Like most offices or positions, a trustee has the ability to resign if certain conditions are met. To follow the proper procedures, a trustee should first look to the terms of the trust instrument for guidance. Beyond the terms of the trust, the Missouri Trust Code two (2) separate ways in which a trustee may resign.
First, a trustee may resign upon at least 30 days’ notice to the qualified beneficiaries, the settlor/grantor (if living) and any and all cotrustees. Section 456.7-705. RSMo. Second, a trustee may resign with court approval. Id. With respect to this second option, the court is empowered to issue orders and impose conditions reasonably necessary for the protection of the trust property. In practice, this often turns out to be orders that the trustee provide an accounting or other orders requiring the trustee to ensure an efficient and expeditious transition of the trusteeship occurs without harm to the trust property/assets.
It is also important to note that a trustee’s resignation does not in any way discharge any liability that may have occurred during the trusteeship, such as claims for breach of trust or breach of fiduciary duty. Based on experience, many times a trustee’s resignation comes about because of allegations of wrongdoing or a breach of trust. It is not uncommon, in fact, for a trustee to resign in the midst of trustee removal litigation. This is often seen as a more desirable alternative, particularly in light of the costs and uncertainty of trial.
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