Trust and Estate Litigation: Forcing the Removal of a Personal Representative or Trustee
A personal representative or administrator of an estate stands in the shoes of the deceased person for the express purpose of wrapping up their worldly affairs. The trustee of a trust is responsible for maintaining the property in the trust in a way that maximizes the benefit received by the beneficiaries of that trust. In both cases, the individual has a duty to make wise decisions and act diligently in their dealings on behalf of the trust or estate, and a failure to do so can result in their removal from the fiduciary position.
Typically, initial oversight of the personal representative or trustee (“the Fiduciary”) is up to the beneficiaries. The beneficiaries have the power under the law to demand certain information from the Fiduciary to ensure that the property is being handled appropriately. If any beneficiary is not satisfied with the conduct of the Fiduciary, they can petition the court for additional oversight or even to have the Fiduciary removed and replaced by someone else.
General dissatisfaction or disagreement is not enough to substantiate the removal of the Fiduciary. The law gives the Fiduciary a certain amount of discretion to make decisions regarding the property of the Estate or Trust. Courts try to avoid second guessing the Fiduciary on routine business decisions, but some actions (or failures to act) are violations of the Fiduciary’s duties under the law and can lead to sanction or removal. Below are types of behavior that can cause the Fiduciary to be removed by a court:
- The Fiduciary’s failure to abide by the express terms of the trust or will. For example, if a will calls for a certain bequest to a beneficiary, and the Fiduciary fails to make that bequest. The Fiduciary does not have discretion to ignore the directions provided by the person who created the will or trust.
- The Fiduciary’s violation of a statute or common law affecting the estate. If a Fiduciary chooses to operate certain trust property as a meth lab, a beneficiary can petition for their immediate removal, even if the police have not charged the Fiduciary with a crime. Any time the Fiduciary exposes themselves to criminal liability, they will be subject to removal. Also, violations of laws governing trusts and probates specifically can give rise to an action against the Fiduciary (i.e. failing to prepare an inventory, failing to marshal assets, failing to communicate with beneficiaries).
- Embezzlement or theft of estate assets will lead to removal.
- Waste of estate or trust property is not permitted. If a property could generate income but is allowed to remain vacant or go unused, the Fiduciary could be in violation of their duties. In addition, the Fiduciary must maintain all property to ensure that it is suitable for its highest possible use and does not fall into disrepair.
- The Fiduciary’s use of estate or trust property without providing adequate compensation is not allowed. For example, a Fiduciary cannot live on estate property without paying the estate for the fair rental value of the property. Similarly, the Fiduciary cannot use estate vehicles or equipment without providing fair payment in return. In addition, the Fiduciary cannot allow friends or family members to use trust/estate property without paying a fair value for the use.
While there are some obvious actions that will result in the removal and replacement of the Fiduciary, most cases are not so open and shut, requiring careful, fact specific analysis. If you need advice regarding the fiduciary duties of a personal representative or trustee, seek an attorney well-versed in those duties and remedies available for the breach of those duties. The attorneys at Beresford Booth, PLLC are experienced in these matters and are ready to provide the guidance you require. To learn more, please contact Beresford Booth at email@example.com or by phone at (425) 776-4100.