As a family trust moves into its second or third generation, it’s almost inevitable that someone’s going to be unhappy with the trustee. The good news is that most well-drafted trust agreements include a mechanism for replacing trustees as and when needed. Now the bad news: in the absence of good drafting trust beneficiaries may have to sue for the removal of their trustee. In the past the only grounds for that kind of suit was a showing of some kind of malfeasance or negligence. This type of litigation is fraught with uncertainty and usually very expensive to pursue. Fortunately for Florida trust beneficiaries, as of 2007 we’ve adopted § 706(b)(4) of the Uniform Trust Code, which is the UTC’s “no fault” trustee removal provision. This UTC provision is incorporated into our trust code atF.S. 736.0706(2)(d), and it empowers a court to remove a trustee without cause if:
[R]emoval is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and isnot inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.
Here’s the official commentary to the UTC provision, explaining the rule’s underlying rationale:
It has traditionally been more difficult to remove a trustee named by the settlor than a trustee named by the court, particularly if the settlor at the time of the appointment was aware of the trustee’s failings. . . . Because of the discretion normally granted to a trustee, the settlor’s confidence in the judgment of the particular person whom the settlor selected to act as trustee is entitled to considerable weight. This deference to the settlor’s choice can weaken or dissolve if a substantial change in the trustee’s circumstances occurs. To honor a settlor’s reasonable expectations, subsection (b)(4) lists a substantial change of circumstances as a possible basis for removal of the trustee. Changed circumstances justifying removal of a trustee might include a substantial change in the character of the service or location of the trustee. A corporate reorganization of an institutional trustee is not itself a change of circumstances if it does not affect the service provided the individual trust account. Before removing a trustee on account of changed circumstances, the court must also conclude that removal is not inconsistent with a material purpose of the trust, that it will best serve the interests of the beneficiaries, and that a suitable cotrustee or successor trustee is available.