How to Change the Executor of a Family Trust

Method 1
Method 1 of 3:

Choosing a New Trustee

  1. Even if you have someone particular in mind who you want to name as your new trustee, you want to look at anyone else who might work well in the role and make your choice from a field of candidates. [3] [4]
    • Keep in mind that while the duties of an executor of a will typically will wrap up within a year or so, a trustee may need to continue fulfilling that role for a number of years after your death.
    • While most people prefer a family member to act as trustee of a family trust, you also need someone who has a good understanding of your finances and how to handle any investments you have included in the trust.
    • You also want to take people's health and age into account. For example, if you want your spouse to be a trustee but they are around the same age as you, it might help to add someone as a co-trustee in the event they are unable to fulfill the role.
    • You also want to consider family relations and the potential for animosity. For example, if you have two sons who have grown estranged from each other, you may not want to appoint them as co-trustees if they're going to have difficulty working together.
  2. Before you make your choice, you must sit down with the people you're considering as potential trustees and make sure they understand the work and commitment involved in the role. [5] [6]
    • It may seem silly to conduct a formal interview with someone who is a family member you know very well, but you still need to ensure that each person understands the responsibilities that being a trustee entails.
    • You also need to be able to make an objective decision as to who potentially will be in the best position to take on the role. While you can't predict the future, you want to name someone as a trustee who is in a relatively stable position in life.
    • In addition to the primary trustee, you also want to think about a backup. Most attorneys and estate planners will recommend that you either name a successor trustee or allow your trustee to appoint someone in case they cannot fulfill their duties.
    • If you're thinking about modifying an existing family trust to change your trustee, look for at least two people. You can have them act together as co-trustees, or name the second as a successor to the first.
    • Naming more than one person significantly decreases the odds that you'll have to modify your trust again in your lifetime.
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  3. Anyone you're seriously considering as a trustee should have a good understanding of the way your trust is structured, the assets contained in the trust, and what their responsibilities will be after your death. [7] [8]
    • You want to start by showing them the trust document itself so they understand the trust and the responsibilities that will be entrusted to them as trustee.
    • Beyond that, your trustee should have detailed information about all of your accounts and assets, including account numbers or passwords and the location of important documents.
    • Make sure those you're naming as trustees fully understand their responsibilities and the fiduciary duties of a trustee and are capable of performing them.
    • If you worked with an attorney to draw up your trust documents, you may want to have him or her sit down with your potential trustees to explain the trust and answer any questions.
  4. Particularly if you have significant assets or the trustee's duties are expected to last for several years, you may want to consider naming a bank or law firm as trustee. [9] [10]
    • One benefit of using a bank or law firm as a trustee is that you won't have to worry about whether they are around to fulfill the duties with the time comes.
    • You also can be assured that the institution has the expertise necessary to handle your accounts and investments.
    • While you may not want to name an institution as your primary trustee, a bank or law firm makes sense to use as a successor trustee. There's less worry that an institution will be unable to step in if the primary trustee is unable to fulfill their duties.
  5. The individual or institution you choose as your trustee should be prepared to take on the responsibilities of trustee and to perform them for a number of years, if necessary, after your death. [11] [12]
    • Before you start modifying your trust documents, make sure the person you've chosen knows that you've decided to name them as trustee of the family trust and that they understand fully what that entails.
    • If you're choosing a new trustee to replace someone already named in your trust documents, you also need to let the current trustee know that they are being removed.
    • Depending on who you've chosen, you also may want to let key trust beneficiaries know that you intend to change the trustee. Keeping everyone on the same page now can avoid confusion later on.
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Method 2
Method 2 of 3:

Removing the Trustee as the Grantor

  1. Your trust documents hold the key to whether you can change the trustee of your family trust as the grantor. Keep in mind that if you've created an irrevocable trust, you typically don't have the power to change any aspect of that trust unilaterally. [13] [14]
    • If you've created a revocable trust, you have the power as the grantor to change the trust documents whenever you like.
    • Creating an irrevocable trust means that you can't revoke it while you are alive. However, you don't need to revoke your trust to remove the trustee.
    • Many trusts include a procedure by which you can remove the trust under certain circumstances that will be spelled out in the document itself.
    • These circumstances typically include situations where the person you named as trustee has died or is incapable of carrying out their responsibilities. Some even allow you to remove a trustee who decides they no longer want to serve in that capacity, despite being capable of carrying out the necessary responsibilities.
    • Even if there isn't any provision in your trust enabling you to remove the trustee, it still may be possible for you to remove the trustee and appoint someone different provided all the beneficiaries are in agreement with your decision.
  2. Even if you've created an irrevocable trust, you still have the ability to change your trust documents, including naming a different trustee, if all of the trust's beneficiaries are in agreement with it and give their consent. [15]
    • You've created the trust for the benefit of those designated as beneficiaries of that trust. As such, you're generally unable to make any changes that would not be to their benefit or that would change the benefits to which they're entitled.
    • In most cases, however, changing the trustee won't really affect the beneficiaries in any way. They're still getting the same property being held in trust for them, it's just that the person who will manage and distribute that property after your death will change.
    • For this reason, it shouldn't be difficult to get your beneficiaries on board with what you want to do. However, if your trust document doesn't include a clause explicitly allowing you to remove the trustee and appoint someone else, you need to get the consent of the trust's beneficiaries to ensure the change has legal force.
  3. The traditional way to modify a trust, whether revocable or irrevocable, is to create a document called a restatement that makes whatever changes you wish to make while reasserting the validity of the portions of the trust that remain unchanged. [16]
    • If you used an attorney to draw up your original trust documents, you may want to call them and have them draw up the restatement for continuity and to ensure the document follows all legal requirements of your state.
    • You typically can draft the restatement yourself if you drafted your trust documents yourself. It will follow the same format and repeat most of the same language as your original trust documents.
    • Title your restatement "First Amendment and Restatement of," followed by the exact title of your trust as listed on the original document.
    • In the preamble or initial clauses of your restatement, describe the history of your trust, including the date you first created it and the changes you are making.
    • If you needed and have the consent of the beneficiaries to make the change, you should state this in the preamble. Likewise, if a clause in the original trust allowed you to remove the trustee and appoint someone else, make reference to that clause.
    • From this point forward, your restatement will appear just as your original trust document did, except that the name of the trustee will change. Make sure you copy everything that isn't being changed exactly as it appears in the original document.
  4. To be legally binding, a restatement must be signed using the same formalities that were necessary to sign the original trust document, which typically entail signing the document in front of a notary public or other witnesses. [17]
    • In situations where you needed the consent of the trust's beneficiaries to remove the trustee and appoint someone else, get signatures from the beneficiaries – or a single beneficiary to sign on behalf of all of them.
    • Once the restatement has been properly signed and notarized, make copies of it and include a copy of it with every existing copy of your trust.
    • This means that if you previously distributed copies of your original trust document to any of your beneficiaries, or had your estate planning attorney keep a copy, they also should get copies of the restatement. This prevents any confusion over which document controls.
    • You also need to make sure the person you've named as the new trustee in the restatement has a copy of both the restatement and the original trust document.
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Method 3
Method 3 of 3:

Removing the Trustee as a Beneficiary

  1. If you are the beneficiary of a trust and want to remove the named trustee after the grantor's death, the trust document itself may provide some mechanism by which the trustee can be changed under specific circumstances. [18]
    • If the trust document includes a clause that allows the beneficiaries to remove a trustee and appoint someone new in their place, it usually lists specific reasons for removal.
    • Typically, all beneficiaries must be in agreement to remove the existing trustee, as well as making a joint decision on who the new trustee should be.
    • The trustee may no longer be able to fulfill their duties, or may simply want to resign their post. This is the most straightforward situation for the beneficiaries since you can't really force someone to continue in a role they cannot or don't want to perform.
    • However, keep in mind that even if all are in agreement to remove the existing trustee, you still may need a judge's approval to appoint a new trustee if the trust document didn't name a successor.
  2. If the trust document doesn't contain a clause for changing the trustee that applies to your situation, you'll need to file a petition with the probate court to have the trustee removed. An experienced probate attorney can help you assess your options and guide you through the next steps.
    • Since having a trustee removed isn't a common action and typically requires rather complex proof of wrongdoing on the part of the existing trustee, you may not be able to find court-approved forms and other resources to enable you to complete this action on your own.
    • An experienced attorney will understand the procedures and formal requirements of probate court, which can differ from regular civil courts, as well as being able to navigate the discovery process.
    • Attorney assistance is particularly useful if you anticipate your petition to change the trustee will be opposed, either by the existing trustee or by other beneficiaries.
    • Although you typically will have to pay court costs and attorney's fees out of pocket, you may be able to seek reimbursement from the estate if the court grants your petition.
  3. Probate courts only allow trustees to be removed for specific reasons, typically related to wrongdoing on the trustee's part. Before you petition the court to have the trustee removed, you need to make sure you have some evidence of what the trustee has done. [19]
    • For example, most states provide for the removal of a trustee if they are insolvent or otherwise unfit to administer the trust.
    • If the current trustee recently filed for bankruptcy, court documents related to this filing could be used to prove the trustee is incapable of managing the estate's assets appropriately for the beneficiaries.
    • You also typically can have a trustee removed if they have conflicting interests or duties. In other words, if the trustee has some personal financial interests or other dealings that are adverse to or conflict with interests of the trust, they may be considered unfit to administer the trust.
    • An example of a conflict of interest would be if the trustee is a member of the board of a corporation in which the trust holds a significant number of shares.
    • All states allow trustees to be removed for a breach of fiduciary duty, or in cases where the trustee is particularly vulnerable to fraud or undue influence. In these situations, you would need factual evidence to prove that fraud or undue influence has been attempted, or that the trustee acted in a way that was adverse to the interests of the beneficiaries.
  4. To get court approval to change the trustee of a family trust, you must first file a petition that sets forth the reasons you believe the current trustee should be removed.
    • Although a family trust typically is created to avoid probate, the trust document itself is a legal document, and any proposed changes to it must be brought through court.
    • Since a trust also is an estate planning document, the probate court in the county where the deceased person resided typically is the correct court in which to file your petition.
    • If you've hired an attorney, they'll draft the petition describing the reasons you want the trustee removed, and asking the court to approve of that removal and allow you to appoint someone else.
    • In some jurisdictions, you also must name the person you want to take the trustee's place so the judge can approve that appointment.
    • Once your petition is filed, it must be served on all interested parties, including the current trustee and other beneficiaries of the trust.
    • Especially if the current trustee or other beneficiaries oppose your position, don't be surprised if someone files a motion to dismiss your petition. You'll have to defend your cause against such a motion before a judge will rule on the merits of your petition.
    • The probate court typically will allow formal or informal discovery, which allows all parties involved to exchange information related to your petition. Keep in mind that any level of discovery can be expensive as well as time-consuming.
  5. The court will hold a hearing to decide whether the current trustee should be removed and a new trustee appointed, at which all interested parties will have the opportunity to speak – including the current trustee.
    • At the hearing, all parties will introduce evidence supporting their position, which can include submitting documents or calling witnesses to testify.
    • Although there won't be a jury, the hearing will proceed similarly to any other trial, with similar rules of evidence and procedure. Your attorney typically will meet with you in advance to explain the procedures and what you should expect.
    • If you intend to testify at the hearing, your attorney will ask you questions related to your petition. Attorneys for any other parties opposing your petition also will have the opportunity to ask you questions.
    • At the conclusion of all the evidence, the judge will decide whether to grant your petition. Although you may learn the judge's decision immediately following the hearing, it typically will be a few days before a written order is entered.
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      References

