Can a Trustee Remove a Beneficiary from a Trust?

Prior to exploring the rights of beneficiaries and trustees, it’s critical to comprehend the precise definitions of each.

The person appointed by the trust’s creator, also known as the settlor, grantor, or trustor, to oversee the trust and ultimately distribute funds to beneficiaries is known as the trustee. In other words, they spearhead the trust administration process. Because they are fiduciaries, trustees must always act in the trust’s and its beneficiaries’ best interests.

The people for whom a trust is established are known as trust beneficiaries, and they are the ones who will benefit from it.

In order to enable them to carry out their duties efficiently, trustees are granted specific powers under the trust, and beneficiaries are granted specific rights to guarantee that they get the inheritances to which they are legally entitled.

A probate lawyer can assist beneficiaries in upholding their rights and trustees in adhering to the parameters of the authority bestowed upon them.

What Are the Powers of a Trustee?

Essentially, a trustee’s duties and powers are the same because they have the authority to make sure that their obligations to the trust and its beneficiaries are fulfilled. Having said that, beneficiaries of trusts also have certain rights, some of which may conflict with those of the trustee.

The powers of a trustee include the powers that are listed in the trust instrument (so long as those powers do not conflict with California law or court orders) as well as the powers listed in California Probate Code sections 16200-16249 (summarized below), which relate to the trustee’s duty to marshal, preserve and protect trust assets.

The rights of a trustee typically consist of the following, unless a trust expressly prohibits a particular right:

• The right to make reasonable repairs of trust property
• The right to insure trust property
• The right to sell trust assets
• The right to make prudent investments
• The entitlement to cover specific administrative costs and bills (such as the right to collect reasonable trustee fees and engage outside experts, like attorneys, certified public accountants, and real estate brokers, to help with administration)
• the authority to distribute and pay trust beneficiaries in line with the trust’s provisions

Can a trustee remove a beneficiary from a trust? What does this mean for beneficiaries?

The short answer is no, but there are rare exceptions. Although the California Probate Code does not expressly give trustees the authority to remove beneficiaries from a trust, the trustee may have this authority based on the terms of the trust agreement, including whether and when to distribute trust assets to beneficiaries.

If a beneficiary’s interest in a trust is to be reduced or eliminated, a trustee may be able to do so with the assistance of a trust lawyer.

Check out our article to see if a trustee has the authority to take money out of a trust.

Beneficiaries of trusts have many rights to make sure they get their rightful inheritances and can hold trustees responsible for wrongdoing.

However, unless trust beneficiaries actively participate in administration and maintain awareness of developments at every turn, these rights are meaningless.

Beneficiaries will be better equipped to identify instances in which the trustee is negatively impacting the trust by actively participating in its administration. Early detection of misconduct is crucial because it can shield the trustee from endangering the inheritances of beneficiaries.

Living trust beneficiary rights include:

• The entitlement to the disbursements and payments specified in the trust agreement
• The right to information about the trust
• The right to receive trust accountings
• the ability to ask the court to impose a surcharge and suspend or remove the trustee

Trust beneficiaries should think about hiring a fiduciary misconduct attorney to help enforce their rights and shield them from an unjust removal by a trustee if they believe the trustee is reducing their interest in the trust, withholding trust fund distributions, or violating their rights.

You might be entitled to benefits from the decedent’s estate if they left behind a will or trust but no living trust, or if they passed away without leaving any of these documents.

Removing a Beneficiary on the Basis of an Unsuccessful Trust Contest

If the trust instrument satisfies one or more of the requirements for contesting a trust, anyone with standing may bring a trust contest prior to the commencement of the trust administration process. If someone has a financial interest in the trust, they are said to have standing; in general, parties with standing include the trustee, beneficiaries of the trust, the heirs of the settlor, and in certain situations, creditors (these individuals are referred to as interested parties).

Let’s say a stakeholder has reason to suspect that a beneficiary abused their power to ensure the decedent received a larger portion of the trust. In an attempt to have the portion of the trust that pertains to that beneficiary declared invalid, that interested party might be able to file a contest. The interested party may also be able to file a contest to have the entire trust declared void if they feel that it is invalid overall.

In compliance with California’s intestate succession laws, the trust’s assets may pass via estate administration to the decedent’s heirs if the court grants the order to invalidate the trust and there is no valid prior trust instrument.

Recall that there are stringent deadlines for contesting a trust, so you must move fast to submit your petition for a trust contest if you believe a trust is invalid.

Valid grounds for contesting a trust include:

• You believe the deceased was subjected to undue influence in order to persuade them to significantly change their trust
• You believe the deceased did not have the necessary capacity to establish or manage a trust.
• You believe elder financial abuse was involved in the trust’s establishment or administration.
• You believe there was fraud involved in the establishment or administration of the trust.
• You suspect the trust instrument to be a forgery.
• You believe the trust was not executed in accordance with the correct protocols.
• You suspect the trust was created or executed by mistake.
• You suspect the decedent intended to revoke the trust.

If beneficiaries of a trust believe that a trust contest may diminish or eliminate their interest in the trust, they should consult a trust and will dispute lawyer as soon as possible.

Can a Trustee Remove a Beneficiary From a Trust? W M Law