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When a trustee should be replaced

Trustees shoulder a lot of responsibility, and when people set up irrevocable trusts as part of their Massachusetts estate plan, they generally put a lot of thought into whether to choose a person, a professional or an institution. After the designation is made, however, there may be times when a person discovers the choice was not ideal. 

FindLaw explains that a trustee should be replaced when that person or institution does not act in the best interest of the beneficiaries. Mismanagement of assets and breach of fiduciary duty are two such actions. Because trustees must typically be able to communicate effectively with beneficiaries, if there is a breakdown in communication or hostility develops, this is also a valid reason for designating a new trustee.

According to Zacks Investment Research, the process of changing trustees can vary. The trust itself probably includes guidelines for making the change, and state laws may also apply. Regardless of the details of the process, though, the person who made the trust cannot act alone. Once the amendment is made, the current trustee must also sign it, as well as every beneficiary listed in the trust. If everyone does not consent to the change, it may be necessary to get the courts involved. 

A judge reviews the petition of the trustmaker or the beneficiary who desires the change and then either approves or denies it. If the petition is denied, the trustmaker may have the option to create a new trust and transfer the assets to it. This is known as decanting the trust.

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