How Do I Remove a Trustee in Virginia?
Full Question:
Answer:
A court action may be brought against a trustee when a breach of fiduciary duty or theft is claimed. An accounting may be petitioned for and ordered by a court. Fiduciaries, such as trustees and agents, owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3) Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
We are unable to contact an attorney in your behalf. Please feel free to consult our attorney directory at the following link:
http://lawyers.uslegal.com/wills-and-estates/virginia/
You may wish to contact the Virginia Lawyer Referral Service at 1-800-552-7977 or (804) 775-0808 (Richmond area).
Please see the following VA statutes:
§ 55-542.05. Proceedings to appoint or remove trustees. —
A. Proceedings to appoint or remove trustees may be brought by motion
pursuant to §§ 26-48 and 26-50.
B. Proceedings to appoint or remove trustees also may be brought by
petition or bill of complaint. In such a proceeding, beneficiaries who are
not qualified beneficiaries shall not be necessary parties, nor shall it
be necessary to join (i) a trustee who has declined to accept the trust,
resigned or been adjudicated an incapacitated person, or (ii) the
personal representative of a trustee.
§ 26-48. Court may appoint trustee in place of one dead,
resigned, etc. —
When a trustee in a will, deed or other writing (i) dies,
(ii) becomes incapable of executing the trust on account of
physical or mental disability or confinement in prison, (iii)
when residency is statutorily required, removes beyond the
limits of the Commonwealth, (iv) declines to accept the trust,
(v) having accepted, resigns the same, as he may be allowed to
do, (vi) if such trustee is a corporation, is adjudicated a
bankrupt, or for any reason loses its charter, (vii) for any
other reason ceases to be eligible to continue serving as
trustee, or (viii) for any other good cause shown, the circuit
court of the county or city in which such will was admitted to
probate, or such deed or other writing is or might have been
recorded, or if the trustee is a corporation, in which its
principal office in the Commonwealth is located, or in which
the trustee resides, may on motion of any party interested,
and upon satisfactory evidence of such death, incapacity,
confinement, removal, declination, resignation, bankruptcy,
loss of charter, or other loss of eligibility or of such other
good cause, appoint a trustee or trustees in place of the
trustee or trustees named in such instrument.
In addition, the court may appoint a substitute corporate
trustee whenever a corporate trustee removes the management
function over an existing trust which was previously managed
in the Commonwealth to a jurisdiction outside of the
Commonwealth if the court finds that the management of such
trust after such removal results in good cause for the
substitution of such trustee. A corporate trustee that
maintains a place of business in the Commonwealth where one or
more trust officers are available on a regular basis for
personal contact with trust customers or beneficiaries shall
not be deemed to have removed such management function.
§ 26-50. Notice required; certain substitutions
validated. —
A motion under § 26-48 shall be after reasonable notice to
all persons interested in the execution of the trust other
than the plaintiff in such motion, and, if any of the parties
on whom such notice is required to be served is under eighteen
years of age, the court or clerk shall appoint some discreet
and competent attorney at law as guardian ad litem to such
infant defendant, on whom notice may be served. If any such
party is incapacitated or a convict, the notice shall be
served on his committee, guardian or conservator, if any, but
if none, a guardian ad litem shall be appointed for him in the
manner hereinbefore provided for the appointment of a guardian
ad litem for an infant. No notice need be given to a trustee
or, if one has previously been appointed, to a substituted
trustee who has removed from the Commonwealth, declined to
accept the trust, or has resigned, nor to the personal
representatives of one who is dead, or, if the trustee or
substituted trustee is a corporation which has been
adjudicated a bankrupt or whose charter then stands revoked,
no notice need be given to such corporation.
In the case of the substitution of the trustee or trustees
in a deed of trust securing the payment of indebtedness it
shall be necessary to give notice of the motion only to the
trustee or, if one has previously been appointed, to the
substituted trustee (unless notice to him is dispensed with
under the foregoing provisions); any beneficiaries appearing
of record or known to the plaintiff, if any; any debtors
mentioned in the deed of trust; any persons who may be shown
by the deed records to have assumed payment of the
indebtedness in whole or in part; and the person or persons in
whom the equitable title to the property conveyed by the deed
of trust is vested at the time of the motion as shown by the
records. In such case when the written notice of motion has
been filed in the clerk's office of the court having
jurisdiction as defined in § 26-48, service of such notice as
to all parties mentioned in § 8.01-316 may be made in
conformity with the provisions of §§ 8.01-316 through
8.01-318, 8.01-320, 8.01-322 and 8.01-323.
Any such decree or order of substitution heretofore made by
a court of competent jurisdiction is hereby validated.
Nothing herein contained shall be construed as preventing a
court of equity from substituting a trustee in a suit
instituted for that purpose.