Changed Circumstances Justify a Removal of a Trustee

Pennsylvania’s version of UTC § 706 allows the removal of a trustee whohas not committed a breach of trust if the removal is in the best interests ofthe beneficiaries, is not inconsistent with a material purpose of the trust,and there has been a substantial change of circumstances.

In In re McKinney, 67 A.3d 824 (Pa. Super.Ct. 2013), the court reversed the trial court’s refusal to remove and replace acorporate trustee finding that a string of mergers over several years resultingin the departure of personnel with whom the beneficiaries had worked for manyyears and the removal of the beneficiaries from Pennsylvania to another statesatisfied the statutory prerequisite for removal. On remand, the trial courtmust evaluate the suitability of the proposed successor corporate trustee andreconsider the award of attorney’s fees to the removed trustee.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.