Grounds to remove a trustee in South Dakota

| Jul 31, 2020 | Trust And Probate Litigation

Your father set up a trust for you and your brothers 10 years before he died. Naturally, he chose someone he knew well to be the trustee: his school friend Stanley. The only issue is, Stanley is now 93 years old, and while he is a good, honest man, he is not as mentally agile as he once was.

There are various reasons for wanting to replace a trustee, but only specific grounds on which you can do it in South Dakota. Here are some of them:

  • It is in the conditions of the trust: When your dad created the trust, he had the possibility of inserting removal clauses. For instance, he could have said Stanley could be replaced when he reached 90 years old. Or that you could choose to replace him when you were 50 years old.
  • Breach of trust: If you find out Stanley has been siphoning money out of the trust to gamble on the horses, he will have broken the trust placed in him.
  • The trustee is not up to the job: If Stanley is no longer fit to do the job due to ill health, is no longer willing or has he not been fulfilling his role, a court could remove him, if in the interests of the beneficiaries to do so.
  • All beneficiaries agree: A South Dakota court will need to know why you want to remove the trustee. Your reasons must be in line with the original purpose of the trust.
  • Changes to the trustee: Sometimes, financial institutions, rather than individuals, are named as trustees. If these institutions undergo significant changes, such as mergers or moves, a court may find grounds to replace them.
  • Problems between trustees: If your father had appointed Stanley and your Aunt Sally as trustees, perhaps they fell out and cannot work together. If their inability to co-operate damages the trust, you could get one or both removed.

A trust is a legal entity, so you will need legal help if you want to make changes such as removing a trustee.