Dear Quentin,
A relative recently passed away, leaving behind a seven-figure estate. Needless to say, things are getting messy.
When Grandma passed, it was expected by all for the trust to be executed by my aunt for many years, until she recently developed a medical condition that affected her cognitive ability. As such, the successor trustee was switched to my uncle, who was believed by the grantor to be competent in executing the trust.
However, this uncle is impulsive, doesn’t believe in working with lawyers, and thinks he knows what he is doing, yet hasn’t requested a certificate of trust or even notified the bank of the grantor’s death. We are already two weeks after the funeral. He is not trusted by most beneficiaries, and there is some fear he may take the assets across state lines and try to put them in a personal trust.
“‘This uncle is impulsive, doesn’t believe in working with lawyers, and thinks he knows what he is doing, yet hasn’t requested a certificate of trust or even notified the bank of the grantor’s death.’”
I am not a beneficiary, and have no vested interest in this trust. However, I feel stuck as I don’t know what I can do to ensure the proper execution of the trust. This uncle wants to do things his way regardless of estate and trust laws. Is there anything that can be done from the outside looking in — to ensure proper execution and prevent theft?
Basically, Grandma left more to Grandpa’s kids and their families, and this uncle and trustee is upset and hurt by this. For years, he has thought the grandparents favored that side of the family, and now that he is in charge he doesn’t want to honor their wish. I was told by other family members that this uncle did not plan on honoring an amendment reducing one of his siblings’ inheritance.
If I challenge him, I will be called a crook and he will cease talking to me.
Observer Who Wants to Do the Right Thing
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
Dear Observer,
Don’t worry about people not speaking to you, if your intention is to do the right thing. If what you say is accurate and/or true, this uncle would not make the most reliable or trustworthy of friends. If the probate court has reason to believe the trustee is mishandling the estate, it can remove the uncle from his position and replace him with an objective, independent third party.
Either way, if you are not a beneficiary or co-trustee, you likely won’t have the power to petition the probate court to remove this uncle. Only the grantor, who is deceased in this case; co-trustee, of whom there does not appear to be any; beneficiaries, of whom there are quite a few; and probate court will likely have the power to remove him.
According to the law firm Antonoplos & Associates, trustees can be removed for the following reasons: “Self-dealing or stealing trust property; violations of the terms; hostility between the trustee and beneficiaries; mismanagement of trust assets; charging excessive fees; incapacity or insolvency, failure to make accounting or report as required or requested by the beneficiaries.”
“The plaintiff must present clear evidence showing the court that the trustee violated the terms of the trust agreement or their fiduciary duty,” the firm adds. “If the probate court receives enough information showing that the trustee may need to be removed, the court will conduct depositions, issuing subpoenas for records, and receiving accounting records from the trustee.”
The beneficiaries typically have to vote on the removal of the trustee based on the facts, and can do so based on a majority or unanimous decision. They should concern themselves less with who is upset with whom, and why they or you believe this uncle is acting in a certain way, and/or their fears or suspicions about what he might do, and instead focus solely on the facts.
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