Jon R. Disrud

Dedicated To Protecting Your Rights And Guarding Your Interests

Why is it so important to choose a trustee carefully?

On Behalf of | Apr 19, 2023 | Estate Planning |

A trust is one of the most important estate planning tools. With a valid trust in place, the grantor can avoid some estate taxes and bypass a costly, public and time-consuming probate while ensuring that their assets pass down to the people they care about when they die. 

However, a trust is only as good as the trustee that is managing it. A diligent trustee can ensure that the grantor’s wishes are honored to the letter and that the trust is executed per the stipulations in the trust instrument. A rogue trustee, on the other hand, can mismanage the trust, leaving the dependents and grantor’s legacy in limbo. 

Here are two scenarios that can justify the removal of a trustee from their role:

Misappropriation of the trust’s funds

A trustee has a fiduciary duty to manage the trust in a responsible manner. If they make a bad investment decision, distribute the assets wrongly or fail to release the funds as stipulated in the trust instrument, then the beneficiary may have a valid reason to petition their removal. 

Advancing personal interests

It is not in the trustee’s place to amend the trust’s instrument or make decisions that serve their self-interest. If they do, they would be breaching their fiduciary duty to the grantor and the beneficiaries. And either the grantor or the beneficiaries (if the grantor is dead) can petition the court to remove them from this role. 

Nobody wants to think that their carefully laid plans for their legacy could be destroyed by their faith in the wrong person. Choosing a trustee with care can help avoid disputes down the road, so it’s always wisest to discuss your options over with someone who can explain your options to you if you intend to use a trust as part of your estate plans.