Procedural Overview in the Withdrawal of Executors and Trustees

January 3, 2024

Explore Critical Scenarios Requiring the Removal of an Executor or Trustee in Lavallette, Belmar, Asbury Park, Hazlet, and throughout Southern New Jersey

Procedural Overview in the Withdrawal of Executors and Trustees in New JerseyChoosing an executor or trustee for your estate or trust may be a simple decision for some individuals, while others may agonize over their selection. What happens if an executor or trustee is later found to not be trustworthy, reliable, or capable of carrying out their duties? By the very nature of estate planning, it is common that the beneficiaries of an estate or trust may also find themselves asking these questions and wondering what, if anything, can be done to remove an executor or trustee from their position.

First, testators and grantors—those engaging in estate planning by executing a will or forming a trust—must understand the role of various positions they are responsible for appointing, including the powers and responsibilities they are vesting in the individual who they are appointing as executor or trustee. Through this knowledge, a testator or grantor can better understand under what circumstances it may be necessary to remove an executor or trustee.

Obligations of a New Jersey Estate Executor

An executor of a will is the individual who is designated to oversee the division of a decedent’s estate and implement their wishes, as expressed in the decedent’s last will and testament. The executor is the legal representative of the decedent’s estate. They are designated to take actions like paying taxes and debts of the estate from estate funds, including legal and administrative fees, before distributing all other assets of the estate to beneficiaries. Executors are also charged with closing out accounts and other various administrative tasks necessary to execute the will and settle the estate of the decedent.

Sometimes, the job of an executor is simple, involving the execution of very black and white instructions to which there is little to no room for the executor’s personal judgment or discretion. However, there are many circumstances in which the executor has a large degree of discretion in the exact way that assets can be distributed among the beneficiaries. When that is the case and whenever complex interpersonal or financial decisions must be made, the executor’s role as a fiduciary to both the estate and all of its beneficiaries will be put to the test.

Trustee Dynamics Based on Revocable and Irrevocable Trust Structures

Before we discuss the role of a trustee, it is important to note that the individual who serves as a trustee often varies depending on whether it is a revocable trust (also known as a living trust) or an irrevocable trust. A revocable trust is a trust that is more flexible but offers less protection. The assets that fund a revocable trust can be easily changed, as well as the beneficiaries. However, in exchange for this flexibility, a revocable trust is not afforded the same tax and creditor protection as an irrevocable trust. Often, though not always, a revocable trust is overseen by the grantor or creator of the trust as trustee. So, the individual who originally owns the assets that are put into the trust will operate in the trustee role of the revocable trust while they are alive. If the grantor will serve as trustee, they must appoint a successor trustee to assume the role should circumstances leave them incapacitated or deceased.

On the other hand, when an individual forms an irrevocable trust, they give overall control of the assets contributed to the trust to someone else. In an irrevocable trust, the grantor cannot be the trustee and cannot maintain control over the trust assets. The trustee must be another individual who is appointed by the grantor at the time that the trust is formed. This individual will be responsible for the administration of the trust according to the trust’s terms and for the benefit of the beneficiaries.

Circumstances Leading to the Removal of Executors or Trustees in NJ Estate Administration

Removing an executor or trustee from their position is a measure that is sometimes warranted. An executor or trustee may simply become unable or incapable of fulfilling the fiduciary duties of the role through no fault of their own. If they become physically or mentally incapable of fulfilling their responsibilities, then it may be necessary to remove them from the position and appoint a new executor or trustee.

There are also many circumstances under which an executor or trustee must be removed due to a conflict of interest that arises or is discovered, rendering them unable to serve the best interests of the estate and beneficiaries without a conflict with their own interests. An executor or trustee may need to be removed if they breach their fiduciary duty to the estate or its beneficiaries. This can occur if the executor or trustee engages in self-dealing, fraud, embezzlement, or simply even mismanages the estate or trust assets. Failing to adhere to the instructions set forth in a decedent’s will or abide by the terms of the trust is a breach of the executor or trustee’s fiduciary duty to the estate.

Finally, if there are document hostilities between the executor or trustee and beneficiaries that materially interfere with the administration of the estate, then it may be necessary to remove and replace the executor or trustee.

Legal Procedures in New Jersey for Removal and Replacement of an Executor

Navigate with Our Estate Planning Attorneys the Process of Executor Removal in Ocean County, NJRemoval of an executor or change of a successor trustee during the lifetime of the testator or grantor of a revocable trust may be done by the testator or grantor at any time. However, in the case of an irrevocable trust or the need to remove an executor of an estate after a testator has died or become incapacitated, removal is more complicated and must be done with a court order. In New Jersey, the removal of an executor is governed by Section 3B: 14-12.

It is important to note that the court will not remove an executor for any failure or violation of duty. The court will require sufficient evidence and documentation that an executor has engaged in fraud, carelessness, or “indifference” in their duties and responsibilities as an executor. In some cases, the court may require the parties to participate in mediation. If the court determines that there are compelling grounds for removal, it will remove the executor or trustee and appoint a third party to serve the role.

Grounds and Possible Ramifications for Executors and Trustees Following Their Removal

Some grounds for removal, like a conflict of interest, incapacity of an executor, or hostilities between an executor or trustee and beneficiaries that materially interfere with the administration of the trust or estate, will not result in any further consequences for the executor or trustee beyond their removal from the position. However, other actions giving rise to grounds for removal may also be criminal in nature, like embezzlement of trust assets or establishing civil liability for the executor or trustee.

Get Help Removing an Executor or Trustee from our Toms River Estate Planning Lawyers Today

If you are the beneficiary of an estate or trust and believe that there are sufficient grounds for removal of the executor or trustee, enlisting the expert assistance of an experienced estate planning attorney is crucial. New Jersey courts will not flippantly remove an executor or trustee from their position. An estate attorney at Chamlin, Uliano & Walsh will help you determine if there are sufficient grounds for removal and, if so, collect the evidence required to persuade the court through depositions, financial documents, tax documents, and more. We

To discuss your situation and learn more about navigating it, please contact us today to schedule a consultation. Our estate planning,wills, trusts, and estate litigation lawyers handle cases wherein the executor of an estate needs to be removed in towns across the Jersey Shore, including Wall, Rumson, Howell, Freehold, Toms River, Red Bank, and Middletown. We encourage you to contact us online or call us at 732-440-3950 for the help you need now.

Categorised in: Estate Planning