How to Remove a Beneficiary or Trustee

Many people establish trusts as part of their estate planning documents. The person who establishes the trust, the settlor, may change their trust with the help of their attorney. However, once the settlor passes away, the trust becomes “irrevocable.” This means the trust may not be changed without a very good reason and the beneficiaries and trustee must go through the court.

The Michigan Legislature has complex laws which regulate any changes to legal estate planning documents. So, the advice and knowledge of an experienced estate planning attorney becomes vital if you need to alter any trust document.

What is a Trust?

A trust is a legal document that a person known as the “settlor” establishes with their attorney. This estate planning document is similar to a will; however, a trust has some advantages. For example, a well drafted trust avoids probate court when settling an estate. This saves time and money. Like a will, the trust document spells out how property and assets are distributed after a loved one passes away. The trustee, named in the trust document, supervises this distribution and has a fiduciary role. In other words, the trustee must follow the trust document.

Removing a Trustee under Michigan Law

The death of a beloved family member is an emotional time. Sometimes disagreements arise over inheritance issues.  Simple disagreements over petty issues are not grounds to remove a trustee. However, the Michigan Legislature (Section 700.7706) does note several examples of when a trustee may be removed:

  • The trustee commits a serious breach of trust.
  • Lack of cooperation among co-trustees prevents administration of the trust.
  • The trustee is unfit, unwilling, or fails to effectively administer the trust.
  • There has been a substantial change of circumstances.

For example, a trustee may have developed dementia over the last several years. Of course, the settlor was unaware this would happen when the trust was established. So, since currently the trustee is unable to fulfill their responsibilities, the court may appoint another trustee.

Also, if family members suspect the trustee is not following the terms of the trust, they may hire an attorney and ask the court to investigate their claims. These complicated cases require experienced legal expertise. Once again, hire an attorney that specializes in this area of law.

Lawyer holding a gavel while a client is holding a trust document and pen

Removing a Beneficiary from a Trust

Sometimes after a loved one passes away, the family discovers a trust document was recently changed. Sadly, dishonest people may take advantage of elderly people. These unscrupulous folks may work in nursing homes, live in the neighborhood, or even be family members.  Perhaps, the family had a copy of a trust from years ago and now they find out a new one was filed. If you find out someone influenced your family member to change their trust document, contact an attorney IMMEDIATELY. There are legal grounds to throw out the new trust if:

  • The settlor lacked the mental capacity to establish a new trust.
  • The settlor was unduly influenced.
  • The settlor was under duress or forced to write a new trust.
  • The document is fake.

Thankfully, Michigan Law protects us from unscrupulous people. Generally speaking, most well executed trust documents proceed as planned.  Folks work hard for their money and assets and want to ensure everything is properly passed down to heirs. So, contact an estate planning attorney if you experience any difficulties executing a trust document.

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