How Do You Replace a Trustee When the Trustee Resigns?
Full Question:
Answer:
The answer will depend in part on the terms in the trust document, such as whether it names a successor trustee or procedures for naming one. It is possible for a majority of the beneficiaries to petition the court to appoint a nominated person or entity as successor trustee.
A deceased's debts should be paid with the property in their estate (the property left at their death). children don't inherit their parent's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt so that the child's name is on the debt also, and it isn't a separate debt. Spouses will generally only be liable for a separate debt of the deceased if they live in a community property state. However, state laws vary about which marriage partner is responsible for certain debts, depending upon when the debt was incurred, the identity of the debtor, or the purpose of the debt
Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. Be advised that when a child inherits property that is collateral for a debt -- for example, a car that is not paid for or a house with a mortgage -- the debt comes with the property. If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that if the deceased parent died with little or no money in their accounts and didn't own a home, unsecured debt such as credit card debt will not be paid to the creditors.
Please see the following HI statute:
§ 554-2. Nomination by beneficiaries; appointment of trustees.
(a) Whenever any appointment of a trustee under a private trust is made
by any court of record, if, prior to such appointment, beneficiaries who
constitute a majority both in number and interest of the beneficiaries of
the trust (as hereinafter defined) nominate for the trusteeship by an
instrument or instruments in writing filed in the court any qualified
person or corporation worthy in the opinion of the court to be appointed,
the court shall appoint the nominee as the trustee, unless the express
terms of the trust provide an effective method of nomination or
appointment. No person so nominated as trustee by the beneficiaries of any
such trust shall be held disqualified to be appointed or to act as the
trustee for the sole reason that the person is a beneficiary or a
possible beneficiary under the trust estate.
(b) The term "majority both in number and interest of the beneficiaries
of the trust," as used in this section, means a majority of the competent
adult beneficiaries holding more than one-half of the value of the then
vested interests held by all the competent adult beneficiaries in the
trust; provided that if the guardian of any spendthrift, non compos
person, or minor, owning such a vested interest, when the guardian is not
an adult beneficiary, or married to an adult beneficiary, of the trust,
executes or joins in the execution of any instrument of nomination and
presents the same to the court (each such guardian being hereby authorized
in the guardian's discretion either to execute or to refrain from
executing the instrument of nomination, as in the guardian's judgment
shall be in the best interest of the guardian's ward), then the
spendthrift, non compos person, or minor, and the value of the
spendthrift's, non compos person's, or minor's interest shall be included
in determining the majority both in number and interest of the
beneficiaries of the trust. The value of the then vested interests shall
be determined as of the date of the presentation of the instrument or
instruments of nomination to the court, in the manner provided for the
appraisal of similar interests under the laws of the State for inheritance
tax purposes and as the same would be valued for the purposes if the
trust had been created by instrument made in contemplation of the death
of the person who created the trust and the trust had come into existence
and the death had occurred on the date of presentation of the instrument
or instruments of nomination. When more than one instrument is presented
to the court designating the same nominee, the date of presentation for
the purposes of this section shall be deemed to be the date when the last
instrument is so presented.
(c) This section applies to trusts created before, as well as to those
created after April 28, 1943.