Can the Trustee of a Trust Resign?

There are several questions that come up as we help families through estate planning. Questions about living wills are common, and when it takes affect. We also gets questions about who the trustee of their trust will be. And as a follow up question, what if that person does not wish to be the trustee?

Picking a trustee can be difficult especially if there are many moving parts. For couples with young families, it may make sense to have the guardian of the children be the trustee. Or, it could make more sense to distribute the duties and have a person manage the trust (the distribution of money) then a different person(s) take care of the children. All families are different!

Today, we're walking through specifically what happens if the person(s) you choose decides they don't want to act as the trustee.

A trustee of a trust can resign, even if they have been the trustee for a period of time. But the process depends on the terms of the trust document and applicable state laws. Here’s an overview:

Review the trust document
Many trust agreements include specific provisions about trustee resignation, including how and when a trustee can resign and the steps that must be followed. The document may require the trustee to provide written notice to the trust beneficiaries or a co-trustee.

What does Florida law say?
If the trust document does not specify how a trustee can resign, state laws govern the process. In Florida, the resignation of a trustee is governed by Section 736.0705 of the Florida Trust Code. According to this statute, a trustee may resign by:

1. Providing Notice: Delivering at least 30 days' notice to the qualified beneficiaries, the settlor (if living), and all co-trustees.
2. Court Approval: Obtaining approval from the court, which may impose conditions necessary to protect the trust property.

It's important to note that a trustee's resignation does not absolve them of liability for actions or omissions that occurred during their tenure.

Successor Trustee
A successor trustee is typically named in the trust document to take over when a trustee resigns, dies, or becomes unable to serve. If no successor is named, the court may appoint one.

Final Fiduciary Responsibilities
Before resigning, the trustee must ensure all fiduciary duties are fulfilled, such as accounting for the trust assets and transferring records to the successor trustee. They must:

• Notify the Necessary Parties: Provide formal written notice as required by the trust document or state law.
• Prepare a Final Accounting: Present the trust’s financial status to the beneficiaries or successor trustee.
• Transfer Trust Assets: Handover control of trust assets to the successor trustee.
• Seek Court Approval (if required): File a petition with the court if necessary.

Do you have questions about naming a trustee or specific questions about trust administration? Give us a call.