The title of trustee implies that this position should be held by someone you find trustworthy, and for good reason. Serving as a trustee of a trust carries significant responsibility and duty not just to you as the trust’s creator but also to the beneficiaries who depend on accurate, faithful administration.
While being named a trustee reflects a high level of trust and confidence, it is voluntary. No one can be forced to accept it. However, they can be forced out.
The authority to remove a trustee may be determined by you and laid out in the terms of your trust or, in some cases, by the default rules of state law. In California, as in other states, this authority may rest with the beneficiaries, other people affected by the trustee’s actions, or the court. Permissible reasons for removing a trustee can range from mismanagement to conflicts of interest to incompatibility.
Because replacing a trustee can disrupt trust administration and impose additional costs, it is crucial that you select the right trustee at the outset and name backups in case the original trustee can no longer hold that position.
What Is the Role of a Trustee in a Trust?
The word trust entered the English language around the year 1200, likely derived from the Old Norse word traust. It originally meant faith or confidence, later expanding to include believing or relying on someone or something. The word “trustee” emerged in the 1640s to describe someone entrusted with the responsibility of managing property or affairs for the benefit of others.
In modern legal terms, a trustee is the person or organization appointed to hold legal title to property and administer it according to a trust’s terms. A trustee’s responsibilities vary based on the type of trust and the instructions in the trust agreement and state law, but they often include:
- Managing and investing the trust’s accounts and property (assets) to maintain and grow their value
- Paying bills, taxes, and other expenses related to the trust or its assets
- Making distributions to beneficiaries as outlined in the trust document
- Maintaining accurate records and preparing reports for beneficiaries
- Filing necessary tax returns on behalf of the trust
- Communicating regularly with beneficiaries and responding to their requests for information
- Acting impartially when there are multiple beneficiaries with competing interests
- Protecting trust property from loss or damage, including insuring and maintaining real estate
Although trustees may have some discretion about how to fulfill these responsibilities, they must adhere to the trust’s terms as closely as possible.
In addition, a trustee has a legal obligation, known as a fiduciary duty, to act with the highest standard of care and ethical conduct the law imposes, putting the beneficiaries’ interests ahead of their own. Any conduct that could be considered self-dealing or neglecting beneficiary interests may constitute a breach of this duty and may be grounds for removing the trustee.
But who, exactly, can remove the trustee—and under what circumstances?
Who Can Remove a Trustee?
Once lost, trust and confidence are difficult to recover in both personal and professional relationships. However, just as cutting somebody out of your life who has betrayed your confidence is not always easy, neither is removing a trustee from their position.
Even if someone believes the trustee has failed in any of their responsibilities, they must have legal standing to contest the trustee and initiate the legal process for removing them. For a person to have legal standing, the trustee’s actions must directly affect them.
As the trust’s creator, you are typically the one affected while you are still alive. After your death, the person affected is usually a trust beneficiary.
Generally, a trustee may be removed by any of the following:
- As the trust’s creator, you may remove a trustee while you are alive, the trust is revocable, and you are not serving as the trustee.
- In the case of irrevocable trusts or after your death with a revocable trust, beneficiaries may remove a trustee, usually with court approval and for good cause, unless the trust document specifies different requirements.
- Co-trustees. Sometimes, a co-trustee may remove a fellow co-trustee, though this action may require court involvement.
- When no other party has authority to act or disputes arise that require judicial intervention, the court can order a trustee’s removal.
Each scenario has its own rules and challenges. Here is how trustee removal typically works:
Revocable Trusts (While the Grantor Is Alive)
When a trust is revocable, you retain full control during your lifetime, including the ability to:
- remove and replace a trustee at any time,
- amend or restate the trust’s terms, and
- revoke the trust entirely.
No court involvement is needed. As long as you are legally competent (i.e., of sound mind), you can change the trust’s terms whenever and for whatever reason.
Note: While in most cases the grantor of a revocable trust serves as trustee while they are alive and well, they are free to step down whenever they want. If they remain of sound mind, they can still replace a trustee even if they have stepped down.
Revocable Trusts (After the Grantor’s Death)
The situation changes once a revocable trust becomes irrevocable—usually upon the grantor’s death. Now the beneficiaries may be watching and questioning the trustee’s performance.
However, being a trust beneficiary does not automatically result in a right to remove a trustee; the trust document or state law must specifically grant that power. Sometimes, the trust document will dictate the process or requirements for removing a trustee. In other cases, the beneficiary must:
- Petition a court, and
- Show “good cause” (such as mismanagement, breach of fiduciary duty, or conflicts of interest).
Some modern trusts appoint a trust protector, a third party named in the trust who is empowered to oversee the trustee. Depending on the trust’s terms, the trust protector may remove and replace trustees without court approval, helping ensure that the trust is carried out according to the grantor’s intent. The trust protector is sometimes described as “watching the watcher” or acting as the grantor’s voice after death.
Co-Trustees
Sometimes, a trust may name more than one trustee to serve together in the role. Appointing co-trustees can provide checks and balances, continuity in management, and shared responsibility. Some scenarios that involve co-trustees include:
- A family member trustee paired with a professional trustee (to balance personal insight and financial expertise), or
- Two or more siblings named as co-trustees to share duties equally and ease the heavy burden of trust administration.
However, co-trustees do not always agree. When serious disagreements arise, especially if one believes another is breaching their fiduciary duties, the former may seek to have the latter removed. Unless the trust document gives co-trustees explicit authority to remove a fellow co-trustee, court intervention is usually required.
