A trustee is the person who handles the distributions to the beneficiaries according to the terms of the trust document. Some trusts can go on for years if there are distributions to be made for the benefit of minors or for other reasons. There may be some circumstances where a trustee may wish to resign from his duties as a trustee of a trust before the trust is completely administered. There are basically 4 ways.
1. As Provided in the Instrument. Most trusts by their express provisions allow a current trustee to resign with written notice and an accounting. For example, suppose you are the successor trustee of your parent’s trust and find that you must take a job abroad. If the trust names an alternate successor trustee and specifies that a currently serving trustee may resign by giving written notice to the beneficiaries, it is easy for you to resign. Some trusts also provide that when trustees resign, the resigning trustee must account for the transactions and dispursements he made while acting as Trustee.
2. With a Revocable Living Trust With the Consent of the Trustor. Suppose you are the Co-Trustee of your father’s trust and you want to resign. If your father consents, you can resign and your father can appoint another Co-Trustee if he wishes. It is a good idea to put the consent and resignation in writing. There is no requirement that you give notice to the beneficiaries.
3. With an Irrevocable Trust, With the Consent of All Beneficiaries. If you are the Trustee of an Irrevocable Trust, you need the consent of all adult beneficiaries who (1) are receiving income; (2) are entitled to receive income; or (3) are entitled to receive a distribution of principal if the trust were terminated.
4. A Court Order. If there is no provision in the trust and there is no successor Trustee able or willing to serve, you may have to petition the Court to appoint a Trustee. Nominations of the beneficiaries will be given consideration.
For issues with Trust Administration or questions about your duties as the Trustee, contact us at Roy M. Dopppelt & Associates.