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Trustee Removal In British Columbia

Trustee Removal in British Columbia

Often a will write will create trust accounts as part of their estate plan. When will-writers do so, they have the freedom to specify how, when, and to whom the assets of the trust are distributed. Trustees play an important role in the management of trust accounts, and are responsible for holding the account for the benefit of the beneficiary. Depending on the nature of the trust account, a trustee can have many different responsibilities. Sometimes, a trustee is given very simple instructions to follow once the will-writer passes. In other circumstances, a trustee is given very detailed instructions, which may mean the role is a significant responsibility. In this article, we will cover the trustee removal process in BC which would apply to a trustee who is either unfit to fulfill their responsibilities, or who simply does not want to carry on in the position.

Reasons for Trustee Removal

First, let’s consider some reasons a trustee might be removed from their position. In British Columbia, beneficiaries of a trust can make a claim to the courts to have for trustee removal. While this can happen for a wide variety of reasons, including family issues or suspected fraud, most often the beneficiary simply does not think the trustee is doing a good enough job managing the trust. In some situations, the trustee does not have the relevant experience to manage the trust in the best interests of the beneficiaries. For example, a trustee with instructions to invest the trust funds to generate profit over time should likely have experience in investing, or the sense to hire an advisor. To invest the funds knowing they are not capable of acting in the beneficiaries’ best interests could demonstrate they are incapable of managing the trust.

Potential trustees should always clearly understand what their responsibilities will be before accepting the role.

It is not uncommon for a trustee to simply not fully understand their obligations. Often, will-writers appoint a close friend or loved one as their trustee because they trust them, without considering the obligations of the trustee. It is not uncommon for individuals to accept the role of trustee without understanding the amount of work involved in managing the trust. This could be because they feel a moral duty to the person appointing them, or because they feel honoured to have been chosen. In any case, it is essential for a trustee to understand exactly what is expected of them before they accept the role to avoid mismanagement of a trust. A trustee failing to act on their duties, even due to simple misunderstanding, is detrimental to the trust and its beneficiaries.

If You’re a Trustee

A trustee in British Columbia can renounce their position at any time, though in some circumstances they will be required to find a replacement trustee before being relieved from their duties. There are many reasons why a trustee might choose to give up their role, including those listed above. It is not uncommon for trustees to have disputes with the beneficiaries of the trust, or face a major change in their personal life which makes them incapable of maintaining the trust. Under the Trustee Act 1996, a trustee can voluntarily retire as long as there will be at least two trustees remaining after they leave their role, and those trustees consent to them leaving. Trustees should note that this option is only available in situations where the trust document has not expressed a different intention for the retirement of trustees.

Beneficiaries of a Trust may Seek Trustee Removal

First, beneficiaries seeking to remove a trustee should read the trust document and see if it includes a trustee removal provision. These are common provisions which set out when and how trustees can be removed and replaced, and can provide very useful guidance for all parties involved. If there is no such provision, the courts will be able to remove a trustee on application of the beneficiaries. Under section 30 of the Trustee Act, a beneficiary of a trust, or the majority where there are multiple beneficiaries, can apply to have a trustee removed and replaced at any time.

Case law in British Columbia has established that, generally, a Section 30 application will be successful if it is established that the trustee has:

  • Been dishonest;
  • Demonstrated incapacity;
  • Administered the trust in bad-faith;

Or

  • Endangered trust assets.

The aim of the courts is always to protect the best interests of the beneficiaries and the trust assets, and will usually remove a trustee if beneficiaries can demonstrate that there is a good reason.

Are you a beneficiary hoping to remove a trustee? Are you a trustee hoping to retire from your position? Whatever your problem, contact an experienced estate lawyer today to find the best solution for your situation.  

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email a

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