What is the Process for Appointing a New Corporate Trustee?
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If you want to merely change trustees, it may not be necessary to terminate the trust. The terms of the trust document will govern the appointment of a successor trustee. Even with an irrevocable trust, you or your beneficiaries can have the right to change the corporate trustee. If the document does not name a successor or procedure for appointing a successor, a court having jurisdiction over the trust will appoint the successor trustee. Similarly, if a trust instrument does not provide a procedure for resignation, a court must approve any resignation. Until a court has approved a trustee resignation, the trustee still has all of the responsibilities (and liabilities) of a fiduciary.
The terms of the trust document will govern the appointment of a successor trustee. If the document does not name a successor or procedure for appointing a successor, a court having jurisdiction over the trust will appoint the successor trustee. Similarly, if a trust instrument does not provide a procedure for resignation, a court must approve any resignation. Until a court has approved a trustee resignation, the trustee still has all of the responsibilities (and liabilities) of a fiduciary. If there is a compelling reason to change the trustee, such as gross misconduct or abandonment of trustee duties, a probate court with jurisdiction over the trust can be moved to order a change of trustee
Read more: How to Change the Trustee of an Irrevocable Trust | eHow.com http://www.ehow.com/how_5892196_change-trustee-irrevocable-trust.html#ixzz1E45YJon2
Generally, a trust created in another state may be enforced as long as it complies with the laws of the state where it was created. A foreign corporate trustee typically has to qualify to do business in the state only if it maintains principal place of administration for a trust in the state. This does not require qualification if the principal place of trust administration is not in the state. Thus, a foreign trustee could be appointed by a state court and it could move the principal place of administration to the state in which it is organized.
Some states determine domicile of a trust for purposes of state income taxation based on the residency of the trustee or where the administration of the trust occurs. Appointing a trustee who lives in one of those states could subject the trust to state income taxation that might not otherwise exist. We suggest you consult a local attorney or tax professional who can review all the facts and documents involved.
Please see the following PA statutes to determine applicability;
20 Pa.C.S.A. § 7765. Resignation of trustee; filing resignation
(a) Court approval. — A trustee may resign with court approval.
(b) Without court approval if authorized by trust instrument. — A trustee may resign without court approval if authorized to resign by the trust instrument.
(c) Without court approval and without authorization in trust instrument. —
(1) Unless expressly provided to the contrary in the trust instrument, an individual trustee may resign without court approval and without authorization in the trust instrument if:
(i) there is at least one cotrustee and all cotrustees consent in writing to the resignation; and
(ii) all the qualified beneficiaries consent in writing to the resignation.
(2) This subsection shall not authorize the sole trustee of a trust to resign unless the trust instrument names a successor trustee or provides a method for appointing a successor trustee, and in either case the resignation shall not be effective until the successor trustee accepts the appointment in writing.
(d) Liability. — The resignation of a trustee shall not by itself relieve the resigning trustee of liability in connection with the administration of the trust.
(e) Filing resignation. — A resignation of a trustee may be filed with the clerk of the court having jurisdiction over the trust.
20 Pa.C.S.A. § 7766. Removal of trustee — UTC 706
(a) Request to remove trustee; court authority. — The settlor, a cotrustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initiative.
(b) When court may remove trustee. — The court may remove a trustee if it finds that removal of the trustee best serves the interests of the beneficiaries of the trust and is not inconsistent with a material purpose of the trust, a suitable cotrustee or successor trustee is available and:
(1) the trustee has committed a serious breach of trust;
(2) lack of cooperation among cotrustees substantially impairs the administration of the trust;
(3) the trustee has not effectively administered the trust because of the trustee's unfitness, unwillingness or persistent failures; or
(4) there has been a substantial change of circumstances.
(c) Court remedies. — Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order appropriate relief under section 7781(b) (relating to remedies for breach of trust — UTC 1001) as may be necessary to protect the trust property or the interests of the beneficiaries.
(d) Procedure. — The procedure for removal and discharge of a trustee and the effect of removal and discharge shall be the same as that set forth in sections 3183 (relating to procedure for and effect of removal) and 3184 (relating to discharge of personal representative and surety).
20 Pa.C.S.A. § 7767. Delivery of property by former trustee — UTC 707
(a) Duties and powers of trustee. — Unless a cotrustee remains in office or the court otherwise orders, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property until the trust property is delivered to a successor trustee or other person entitled to it.
(b) Delivery of trust property. — A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee or other person entitled to it.
20 Pa.C.S.A. § 7769. Reimbursement of expenses — UTC 709
(a) Reimbursement from trust property. — A trustee is entitled to be reimbursed out of the trust property, with interest as appropriate, for:
(1) expenses that were properly incurred in the administration of the trust; and
(2) to the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.
(b) Advance. — An advance by the trustee of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest.