Law Firm’s trust dispute attorneys have repeatedly succeeded in removing and replacing rogue trustees. It can be done and many times it must be done.
The Court’s main interest is whether it has been convinced that removing the successor-trustee is necessary to protect the trust’s beneficiaries. The Court has broad powers and discretion in such matters. Buffington Law Firm’s trust and estates litigation team has decades of experience in handling rogue successor-trustees and we have a track record of success. If you are faced with this kind of situation, we invite you to telephone us (or contact us by email) for a free legal consultation. All calls are with an experienced trust trial attorney, are completely confidential, and there is never any obligation.