You have many estate planning options at your disposal. Amongst them is the use of various trusts. These entities are managed by an individual appointed to adhere to the trust’s terms and are typically named by the individual who created the trust. Given the responsibility involved in managing a trust, most estate planners name someone they can rely upon to act with integrity and goodwill. But sometimes an initially named trustee doesn’t live up to their obligations. At that point, can you change trustees?
When it might be time to designate a different trustee
You can certainly replace a named trustee. In fact, there may be several circumstances when doing so is in your best interests. Here are some of them:
- The trustee has mismanaged the trust’s funds.
- The trustee’s health has declined to the point that they’ve become incapacitated.
- The trustee has shown favoritism.
- The trustee has developed a conflict of interest.
- The circumstances of the trustee’s life change to the point that it becomes unrealistic for them to effectively manage the trust.
- The trustee has engaged in some other type of misconduct.
- The trustee has made bad investment decisions on the trust’s behalf.
- The trustee unjustifiably denies asset distribution to named beneficiaries.
- The trustee keeps a poor accounting of the trust’s assets.
Any one of these issues is severe enough to warrant a change. So, be sure to keep tabs on the trusts you’ve established in your lifetime so that you can make any changes that may be necessary.
Find answers to your estate planning questions
There are a lot of questions that can come up during the estate planning process. To create the effective estate plan that suits your needs, you need answers to those questions. So, before fully jumping into the process, it might be wise to discuss the circumstances with estate planning professionals, that way you can make the fully informed decisions that are right for you.