Removing an Unwanted Co-Trustee: Legal Remedies and Strategic Approaches

Having a co-trustee who refuses to cooperate, mismanages trust assets, or puts personal interests first can make administering a trust difficult. If you are dealing with an unwanted co-trustee, you may have legal options to address the issue, including seeking removal. Here is why it may be a good idea to seek the removal of a co-trustee, and how to do so. 

What is a Co-Trustee?

A trustee is a person or organization responsible for managing assets placed in a trust. The trustee has a legal duty to follow the instructions in the trust and act in the best interests of the beneficiaries. This can include managing finances, investing assets, paying expenses, maintaining records, and distributing property as required. A trustee must act responsibly and avoid using trust property for their own personal benefit. They also have a duty to follow the terms of the trust and treat the beneficiaries fairly. 

A co-trustee is someone who serves as a trustee alongside another trustee. Instead of one person handling the trust alone, the co-trustees share responsibility for managing the trust and carrying out the grantor’s instructions. Depending on the trust document, co-trustees may need to agree before making important decisions, such as selling property, investing money, or distributing assets. They are generally expected to communicate, cooperate, and act in the best interests of the beneficiaries. If one co-trustee believes the other is not properly managing the trust, they may have a responsibility to address the problem or take appropriate legal action.

What Problems Can Emerge Between Co-Trustees?

Co-trustees are expected to work together to manage the trust and protect the beneficiaries’ interests. Here are some of the common problems that can emerge:

• Disagreements over investments: Co-trustees may disagree about how trust money should be invested. One trustee may prefer safer investments, while the other may want to take more risks. For example, the co-trustee wants to invest trust funds in stocks, while the other believes the money should remain in a savings account.
• Disagreements over distributions: Co-trustees may disagree about when or how much money should be given to beneficiaries. Suppose that one trustee believes a beneficiary should receive money for college, while the other believes the beneficiary should wait until reaching a certain age.
• Poor communication: Problems can develop when one trustee makes decisions without informing the other. This can make it difficult for both trustees to manage the trust effectively. Imagine that a co-trustee sells trust property without first discussing the sale with the other trustee.
• Misuse of trust property: A trustee may be accused of using trust assets for personal purposes rather than for the benefit of the beneficiaries. Perhaps one co-trustee uses money from the trust account to pay a personal bill.
• Failure to keep records: Trustees generally must maintain accurate records of trust transactions. Missing or incomplete records can create suspicion. Imagine that one trustee cannot explain where part of the trust’s money was spent.
• Conflict of interest: A co-trustee may make decisions that benefit themselves or someone close to them. Imagine a trustee is in favor of selling trust property to a family member for less than its fair value.

How Does Co-Trustee Removal Work?

A trustee is not automatically removed simply because there are grounds for trustee removal. That is, the other trustee or trustees do not have the authority to simply remove the other trustee, unless there is a stipulation in the trust document to that effect. The matter must be brought before the court, and the court must grant the request for removal.

Under Florida law, a trustee may be removed in certain situations when they are no longer properly carrying out their responsibilities. Florida Statutes § 736.0706 provides several grounds for the removal of a trustee. The court may remove a trustee when there is a serious breach of trust, a lack of cooperation among co-trustees that substantially harms the trust’s administration, or when the trustee’s actions create a serious conflict of interest. Removal may also be appropriate when a trustee becomes substantially unable to perform their duties. Florida law also allows removal when the court determines that a change of circumstances has made removal appropriate. 

Frequently Asked Questions

What should I do about a difficult co-trustee?

Having a difficult co-trustee does not automatically mean they can or should be removed. Simply being difficult, stubborn, or having different opinions may not be enough to justify removal. However, if their behavior undermines trust or harms beneficiaries, there may be legal options. 

What happens if a co-trustee is removed?

After a co-trustee is removed, the trust continues, and the remaining trustee can generally continue managing it. Depending on the trust document (for instance, if it specifies a minimum number of trustees), a replacement trustee may be appointed to fill the open position. 

Can misconduct lead to removal of a trustee?

Absolutely. Misconduct can be a serious ground for removing a trustee, especially when the trustee acts against the interests of the trust or its beneficiaries. Examples may include misusing trust assets, failing to follow the trust’s instructions, self-dealing, or violating fiduciary duties. 

What if co-trustees cannot agree on a decision?

Removal of a trustee is an extreme measure. Generally, mere disagreement between co-trustees is not enough to justify removal. Co-trustees can have different opinions about investments, distributions, or other decisions without either one doing anything wrong. However, if the disagreement becomes so serious that it prevents the trust from being properly managed or harms the beneficiaries, then court involvement may be appropriate.

Contact a Florida Trust Attorney 

If you are dealing with a trustee that you believe is not fulfilling his or her duties, an experienced Florida trust attorney can also help protect the trust, its assets, and the interests of its beneficiaries. Ask today about your options.