What it Takes to Change Your Corporate Trustee
Navigating the Road to a New Trustee...
What it takes to remove your current trustee, and improve the performance of your portfolio, with better service and customization.
If you ever have the chance to speak to beneficiaries who have been successful in removing their trustees, you'll most likely hear about their endless hassles, and bitter court fights against their trustees.
In the past, beneficiaries rarely questioned trustees about their servicing and performance, mostly because beneficiaries were “in the dark” about the worlds of finance and investing. Now, however, with the vast amount of information available to the public regarding such topics, beneficiaries are armed with more knowledge and firepower than ever, when confronting their current trustee.
Previously, trust lawyers received a “removal of trustee” issue just once or twice a year; now, this situation occurs multiple times a month. The two biggest complaints made by beneficiaries center upon the trustee’s investment performance, and the lack of service, responsiveness and accountability from their bank’s trust department.
Newer trusts, that were created within the last 10 to 20 years, typically contain a stipulation allowing for a change of trustee. A designated “trust protector,” typically an accountant, a lawyer or a relative, is assigned the power to order a change of investment manager, or even a change of trustee.
Many experts, however, urge beneficiaries to try to settle their grievances privately with their current trustee, before taking the drastic measures necessary to actually remove a trustee.
As a primary step, beneficiaries should meet with the head of the bank’s trust department, in an attempt to resolve the situation. The only problem with this strategy is the fact that, by this point, beneficiaries have usually determined that they just want to remove their trustee.
However, changing a trustee is often very difficult. Most corporate trustees will not simply agree to step aside, when asked to leave. A mere disagreement between the beneficiary and the trustee is not enough to persuade a court to order a change of trustee.
Beneficiaries will have to present a great deal of credible evidence, and expert witnesses, to obtain a transfer of a trust’s corporate or personal trustee. Courts generally respect the wishes of the settlor, who created the trust. If a specific trustee has been designated, with no provision for removal or succession, courts have to be convinced with strong evidence.
It must be proven that the trust department acted in a grossly self-interested or irresponsible manner. Examples would be a log showing a long-running series of unreturned phone calls, proof of prolonged poor investment returns, or the placement of trust assets into investments in which the trustee has a personal interest.
When it comes to servicing, a trustee should call beneficiaries regularly, provide statements to the trust’s beneficiaries at least every three months, and arrange a meeting to go over performance and allocations at least twice a year.
Below is a letter from one of our clients, who recently won a case against her, now former, corporate trustee. She provides advice to individuals wishing to accomplish the same results.
Our client, and David J. Yvars, CEO of The David J. Yvars Group, Inc., an investment advisory firm specializing in the removal and replacement of trustees, have aligned to advise beneficiaries on issues pertaining to changing trustees. We provide customized and flexible portfolio management solutions, that are better aligned with the investment objectives and needs of the trust’s beneficiaries.
Our client states:
To be honest, the article stated above doesn’t tell even half of the sordid story about corporate trustee mismanagement of trust assets. Has your bank or trust company been treating your trust poorly (to put it mildly)? Are you merely somewhat upset at the poor performance of your corporate trustee (CT), or would you describe the attitude and management style of your CT concerning your trust as downright “predatory?”
My (former) CT was a financial institution that was definitely in the “predatory” category. It repeatedly, deliberately raided and raped its many trust accounts (including my family’s trust) whenever it pleased, for its own financial benefit. Please note the encouraging word, “former.” I actually forcibly removed one of the largest, most arrogant, viciously self-serving and corrupt banking institutions from the position of trustee over my family’s trust, and convinced a court to appoint a new trustee.
To deal with the formidable confrontational force of the corporate trustee of my family’s trust, I definitely had to “call myself forward.” I had to initiate and engage repeatedly in very unpleasant and antagonistic conversations with the staff of my CT, just to understand and document how this CT was using our family trust for its own financial gain. Occasionally, they simply hung up on me.
You may have to endure the same unpleasant and aggravating situation. In order to start the process of changing your trustee, you need to be willing to embark upon that same series of interactions. Focus on your goal- you want to free your trust from the clutches of the self-serving, predatory bank or trust company that is currently holding your trust hostage, for its own benefit.
Think, for a moment, about your own situation. Someone in your family created your trust as their legacy to you, for your financial benefit and security, and possibly also for the benefit of the future generations of you and your family. They intended your family’s trust to benefit YOU- NOT the CT that is presently using your trust account to enrich itself, to the detriment and expense of you and your offspring.
If you just keep your head down, and continue the silent approval that you have given your CT in the past, then you will never remove your trustee, or save your trust from the continuing abuse wrought by your current trustee. So, think of your present situation as an opportunity. A concerted and determined effort on your part, to end the travesty of your CT’s trust abuses, will actually honor the intent and hard work of the people who created your trust as their legacy to you and your family.
In my case, the good news is that our family’s corporate trustee is gone- done, finished, removed out of our lives for good, unable (by court order!) ever to abuse, damage or profit excessively from our trust again. It absolutely took hard work and time on my part to get rid of this CT, but the results that I obtained were definitely worth the effort that was necessary. I would endure it all again, in a heartbeat!
The results for you also will definitely be worth the effort. Moreover, you have one huge advantage over me- I never had the help of a mentor who has already been through this experience, made the mistakes, gradually learned the right questions to ask, and discovered the proper way to create a record for a judge (and/or federal or state agencies) to review, if necessary.
So there is hope for you- it can be done. It required a dedicated investment of my time and energy, making numerous phone calls and writing many letters- and yes, ultimately filing a lawsuit- to remove my trustee, make this transformation happen, and free our trust from its CT abuses.
Accomplishing a change of trustee is not an easy, fast or simple process. But I did it! The David J. Yvars Group will be there every step of the way, to help you through the process. We are available, and can help you shave years off of this grueling process, to successfully remove your trustee!
To inquire about having us assist in the removal or replacement of a Trustee it will be necessary to provide us with details of your matter. In this regard please complete and send us our Contact Form For Removal or Replacement of Trustee.