There are many different reasons why you might wish to revoke a trustee’s powers. If you put together a family trust yourself, or if you are a beneficiary or a trustee of a trust, there might come a point in time in which you believe that a trustee needs to be removed.
A family trust offers many advantages to a person who establishes it and the beneficiaries of that trust, such as tax benefits, long term care planning strategies and probate avoidance.
However, this is a complicated fiduciary arrangement that can lead to conflicts between beneficiaries and trustees. The person who creates the trust then transfers assets inside the trust. At that point the trustee manages these for the benefit of designated beneficiaries. A trust agreement might state the circumstances under which a trustee could be removed by the creator.
Trust agreements will typically allow a trust creator to remove a trustee, including someone who is originally named as a successor trustee. The trustee does not have to be given a reason for the removal in most cases. Instead, the trust creator would execute an amendment to the trust agreement. In an irrevocable trust, however, the creator cannot become a trustee. Therefore the trust creator has to give up the right to revoke the trust and to serve as a trustee.
Sometimes removal can occur by beneficiaries or co-trustees. State law provides guidelines about a trustee’s responsibilities and duties, particularly when that person allegedly violated his or her fiduciary duty.