What can be done if a Trust is not being administered according to its terms?

Myself and 2 others are beneficiaries of a Trust, which includes a working farm. The husband of one of the beneficiaries is the trustee. The Trust is not being administered according to its terms. For example, the farm buildings are being used for the personal use of the trustee and no income is generated from the buildings. Furthermore the trustee is no longer able to administrate and has turned over management of the trust to a relative, done with no consultation with 2 of the beneficiaries. I am interested in breaking the Trust, which will not expire for 16 more years. Can this be done?

Asked on February 26, 2015 under Estate Planning, North Carolina

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The trustee can be sued for breach of trust and removed as trustee.  If there are procedures in the Trust provisions for removal of the trustee and appointment of a successor trustee, those provisions should be followed.  If the Trust is silent regarding removal of the trustee and appointment of a successor, a petition can be filed with the court by the beneficiary, seeking removal of the trustee and appointment of a successor trustee.

The remedy of removing the trustee and appointing a successor would also be a remedy in the lawsuit mentioned above for breach of trust filed against the trustee.  The trustee has committed a breach of trust by not complying with the Trust terms including abdicating responsibility for administration of the Trust.  The trustee has also committed a breach of trust by failing to make the Trust property productive (no income is generated from the buildings).  The trustee has a duty to use prudent investments to generate income for the Trust.  "Breaking" the Trust is unlikely since it is to be in effect for another sixteen years; however, the above remedies of a lawsuit for breach of trust against the trustee and removal of the trustee along with appointment of a successor  will allow the Trust to proceed as intended by the settlor (creator of the trust).


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