Can My Husband Remove His Sister as Trustee of His Trust?
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Question:
My brother-in-law passed away. His sister was his power of attorney and a trustee of a special need trust for his benefit. After she became p-o-a she changed his beneficiary of an ironworker’s pension from his daughter to herself. She also mismanaged his special needs trust by freely giving him funds so he drank and did drugs till he pretty much killed himself. Now she is the trustee also on my husband’s trust. What can we do?
Response:
It sounds like you need a change of trustee. Depending on the the terms of the trust, this may be easy or difficult. The trust may give your husband the right to change trustees or it may give someone else that right. If it doesn’t give your husband or someone else that power, you may have to go to court to get your sister-in-law removed. Again, depending on state law, this may be more or less difficult. You may have to prove that your sister-in-law is not competent to serve, meaning that you would have to prove everything you say about how she mismanaged your brother-in-law’s trust. The burden of proof would be on you.
However, the more modern trust laws recognize that there’s no reason to force people to deal with trustees with whom they have lost confidence, no matter the reason. If your state has adopted the Uniform Trust Code, it may be an easier process of going to court and asking for a new trustee without having to prove your sister-in-law’s malfeasance. If there are other beneficiaries in addition to your husband, they would have to be on board with the change.
I recommend that you bring the trust to a local estate planning attorney who can review the trust and advise you on what steps you can take in your state.
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could you please write which state have the more modern trust laws recognize that there’s no reason to force people to deal with trustees with whom they have lost confidence, no matter the reason.
Kari,
According to Wikipedia, the following states have adopted the Uniform Trust Code (UTC): Alabama, Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming. While each may have altered the code in some way, the UTC provides that the beneficiaries may replace the trustee without having to prove malfeasance on the trustee’s part.