How to Remove a Trustee in Kentucky: Grounds and Process
A trustee holds a position of significant responsibility — managing assets, making distributions, and acting in the best interests of the beneficiaries. When a trustee fails in these duties, Kentucky law provides a mechanism for removing them. But trustee removal is not automatic, and courts do not take it lightly. Understanding the grounds and process is essential for beneficiaries who believe their trustee is not performing.
Grounds for Removal
Under the Kentucky Trust Code (KRS Chapter 386B), specifically KRS 386B.7-060, a court may remove a trustee for several reasons. The trustee has committed a serious breach of trust. The trustee has been unresponsive or uncooperative with the beneficiaries. There has been a substantial change in circumstances that makes removal in the best interests of the beneficiaries. The trustee is unfit, unwilling, or unable to administer the trust effectively. There is persistent conflict between co-trustees that impairs trust administration. Or the trustee’s compensation is unreasonably high relative to the services provided.
The most common basis for removal is breach of fiduciary duty — the trustee has failed to act in the beneficiaries’ best interests, has engaged in self-dealing, has failed to invest prudently, has not provided required accountings, or has otherwise violated the duties imposed by the trust document and Kentucky law.
What Constitutes a Breach of Trust?
A trustee owes several duties to the beneficiaries. Duty of loyalty: The trustee must act solely in the interests of the beneficiaries and must not engage in self-dealing or transactions that benefit the trustee at the beneficiaries’ expense (KRS 386B.8-020). Duty of prudence: The trustee must administer the trust as a prudent person would, considering the purposes, terms, and circumstances of the trust (KRS 386B.8-040). Duty to inform: The trustee must keep the beneficiaries reasonably informed about the trust and its administration (KRS 386B.8-130). Duty to account: The trustee must provide accountings to the beneficiaries showing trust income, expenses, and distributions.
A single minor lapse may not justify removal, but a pattern of failures — or a single serious breach such as misappropriating trust funds — can be sufficient.
The Removal Process
A beneficiary (or co-trustee) seeking removal of a trustee must file a petition with the court having jurisdiction over the trust. The petition should identify the trust, the trustee to be removed, and the specific grounds for removal, supported by facts and evidence.
The trustee is entitled to notice and an opportunity to respond. The court will hold a hearing at which both sides can present evidence. The petitioner bears the burden of proving that removal is warranted. If the court grants the petition, it will remove the trustee and appoint a successor — either the successor named in the trust document, one agreed upon by the beneficiaries, or one selected by the court.
Interim Relief
In urgent situations — for example, if the trustee is actively dissipating trust assets — the court may grant interim relief pending a full hearing. This can include temporarily suspending the trustee’s powers, appointing a temporary trustee, or freezing trust accounts. To obtain interim relief, the petitioner must demonstrate that immediate harm to the trust is likely without court intervention.
Voluntary Resignation
Not all trustee departures require removal. Under KRS 386B.7-050, a trustee may resign by giving at least 30 days’ notice to the qualified beneficiaries and any co-trustees. Resignation is often preferable to contested removal — it avoids the expense and uncertainty of litigation and allows for a smoother transition. If a beneficiary’s concerns can be addressed through a voluntary resignation and replacement, that is usually the better path.
What Happens After Removal?
The removed trustee must provide a final accounting of their administration and deliver all trust assets to the successor trustee. The removed trustee may be liable for damages caused by any breach of trust that occurred during their tenure. If the trustee misappropriated funds, commingled trust assets with personal assets, or made imprudent investments that caused losses, the beneficiaries can pursue a surcharge action to recover those losses.
Protecting the Trust
If you are a beneficiary and you believe your trustee is not fulfilling their duties, do not wait for the situation to worsen. Document your concerns in writing, request accountings and information from the trustee, and consult with an attorney about your options.
Buckles Law Office handles trust disputes and fiduciary litigation in Central Kentucky. Call (859) 225-9540 to discuss your situation.
