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Can a Trustee Remove a Beneficiary From a Trust

Posted on Sat Dec 9, 2023, on Trusts

From Our “Ask a Question” Mailbag: “Can a Trustee Remove a Beneficiary From a Trust?”

Can a Trustee Remove a Beneficiary From a Trust

Trustee Removal Lawyer Brian Perez.

Can a Trustee Remove a Beneficiary From a Trust?

In general, a Trustee cannot remove a beneficiary from a Trust. However, the Trust language may allow the Trustee to remove a beneficiary or reduce distributions.  Furthermore, Trustees are often granted broad powers to decide how much, if any, the Beneficiary receives. In that case, Beneficiary behavior may result in exclusion.  Let’s address these issues in detail.

What Is a Trustee and Beneficiary?

Before explaining the powers of a Trustee to remove a Beneficiary, let’s ensure you understand what a Beneficiary and Trustee are.

A Trustee is a person or entity that oversees assets for the benefit of a Beneficiary.  The Beneficiary is typically a third party, but there are trusts where the Trustee and Beneficiary are the same person (see Revocable Living Trusts). The Trustee is appointed by the Grantor (who formed the trust). The Trustee owes the Beneficiary a fiduciary duty to follow the trust terms and act in the Beneficiary’s best interests.

The Trust Beneficiary is a person, or a group of people, for which the Trust was created. The Grantor designates both the Beneficiary and the Trustee.

The Trustee has certain powers granted by law and by the Trust to enable them to carry out their fiduciary duty.  Similarly, the Beneficary have powers to help ensure they are informed about what the Trustee is doing and that they are obtaining the benefits the Grantor intended.

Both Beneficary and Trustee are served by hiring a Trust Attorney. A Trust Lawyer will help you understand your rights.

What Powers do Trustees Have?

Each Trust is different. A Trustee has the powers that the Trust terms gives them, as long as those powers do not conflict with the law.  Further, state laws grant all Trustees certain rights and powers unless the Trust says otherwise. (for example, see Pennsylvania Probate Code. and New Jersey Probate Code).

For example, unless excluded by the Trust’s language, in most states  Trustees have the power to:

  • Sell Trust property.
  • Use the Trust assets to buy property.
  • Secure and insure Trust assets.
  • Repair and maintain Trust assets.
  • Invest Trust assets.
  • Pay Trust expenses and bills.
  • Make distributions, or make payments, to/for the Beneficiary per the Trust terms.

What Powers do Trust Beneficiaries Have?

A Trust Beneficiary does not have to simply accept what the Trustee gives them. Trust Beneficiaries have rights to make sure they are reasonably informed, are receiving the intended benefits, and if not they have the right to hold the Trustee accountable.

These rights depend on the Beneficiary being actively involved.  If the Benefiicary doesn’t stand up for their rights, then the Trustee can essentially do whatever they want. This is why Beneficiaries often hire Trust Lawyers.  The Beneficiary’s Trust Lawyer informs them of their rights and helps them enforce those rights.

For example, in most states unless excluded by the Trust’s language, Trust Beneficiary’s have the power to:

  • Information about the Trust.
  • Receive a detailed accounting.
  • Receive authorized support or distributions.
  • Have your Trust Lawyer petition the court to remove the Trustee.
  • Have your Trust Lawyer petition the court to surcharge the Trustee.
  • Obtain a Formal Accounting, by Trust Lawyer Petition, should the Trustee provide no or an inadequate accounting. 

Can a Trustee Remove a Beneficiary From a Trust?

By reviewing the rights listed above, you will see that one of the powers a Trustee is typically NOT given is to remove a beneficiary.  So, in short, a Trustee cannot remove a beneficiary from a trust. 

But!  There is always a but.  It is not unusual for a Grantor to give the Trustee discretion on using the trust assets for a Beneficiary. This means that the Trustee has the discretion to pay a Beneficairy’s bills, or to NOT pay. In this case, a Trustee could simply decide to stop making payments. This is why each Trust is different, and why you should have your Beneficary Representation Lawyer must review the Trust and help you understand your rights.

Our Trust Dispute Team:

Attorney Brian Perez, pictured above, is part of our Trust Dispute Litigation team. This team regularly handles cases involving enforcing Beneficiary Rights, advising Trustees, and attempts to remove Trustees.  At other times, we defend the Trustee whom the Beneficiaries try to remove. This is our area of the law. We don’t dabble in other areas; we focus on estate litigation. Attorney Perez works with a team that includes Department Head Attorney Glen Ridenour.

If you have an problem with a Trustee or a Beneficiary, don’t go to someone who dabbles in the area. In Pennsylvania and in New Jersey we focus on one court: the one that oversees Trusts. 

In Conclusion, Can a Trustee Remove a Beneficiary From a Trust?

I hope you found this short article addressing Can a Trustee Remove a Beneficiary From a Trust useful. I have also included some links for more detailed information.

If you are a Trustee needing guidance, or a Benefiary who feels they are being mistreated, contact us. Let our Trustee Dispute Lawyers help walk you through what can be a confusing process. Feel free to contact our office for a free consultation. 

It’s All We Do Wills, Trusts, Probate, and Estate Litigation!

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Tags:

Beneficiary, Beneficiary Dispute Lawyer, Trust Beneficiary Dispute Attorney, Trustee

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