A general estate plan often includes a trust. Its purpose is generally to provide for underage relatives who are unable to provide for their own care. It can include family pets as well. Sometimes it is also prepared as a guarantee that the preparer’s exact wishes for the distribution of assets are carried out fully and precisely. When a trust is prepared, there must be a trustee designated to carry out the terms of the trust. Additionally, the beneficiaries of the trust must be named. There also must be explicit instructions for how assets are to be distributed. If you are in the process of preparing a trust, or in the more general process of estate planning, you should enlist the aid of a highly skilled and knowledgeable estate planner.
Definition of a Trust
A trust is a legal document established by an individual termed the settlor, in conjunction with their attorney. This is one of the documents typically included in estate planning. It is very similar to a last will and testament, although it has some distinct advantages over a last will. For one thing, a well-prepared trust will be able to avoid probate court when the estate gets settled. This saves a great deal of money and time because the trust will explicitly detail how property and assets are supposed to be distributed when someone passes away. The trustee will be a person named in the trust document. That person is responsible for supervising distribution of all assets. However, the trustee is obliged to follow the directions as set forth in the trust itself.
Removing a Beneficiary From Your Trust
Once a beneficiary has been named in a trust document, the process to have them overturned as a recipient of assets can be extremely complicated. It is still possible to have a beneficiary removed from a trust. However, it will be absolutely necessary for all the directives for removal to be reviewed and followed with precision. Generally, these steps will be stated in the trust itself. This process must be used when a beneficiary is removed from the trust.
It must also be seen that the trustee is acting on behalf of all the other beneficiaries, and is carrying out his/her duties in good faith. The section of a trust that provides guidance and instruction about how a beneficiary might be removed is known as the trust deed. In general, there are two criteria which are in place to have a specific beneficiary removed from a trust. The first one is that a beneficiary can personally sign a legal document in which they decline acceptance of any assets named in the trust.
The second way that a beneficiary can be removed is when a trustee uses their discretionary powers to remove a beneficiary in accordance with the instructions provided in the trust deed. The key factor about this approach is that this discretionary power used by the trustee must be clearly identified and granted in the language of the trust deed.
If it is established that the trustee has the power to subtract a beneficiary from the trust, the trustee must prepare a deed of variation. This document states clearly that the trustee intends to use the discretionary power conferred upon them to make a change to the beneficiary pool. A deed of variation must be in full compliance with all instructions provided in the body of the trust deed. After the process has been executed, the deed of variation must be retained and kept as part of the original Trust.
Disputing a Removal
It does occasionally happen that a trustee has a less-than-honorable motive for trying to remove a beneficiary from a trust. When this happens, the beneficiary is allowed to question and seek legal assistance to avoid having themselves removed as a beneficiary. If you are a beneficiary and you believe that the trustee is trying to remove you for an improper reason, and one not specifically allowed for by the trust deed, you are within your rights to seek legal advice and attempt to have the removal blocked. If the courts can determine that the trustee did indeed act improperly, the beneficiary removal process will be terminated, and you will be reinstated as a beneficiary of the trust.
You can contact Alfano Law Office by calling (603) 856-8411 or at this link.