Dealing With A Potentially Incapacitated Trustee

Marin County Estate Planning Attorney

Many Baby Boomers are in the difficult position of taking care of their elderly parents. And millions of Baby Boomers are inching closer to their own golden years. It is no secret that America is aging rapidly. With the ever increasing aging population, many have responsibly created revocable living trusts to protect themselves from their potential incapacity and ultimate death. Many of these trust instruments nominate a successor trustee to step in the shoes of an incapacitated trustee.

Incapacity is an elusive term.  To begin with, every adult person is presumed to have capacity unless he or she has been determined by the court to be “incapacitated.”  A determination of incapacity must be supported by clear and convincing evidence. As a result, an incapacity determination for a fading or diminished trustee can be very difficult to prove.

Many elderly trustees can exhibit behavior indicative of diminished or fading capacity. This problem can be further compounded when the elderly trustee denies that he or she may have capacity issues and refuses to resign as trustee. Such a fading trustee of a large estate can cause a substantial amount of damage (i.e., loss of money or property).  Obviously, a fading trustee’s amicable resignation is by far the best approach.

On the other hand, if a trustee with fading capacity refuses to resign, then he or she may be removed according to the terms of the trust instrument.  A well drafted trust should grant one or more persons the power to remove a trustee, for specified reasons or on specified contingencies. By way of example, many standard trust provisions require two doctor declarations stating that the trustee is incompetent to handle his or her financial affairs.

A trustee may be removed by a court order pursuant to California Probate Code, section 17200. A trustee may be removed under Cal. Probate Code, section 15642, if it is determined that the trustee is substantially unable to manage the trust’s financial resources or is otherwise substantially unable to properly execute the duties of office, or the trustee is substantially unable to resist fraud or undue influence.

Marin County estate planning attorney Matthew W, Harris, Esq., LL.M assists individuals dealing with a diminished or fading capacity trustee.  Mr. Harris offers free trust administration consultations.

Call the Law Offices of Matthew W. Harris at his San Rafael office at (415) 521-5610.  Thank you for visiting.