What is involved in trustee resignation?

Trustee resignation should usually occur according to the terms of the trust. Other times, a trustee resignation form may be used.

It is important that a trustee who wishes to withdraw do so properly in order to avoid any future liability. As long as you are a trustee, you are a fiduciary of the trust with a duty of loyalty and a duty of care to the trust and the beneficiaries. This includes resigning as trustee.

You must resign properly in order to ensure that you are not held responsible for adverse consequences were they to occur during or after your resignation.

Even if the trust seems absolutely clear, you may want to consult with an attorney for help and to ensure you are in compliance with the trust terms and the law.

• Check the original trust document to see if a successor trustee is listed. Ideally, a trust will list a successor trustee. If they do not, then request one when you agree to become the trustee. If there is no successor trustee listed, a new trustee will have to be appointed. The court will likely do this, get help from an attorney.
• Prepare a full financial and investment report of the trust along with all trust-related documents and contact information for outside investment relations. This “Trust Kit” will make the transition for the new trustee much easier and show that you acted responsibly to help you avoid any future liability.
• Obtain a Trustee Resignation Form from the court, online, or from an attorney and complete and sign it in the presence of a witness and notary.
• Make three copies of your resignation. Give one to the new trustee in the “Trust Kit”, one to the trust beneficiary, and keep one on file.
• Assist the new trustee with any other transitional issues as needed.

Again, it is best to consult with an attorney if you have any questions regarding your resignation and the transition to a new trustee.

Case Studies: Trustee Resignation

Case Study 1: The Proper Resignation Process

Sarah, a trustee of a family trust, decides to resign due to personal reasons. She consults with an attorney who guides her through the proper resignation process. They review the trust terms and ensure that Sarah complies with all the necessary legal requirements. By following the correct procedure, Sarah minimizes her potential liability and ensures a smooth transition to a new trustee.

Case Study 2: Ambiguous Trust Terms

John, a trustee of a charitable trust, encounters a situation where the trust terms regarding resignation are ambiguous. Uncertain about the appropriate course of action, John seeks legal advice from an attorney specializing in trust law. The attorney carefully analyzes the trust document and provides guidance on how John should proceed to protect his interests and fulfill his fiduciary duties.

Case Study 3: Post-Resignation Consequences

David resigns as a trustee of a business trust. After his resignation, the trust faces unexpected financial difficulties, leading to legal disputes. Although David had followed the correct resignation process, he becomes concerned about potential liability for the adverse consequences that occurred after his resignation. David seeks counsel from an attorney to understand his legal position and protect himself from any unwarranted claims.