What to Do If You Think Your Trustee Is Not Doing Their Job Right
If you are a trust beneficiary, you have certain rights and expectations. You expect the trustee, who manages the trust, to act in your best interest and follow the terms of the trust agreement. But what if you think the trustee is not doing their job right? What if you suspect the trustee has made mistakes or errors or breached their fiduciary duty to you and the other beneficiaries? What can you do to protect your rights and interests?
Check the Trust Agreement
The first thing you should do is check the trust agreement. This document created the trust and spells out the rules and instructions for the trustee and the beneficiaries. The trust agreement may provide remedies or options if you are unhappy with the trustee’s performance. For example, some trust agreements may allow you to:
- Replace the trustee. Some trust agreements may give you and the other beneficiaries the power to remove and replace the trustee without going to court. If you and the other beneficiaries agree on a new trustee, this may be a quick and easy way to solve the problem.
- Appoint a trust protector. A trust protector is a person who has the authority to oversee the trustee and make specific changes to the trust. Some trust agreements may name a trust protector or give you and the other beneficiaries the power to appoint one. A trust protector can help you monitor the trustee’s actions and intervene if necessary.
- Use alternative dispute resolution. Alternative dispute resolution (ADR) is a way of resolving conflicts without going to court. Some trust agreements may have an ADR clause requiring you and the trustee to use mediation or arbitration to settle disputes. Mediation is when a neutral third party helps you and the trustee communicate and reach a voluntary agreement. Arbitration is when a neutral third party hears both sides and makes a binding decision.
Review Colorado’s Uniform Trust Code
The next thing you should do is review Colorado’s Uniform Trust Code. This law governs trusts in Colorado and provides the rights and duties of trustees and beneficiaries.
The Uniform Trust Code may give you additional remedies or options if the trust agreement does not address your situation or the trustee has violated the law. For example, some sections of the Uniform Trust Code that may be relevant to you are:
- Section 15-5-1001. This section lists the remedies for breach of trust. A breach of trust is a violation by the trustee of a duty they owe to the beneficiaries. Some of the remedies include compelling the trustee to perform their duties, enjoining the trustee from committing a breach of trust, compelling the trustee to pay money or restore property, ordering the trustee to account or report, appointing a special fiduciary, removing the trustee, or ordering other appropriate relief.
- Section 15-5-706. This section explains the removal of trustees. The settlor, a cotrustee, or a beneficiary may request the court to remove a trustee. In some circumstances, if the breach is particularly egregious, the court can remove a trustee on its initiative. The court may remove a trustee if the trustee has committed a serious breach of trust, the trustee is unfit, unwilling, or unable to administer the trust effectively, or the removal of the trustee best serves the interests of the beneficiaries and is not inconsistent with a material purpose of the trust.
Consult a Lawyer
The last thing you should do is consult a lawyer. A lawyer can help you understand your rights and options, advise you on the best action, and represent you in legal proceedings. A lawyer can also help you communicate with the trustee and the other beneficiaries, negotiate a settlement, or draft a new trust agreement. A lawyer can protect your interests and help you achieve your goals.
If you are looking for a lawyer specializing in trust administration in Colorado, contact us at 720-821-7604 or click the button above to schedule an evaluation with one of our attorneys. We have the experience and expertise to help you with any trust-related issues. We offer a free initial consultation and a reasonable fee structure. We are committed to providing you with quality legal services and personalized attention. Call us today to schedule an appointment.
What Next?
If you think it might be time to think through your estate plan, you can:
- Call us at 720-821-7604 to schedule an "Attorney Evaluation Session" to determine whether our firm would be a good fit for your needs. Or fill out our contact form to have us call you.
- Visit our estate administration page to learn how proactively thinking through your estate plan can protect you and your family, minimize hassle, lower the chance of family discord, and minimize or eliminate taxes.
- Learn more by reading our blog or watching our videos.