      1. ↑ http://www.americanbar.org/content/dam/aba/migrated/publiced/practical/books/wills/chapter_10.authcheckdam.pdf
      2. ↑ https://legal-info.lawyers.com/trusts-estates/modifying-or-terminating-a-trust.html
      3. ↑ http://www.americanbar.org/content/dam/aba/migrated/publiced/practical/books/wills/chapter_10.authcheckdam.pdf
      4. ↑ http://www.aarp.org/money/estate-planning/info-04-2011/choosing-right-executor-trustee.html
      5. ↑ http://www.aarp.org/money/estate-planning/info-04-2011/choosing-right-executor-trustee.html
      6. ↑ https://www.aaii.com/journal/article/2-what-to-look-for-when-selecting-a-trustee-for-your-estate-plan
      7. ↑ http://www.americanbar.org/content/dam/aba/migrated/publiced/practical/books/wills/chapter_10.authcheckdam.pdf
      8. ↑ https://www.aaii.com/journal/article/2-what-to-look-for-when-selecting-a-trustee-for-your-estate-plan
      9. ↑ http://www.americanbar.org/content/dam/aba/migrated/publiced/practical/books/wills/chapter_10.authcheckdam.pdf
      1. ↑ http://www.aarp.org/money/estate-planning/info-04-2011/choosing-right-executor-trustee.html
      2. ↑ http://www.aarp.org/money/estate-planning/info-04-2011/choosing-right-executor-trustee.html
      3. ↑ https://www.aaii.com/journal/article/2-what-to-look-for-when-selecting-a-trustee-for-your-estate-plan
      4. ↑ https://legal-info.lawyers.com/trusts-estates/modifying-or-terminating-a-trust.html
      5. ↑ http://www.nolo.com/legal-encyclopedia/free-books/avoid-probate-book/chapter7-9.html
      6. ↑ http://www.robinsonbradshaw.com/newsroom-publications-Trust-Me-Your-Irrevocable-Trust-is-Modifiable-12-15-2009.html
      7. ↑ http://www.nolo.com/legal-encyclopedia/free-books/avoid-probate-book/chapter7-9.html
      8. ↑ https://legal-info.lawyers.com/trusts-estates/modifying-or-terminating-a-trust.html
      9. ↑ https://www.findlaw.com/legalblogs/law-and-life/5-reasons-to-remove-a-trustee-from-your-trust/
      10. ↑ https://www.findlaw.com/legalblogs/law-and-life/5-reasons-to-remove-a-trustee-from-your-trust/

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