Ellicott City, MD asked in Estate Planning and Probate for Maryland

Q: Can’t someone just write a resignation letter to resign as trustee of revocable trust? Maybe notarize?

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2 Lawyer Answers
Nina Whitehurst
Nina Whitehurst pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Estate Planning Lawyer
  • Crossville, TN

A: Yes, and it doesn’t HAVE to be notarized but notarization helps prove it’s really you. Be sure to read the trust to identify all the people that need to receive the resignation letter.

Mark Oakley
Mark Oakley
  • Estate Planning Lawyer
  • Rockville, MD
  • Licensed in Maryland

A: Most revocable trusts name the creator of the trust, known as the grantor, as trustee. Once the grantor has died, the trust typically becomes irrevocable. The trust should provide for successor trustees. It is unclear what the nature of the trust is, if there are beneficiaries who are minors or incompetent adults, and whether there is another co-trustee already acting in that capacity, or even if there are assets remaining that need management.

In a case where you are the sole trustee and there is no successor trustee named or willing to act, and there are minor or incompetent beneficiaries, then more may be required of you than simply resigning, as you have a fiduciary duty to those minor or incompetent beneficiaries to not act in a manner that hurts their financial interests.

Generally, however, a trustee can resign by giving written notice to the beneficiaries or to the beneficiaries’ legal guardian and to any co-trustee and successor trustee. You must account for the trust assets and assist in the smooth transfer of control over the assets in a manner that safeguards the interests of the beneficiaries until the new trustee takes over.

The trust document ordinarily provides for successor trustees and their appointment. If not, the Maryland statute allows the beneficiaries to name the successor trustee, or for the court to appoint one.

In the case of minors or incompetent adult beneficiaries where a legal guardian is not identified or otherwise not a proper person to act as trustee, and the trust instrument lacks clear direction, you may have to petition a court to appoint a successor trustee before resigning so that the trust assets can be transferred to a new trustee.

Where adult competent beneficiaries or their legal guardians are involved but cannot agree on a new trustee, and any named successor trustee under the trust is not available to act, then petitioning a court by way of interpleader may be necessary whereby you join all beneficiaries and turn over all assets and accounts to the registry of the court and let the beneficiaries and the court sort out who is to become trustee. You would be released from your position by court order while the beneficiaries litigate their differences at their own expense and time.

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