A trustee has a responsibility to follow trust instructions. They also have a fiduciary duty to the beneficiaries of the trust. They should put the best interests of beneficiaries first whenever making decisions about trust management.
Most of the time, trustors are very clear about who they want included as beneficiaries and when those beneficiaries are eligible for distributions from the trust. For the most part, trustees simply follow the instructions provided by trustors. In certain situations, trustees may recognize that the situation does not align with the wishes of the trustor. In that situation, they might consider seeking the removal of a beneficiary.
Can the person administering a trust alter who can receive distributions as beneficiaries?
Every trust dispute is unique
The type of trust, the resources used to fund it and even the instructions provided by the trustor can all influence whether or not the trustee can remove a specific beneficiary. As a general rule, trustees typically do not have the authority to alter trust instructions.
However, there are exceptions to that standard rule. One scenario in which a trustee could remove a beneficiary is when they are the trust’s creator. A trustor who serves as the initial trustee can modify the trust based on their changing relationships and the conduct of the beneficiaries they previously selected. It may also be possible to remove a beneficiary when their inclusion is obviously the result of them previously exerting undue influence on a vulnerable trustor.
Other times, the trustee may not have played a role in the creation of the trust and has no proof of undue influence. Still, they can clearly show that a beneficiary does not qualify for trust distributions because they have failed to meet the requirements imposed by the creator of the trust.
In such scenarios, they may not need to formally remove a beneficiary. Declining to distribute resources to them can be sufficient. In situations where trustees worry about beneficiaries misusing resources or undermining the intent of the trust, they may need to sit down and discuss the situation with a legal professional.
Evaluating trust documents and fiduciary concerns can help trustees understand their options. Modifying a trust or pursuing trust litigation could both be appropriate reactions to the misconduct of beneficiaries and similar challenging situations. Trustees who have strong legal support when making difficult decisions about trust administration are less likely to make mistakes or face legal controversy over their choices.