A trustee can only remove a beneficiary if the trust document explicitly grants them that authority and applicable laws permit it. In most cases, trustees do not have unilateral power to change the list of beneficiaries, as doing so would alter the fundamental terms of the trust.
When a Trustee May Have Removal Authority
Some trusts include specific clauses that allow beneficiary removal under certain conditions, such as:
- Misuse of Trust Assets: If a beneficiary uses assets for prohibited purposes.
- Legal Violations: If a beneficiary engages in criminal conduct affecting the trust.
- Conditional Beneficiary Clauses: If the trust states that a beneficiary must meet certain requirements to remain eligible.
- In these cases, the trustee must follow the exact process outlined in the trust and comply with relevant state laws.
When a Trustee Cannot Remove a Beneficiary
If the trust does not grant removal authority, the trustee has no legal right to change beneficiaries. In such situations, any alteration would require a court order or trust amendment (if the trust is revocable and the grantor is still alive).
Trustee’s Fiduciary Duty in Removal Decisions
Even when removal authority exists, a trustee must act in good faith, in the best interest of the trust, and without personal bias. Decisions must be supported by documented evidence and comply with both the trust terms and legal standards.
Potential Risks of Beneficiary Removal
Removing a beneficiary can lead to:
- Legal Disputes: The removed party may challenge the trustee’s decision in court.
- Family Conflict: Removal often creates tension among remaining beneficiaries.
- Increased Administrative Burden: Legal defense and court involvement can delay asset distribution.
The Role of Courts in Beneficiary Disputes
If disagreements arise, courts can review whether the trustee acted within their authority. A court may reinstate a beneficiary if it finds the removal unjustified or unlawful.
Seeking Legal Guidance
Because beneficiary removal can trigger serious legal and financial consequences, trustees should consult a qualified probate attorney before taking action. This ensures compliance with trust terms and reduces the risk of liability.
Preventing Disputes Over Beneficiary Status
Grantors can minimize future conflicts by:
- Clearly stating removal conditions in the trust.
- Choosing an impartial trustee.
- Reviewing and updating the trust regularly to reflect changing circumstances.
Deepening Your Understanding of Trust Management
What is a Living Trust?
A living trust is a flexible estate planning tool that allows you to transfer assets during your lifetime, avoid probate, and maintain control until death or incapacity.
Will vs Trust: Key Differences
Comparing wills and trusts reveals which tool—or combination—best suits your estate planning needs.
How to Set Up a Trust
Creating a trust requires careful drafting, selecting a trustee, and transferring ownership of assets to make it effective.
What Does a Trustee Do?
Trustees manage assets, follow the trust’s terms, and act in the best interests of beneficiaries at all times.
Michael Avanesian, the founder and driving force behind Avian Law Group, is a passionate and dedicated attorney with a strong background in personal injury law. As a partner at JT Legal Group, Michael led the growth of the personal injury practice from a single employee to a team of over ninety professionals, securing over $2 billion in settlements for clients in just three years.
