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OLR Research Report


July 23, 2009

 

2009-R-0271

REMOVAL OF TRUSTEE

By: George Coppolo, Chief Attorney

You asked for a summary of the law regarding the removal of a trustee.

SUMMARY

The law authorizes a probate court to remove a trustee, after notice and hearing, for the following reasons:

1. the trustee becomes incapable of executing, or neglects to perform, the duties of trustee;

2. the trustee wastes the estate;

3. the trustee fails to furnish any additional or substitute probate bond the court ordered;

4. lack of cooperation among co-trustees substantially impairs the administration of the trust;

5. removal of the trustee best serves the beneficiaries' interests because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively; or

6. there has been a substantial change of circumstances or removal is requested by all of the beneficiaries, and (a) the court finds that removal of the trustee best serves the interests of all the beneficiaries, (b) removal is not inconsistent with a material purpose of the governing instrument and (c) a suitable co-trustee or successor trustee is available.

Any person or entity removed as a trustee has the right to appeal the removal to the Superior Court.

REMOVAL OF A TRUSTEE

By law, a probate court having jurisdiction may, upon its own motion or upon the application and complaint of any interested person or of the surety on the trustees' probate bond, after notice and hearing, remove any trustee for any of the following reasons:

1. the trustee is incapable of executing his or her duties as a trustee, neglects to perform the duties of trustee, wastes the estate, or fails to furnish any additional or substitute probate bond the court ordered;

2. lack of cooperation among co-trustees substantially impairs the administration of the estate;

3. unfitness, unwillingness, or persistent failure of the trustee to administer the estate effectively, and the court determines that removal of the trustee best serves the beneficiaries' interests; or

4. there has been a substantial change of circumstances or removal is requested by all of the beneficiaries, and the court finds that removal of the trustee best serves the interests of all the beneficiaries, is not inconsistent with a material purpose of the governing instrument and a suitable co-trustee or successor trustee is available (CGS 45a-242(a)).

REMOVAL OF A SUCCESSOR CORPORATE TRUSTEE

The law specifies that a successor corporate trustee or other fiduciary may not be removed in a manner as to discriminate against state banks or national banking associations. A consolidated state bank or national banking association or any receiving state bank or national banking association may not be removed solely because it is a successor fiduciary.

A “ corporate fiduciary” means a bank, out-of-state bank, trust company, or any other corporate entity that is authorized to act as a fiduciary in Connecticut. A “ successor fiduciary” means a corporate fiduciary that is substituted for another corporate fiduciary because of a merger or consolidation of corporate fiduciaries, the acquisition of the stock or assets of a corporate fiduciary, or the transfer by a corporate fiduciary of all or a portion of its trust and fiduciary business to another corporate fiduciary (CGS 45a-245a)

RESIGNATION OF TRUSTEE

The probate court, after notice and hearing, may accept or reject the written resignation of any trustee. A resignation may not be accepted until the trustee has fully and finally accounted for the administration of the trust that the court finds acceptable (CGS 45a-242(b)).

RESIGNATION OR REMOVAL OF TESTAMENTARY TRUSTEE

Trustees appointed by a testator to execute a trust created by will may resign or be removed, and the vacancies filled by the court having jurisdiction in the same manner unless the will otherwise provides (CGS 45-242(c)).

APPOINTMENT OF SUCCESSOR TRUSTEE

Except as otherwise provided in a will regarding a testamentary trust, upon the death, removal, or acceptance of the resignation of any trustee before the completion of the fiduciary's duties, the probate court may appoint a suitable person to fill the vacancy and the successor fiduciary must give a probate bond (CGS 45-242(d)).

SURVIVAL OF LAWSUITS

All law suits in favor of or against an original trustee survive and may be prosecuted by or against the person appointed to succeed a trustee (CGS 45-242(e)).

APPEAL FROM REMOVAL OF TRUSTEE AND EFFECT ON SUCCESSOR TRUSTEE

Any trustee that has been removed by a probate court may appeal to Superior Court. The appointment of a successor is not stayed by the appeal but is considered a temporary appointment. The successor trustee must act during the pendency of the appeal and until the appeal is withdrawn or there is a final judgment.

If the removal is sustained on appeal, the appointment of a successor trustee becomes permanent. If the order of removal is vacated on appeal, the appointment of the successor trustee may be terminated, subject to the successor's obligation to render a final account, and the acts of the successor trustee for the period of the pendency of the appeal remain valid (CGS 45a-243).

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