Determination of the Successor Trustee
Check of Trust Documents
Acceptance of the Trustee
Alternative Successor Trustees
Removing a Trustee
Check of Trust Documents
After the grantor passed away, a family that is aware of the existence of a living trust has to find the trust documents and read them carefully.
In many cases the successor trustee of the decedent will already know that he or she is named successor trustee of the living trust, because the grantor has told the respective person so. In this case the successor trustee will know, where the trust documents are stored.
Unfortunately sometimes a grantor dies and nobody knows where the important documents are stored. If a thorough search of the personal belongings does not uncover the lost documents it may be useful to contact the surrounding banks if the grantor had a safe deposit box with them. Sometimes the trust documents can be found there.
Acceptance of the Trustee
Then the trust document needs to be checked to determine the named successor trustee. Under Californian state law the named trustee is not obliged to take over the trustee’s duties. An act of acceptance is required to become a trustee. The acceptance can be done by signing the trust document or by signing a separate declaration of acceptance or by knowingly exercising powers of a trustee. From my experience as a San Francisco trust attorney, the latter is the more common way to accept the position as a trustee.
Alternatively the named trustee may reject trusteeship. If the trustee does not explicitly accept or does not exercise trustee’s powers within a reasonable time the trustee is deemed to have rejected the trusteeship by law. In these cases the named individual does not become trustee.
Once a person has accepted trusteeship, he or she can only resign according to the terms of the trust, with the consent of all beneficiaries or by court order.
On acceptance the person named as successor trustee is then in charge of the administration of the trust according to its terms. Sometimes more than one trustee is named in the trust document. Then all of the designated trustees serve together to fulfill the trust’s assignations. Multiple trustees can be empowered by the trust document to act either individually or with consent of all trustees only. However each trustee has to separately accept the trust in order to become a trustee.
Alternative Successor Trustees
If the named successor trustee is not available, the trust document should provide an alternative successor trustee. In this case the trustee’s duties fall to the alternative successor trustee according to the terms of the trust. Alternative trustees have the right to reject trusteeship as well as a ordinary successor trustee.
A trustee could also appoint a new trustee if the declaration of trust empowers the trustee to do so. Usually such a clause is restricted to cases where no other explicitly named alternative trustee is available. In that instance the new trustee takes over as a successor trustee.
Removing a Trustee
There will be some cases where beneficiaries do not come along very well with the trustee, who has been named by the grantor. However in general there is not much beneficiaries can do about this. Only in rare circumstances a trustee might be removable by lawsuit.
In California the probate division of the superior courts (often referred to as “probate court”) has jurisdiction over living trusts. The probate court has the power to either remove a trustee or make the trustee pay the beneficiaries for any loss to the trust. Under Californian law the probate court can remove a trustee for the following reasons:
Acceptance of the Trustee
Alternative Successor Trustees
Removing a Trustee
Check of Trust Documents
After the grantor passed away, a family that is aware of the existence of a living trust has to find the trust documents and read them carefully.
In many cases the successor trustee of the decedent will already know that he or she is named successor trustee of the living trust, because the grantor has told the respective person so. In this case the successor trustee will know, where the trust documents are stored.
Unfortunately sometimes a grantor dies and nobody knows where the important documents are stored. If a thorough search of the personal belongings does not uncover the lost documents it may be useful to contact the surrounding banks if the grantor had a safe deposit box with them. Sometimes the trust documents can be found there.
Acceptance of the Trustee
Then the trust document needs to be checked to determine the named successor trustee. Under Californian state law the named trustee is not obliged to take over the trustee’s duties. An act of acceptance is required to become a trustee. The acceptance can be done by signing the trust document or by signing a separate declaration of acceptance or by knowingly exercising powers of a trustee. From my experience as a San Francisco trust attorney, the latter is the more common way to accept the position as a trustee.
Alternatively the named trustee may reject trusteeship. If the trustee does not explicitly accept or does not exercise trustee’s powers within a reasonable time the trustee is deemed to have rejected the trusteeship by law. In these cases the named individual does not become trustee.
Once a person has accepted trusteeship, he or she can only resign according to the terms of the trust, with the consent of all beneficiaries or by court order.
On acceptance the person named as successor trustee is then in charge of the administration of the trust according to its terms. Sometimes more than one trustee is named in the trust document. Then all of the designated trustees serve together to fulfill the trust’s assignations. Multiple trustees can be empowered by the trust document to act either individually or with consent of all trustees only. However each trustee has to separately accept the trust in order to become a trustee.
Alternative Successor Trustees
If the named successor trustee is not available, the trust document should provide an alternative successor trustee. In this case the trustee’s duties fall to the alternative successor trustee according to the terms of the trust. Alternative trustees have the right to reject trusteeship as well as a ordinary successor trustee.
A trustee could also appoint a new trustee if the declaration of trust empowers the trustee to do so. Usually such a clause is restricted to cases where no other explicitly named alternative trustee is available. In that instance the new trustee takes over as a successor trustee.
Removing a Trustee
There will be some cases where beneficiaries do not come along very well with the trustee, who has been named by the grantor. However in general there is not much beneficiaries can do about this. Only in rare circumstances a trustee might be removable by lawsuit.
In California the probate division of the superior courts (often referred to as “probate court”) has jurisdiction over living trusts. The probate court has the power to either remove a trustee or make the trustee pay the beneficiaries for any loss to the trust. Under Californian law the probate court can remove a trustee for the following reasons:
- If there is a Breach of trust
- If the Trustee has more debts than assets or is otherwise unfit to act as trustee
- If the trust cannot be administered because of hostility or lack of cooperation between co-trustees
- If the trustee does not want to be the trustee any more
- If the trustee's payment is excessive
- If the trustee personally does not qualify for beeing a trustee. Usually people who professionally helped to draft the trust document shall not be named as a trustee (For further reference see Probate Code Section 15642 and 21350).
