How to Change the Trustee of an Irrevocable Trust

By Edward A. Haman, J.D.

How to Change the Trustee of an Irrevocable Trust

By Edward A. Haman, J.D.

You may have set up an irrevocable trust, or you may be a beneficiary of an irrevocable trust. When the trust was set up, at least one trustee, or manager, was designated. More than one trustee may also have been appointed, either as a co-trustee or as a successor trustee. In any event, there may come a time when you wish to remove or replace a trustee.

There are several situations where this might happen. You may no longer have confidence in the trustee's judgment or integrity, or the trustee may become ill, die, or desire to resign.

Just because the trust is irrevocable does not mean that it can't be changed in certain respects. Changing the trustee of an irrevocable trust is governed by two factors: the trust document and state law.

Changes by the Trustor

Most trust documents include provisions for how and when a trustee may be removed or replaced, so first check the document to see what it says on this matter. You may find a provision similar to: “I may remove and replace any Trustee with another Trustee, provided that under no circumstances shall I serve as Trustee." It may contain other provisions, such as that the beneficiaries or trustee being removed must be given written notice.

In addition to following any requirements mentioned in the trust documents, you need to prepare and execute an amendment to the trust document, stating that the trustee is being removed and appointing the replacement trustee. In some instances, the new trustee may need to sign a consent to the appointment. It is also possible that either the trust document or state law will require the out-going trustee to either consent to the change or resign.

In some trusts, a third-party is designated as having the authority to remove and replace a trustee. Such a person is sometimes referred to as a trust protector, whose duties under the trust agreement are to oversee the trustee's management of the trust. If so, you need to talk with this third-party about why the change is desirable and, hopefully, get their agreement to make the change.

If you are unable to proceed in this manner, you probably have two options under state law: obtain the written consent of all beneficiaries or petition the appropriate court to change the trustee.

Consent of Beneficiaries

Either state law or the trust document itself may require the beneficiaries to consent to a change of trustee. If this is the case, you need to find out if the beneficiaries will agree to the change. If so, all beneficiaries need to sign a written consent to the change.

If you are a beneficiary desiring to change a trustee, begin by reading the trust document to see what procedures it may require. You generally need to obtain the consent of all the other beneficiaries and that of the trustor, if they are still alive. If the necessary consents cannot be obtained, and depending upon the terms of the trust and state law, your only option may be to petition the court.

If a beneficiary is under the age of majority, you will most likely need to take the matter to court. Someone will likely need to be appointed to represent the interest of the minor beneficiary. A similar problem can arise if any beneficiaries are not designated by name, such as simply referring to the “children" of a named beneficiary.

Court Petition

If all else fails, your last resort is to ask for the appropriate court, often called probate court, to change the trustee. Going to court is a costly, time-consuming process. There are legal papers to prepare and file, process servers to hire to deliver the petition to trustees and beneficiaries, hearing notices to prepare and send to these other parties, and one or more court hearings to attend to present the evidence as to why the trustee should be changed.

Generally, you need to have sufficient legal grounds for removing a trustee. This includes such matters as mismanaging trust assets, mental incompetence, or some type of fraud involving the trust assets. In some states, the court may change the trustee upon the desire of the trustor, if still alive, and all beneficiaries.

Changing a trustee of an irrevocable trust can be fairly easy or very complicated, depending upon the terms of the trust agreement, state law, and the reason for the change. To be sure it is done properly, you may want the assistance of a competent attorney.

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