The role of trustees is chiefly to manage the assets in their trust for the advantage of the beneficiaries: property trustees ensure that the house is protected, insured, secure and available for the life tenant; trustees of money must invest the fund wisely, seeking tax advice and making fair decisions as to how money is advanced for the use and benefit of the beneficiaries.
However, some settlors or beneficiaries may grow wary of their trustees. They may feel unfairly side-lined and neglected, or believe that the trustees are abusing their powers.
In some lifetime settlements, the settlor may retain a power to replace trustees. This must be explicitly provided in the trust documentation itself. Failing this, there are very few powers to easily remove trustees.
If the trustee is unwilling to retire from their role, they may need to be removed by a court order. In order to remove a trustee, a beneficiary must demonstrate that the trustee is failing their duties of faith – their “fiduciary duties” – to the detriment of the trust. This could include negligent accounting, loss of capacity, refusing to take notice of beneficiaries, failure to submit tax returns, embezzlement, or using the fund for their own purposes.
If a beneficiary can demonstrate such a ground for a breach of duty, they can apply to the court for an order to have the trustee removed and replaced. But the evidence must clearly show a specific breach of duty: simply not getting one’s way, or personally distrusting the trustee, would be insufficient.
Even if good grounds are found, applying to the court will take time, money and legal assistance.
As such, it can be incredibly difficult to remove a trustee. The best advice is to select capable and conscientious trustees in the first instance. Otherwise, it is an uphill struggle to correct an unsuitable appointment at a later stage: and even then, ordinarily, only at a time when harm has already been caused to the beneficiaries.