When one co-trustee is removed or resigns, the trust’s terms may appoint a successor trustee to take their place with the remaining co-trustee(s), or the terms of the trust may specify that the remaining trustee can act alone.
Reasons to Remove a Trustee
When a trustee accepts their role, they are legally bound to follow the grantor’s wishes as outlined in the trust document and in accordance with state law. This obligation stems from the trustee’s fiduciary duty to the beneficiaries; when a trustee is removed, it is typically because they have breached this duty.
In my experience serving California families for over 30 years, some common reasons why beneficiaries may seek a trustee’s removal include:
- Failing to perform their duties. A trustee who neglects their responsibilities, whether due to inexperience, poor management skills, or outright refusal, can jeopardize the trust’s administration.
- Example: The trustee has not filed the required tax returns for two years and ignores beneficiary requests for updates, exposing the trust to penalties and interest.
- Poor decision-making or mismanagement. Unless the trust says otherwise, a trustee does not have to act with bad intent to breach their fiduciary duty. Even if they are “trying their best,” a trustee who makes poor investment choices or mismanages assets might be considered to have breached their fiduciary duty.
- Example: The trustee invests nearly all the trust’s assets in a single risky stock and suffers major losses.
- Conflicts of interest or self-dealing. A trustee must prioritize all the beneficiaries’ interests above their own, even if the trustee is also one of the beneficiaries. Actions that benefit the trustee personally may be grounds for removal.
- Example: The trustee sells trust property to a company they own at below market value.
- Hostility or deadlock. When a trustee has a strained relationship with beneficiaries or co-trustees, it can paralyze the trust’s administration and necessitate a new trustee.
- Example: Two sibling co-trustees refuse to communicate and cannot agree on distributions, leaving beneficiaries in limbo.
- Inconvenience or unavailability. Life changes can make it impractical for a trustee to serve effectively.
- Example: The trustee takes on a demanding new job or is dealing with personal challenges, leaving little time or focus for managing the trust. Deadlines are missed, and beneficiary concerns go unanswered.
- Excessive fees. While trustees are often permitted to charge fees, excessive or disproportionate charges can drain the trust’s assets.
- Example: A trustee’s annual or monthly fees exceed what is considered reasonable in that locality or are more than permitted under state law, steadily eroding the trust’s value.
- Incapacity or illness. A trustee may become unable to fulfill their role due to health issues.
- Example: The trustee develops dementia and can no longer handle complex financial tasks. If the trustee feels overwhelmed by their responsibilities or recognizes that they cannot fulfill them, they might resign voluntarily. If they do not, the beneficiaries can address the situation directly and request the trustee’s resignation. Sometimes, the matter can be resolved amicably without formal removal proceedings. However, if a trustee does not voluntarily resign, the next step may be to file a petition for their removal with the court.
For beneficiaries, removing a trustee typically involves filing a petition in probate court and presenting evidence of the trustee’s misconduct or unfitness. If the court agrees, it can order the trustee’s removal and appoint a successor—or look to the backup successor you appointed in the trust document—to take over the trust’s administration.
The Cost of Removal
Unfortunately, removing a trustee is not as straightforward as firing them, and it is not free, either.
Once formal legal action has been initiated and the court gets involved, there can be significant legal fees. If the trust agreement permits, trust property may be used to cover these costs, but in some cases, the trustee or petitioning party may also have to pay legal fees out of pocket.
Successor Trustees and Keeping a Plan Up to Date
To simplify trustee removal—if it becomes necessary—you should outline a process in the trust document for appointing a replacement trustee. That individual might be:
- a co-trustee currently serving, who will now serve alone;
- a successor trustee named in the document;
- a trust protector who is granted authority in the trust to fill a vacancy in the trustee position; or
- in their absence, someone appointed by the court.
With no clear succession plan, the following could happen:
- The court could name a trustee whom you do not know, who would not necessarily want to serve in that position, or who may not fully understand your intentions.
- If a beneficiary must petition the court to appoint a new trustee, the process can be time-consuming and costly, resulting in trust management pausing until a successor steps in.
- The time gap between removing a trustee and appointing a new one may disrupt trust administration, leading to delays in distributions that may cause financial hardship for beneficiaries, missed filing deadlines with potential penalties, lapses in bill payments for trust-owned property, and other issues.
As part of your ongoing estate plan review, you should review the individuals you have appointed as key decision-makers in your estate plan—including trustees and successor trustees—every few years or whenever circumstances change. Relationships evolve, situations shift, and sometimes people come in and out of your life. If a rift develops between you and an appointed person or between your chosen trustee and a named beneficiary, you may need to add or replace your selections to keep your plan effective.
Professional Guidance for Trust Administration
Choosing the right trustee is one of the most important decisions in estate planning. The wrong choice can lead to family disputes, financial losses, and years of legal complications. The right choice helps ensure your wishes are carried out effectively and your beneficiaries are properly served.
As a Certified Specialist in Estate Planning, Trust and Probate Law, by the State Bar of California, I help California families navigate complex trust administration issues, including trustee selection, removal procedures, and succession planning. Whether you’re creating a new trust or dealing with trustee performance concerns in an existing trust, professional guidance can help protect your family’s interests and preserve your legacy.
If you’re facing trustee challenges or want to ensure your trust documents provide appropriate removal and succession mechanisms, contact our Los Altos office at (650) 405-0711 to schedule a consultation.
