PETITIONER IS ENTITLED TO REMOVE AND REPLACE CORPORATE TRUSTEE OF TRUST
Petitioner was entitled to remove respondent as the corporate trustee of her special needs trust and replace it with a successor trustee where the express terms of the trust agreement gave her authority to remove a corporate trustee for any reason with court approval. The court granted petitioner’s petition.
Petitioner, Patricia Sankey, filed a petition seeking to remove Life Enrichment Trust, Inc. as the corporate trustee of her special needs trust and replace it with Achieva Family Trust as successor trustee. According to the agreement, Sankey “may remove from office any corporate trustee of the trust for any reason whatsoever, and may replace such trustee with another corporate trustee” not related or subordinate to her. Under long-settled Pennsylvania law, the polestar for interpreting any trust agreement is the settlor’s intent, the court explained. This principle is recognized in the Pennsylvania Uniform Trust Act, which provides that the terms of a trust instrument control “over any contrary provisions of this chapter” except for the mandatory rules in 20 Pa.C.S. §7705(b). Live Enrichment argued in response to the petition that its potential removal as trustee should be controlled by 20 Pa.C.S. §7766, which requires court approval and a showing of cause for the removal of a trustee such as a serious breach of trust, a lack of cooperation, ineffectiveness or a substantial change in circumstances. The court noted, however, that §7766 was not listed among the mandatory rules that would override the express provisions of a trust document under 20 Pa.C.S. §7705. The express terms of the special needs trust agreement gave Sankey authority to remove a corporate trustee for any reason with court approval, the opinion emphasized. Thus, Sankey had authority to remove Life Enrichment with court approval. Life Enrichment cited the state high court’s 2017 decision in Trust Under Agreement of Taylor to support its claim that for noncharitable, irrevocable trust such as that at issue, the UTA does not permit the removal and replacement of a trustee without orphans’ court approval in accordance with UTA §7766, which requires an allegation of adequate grounds for removal. However, this argument ignored the key factual differences between the trust analyzed by the Taylor court, which involved an agreement of trust that did not expressly provide the beneficiaries with power to remove the corporate trustee. Because the Taylor trust lacked a broad removal provision, the beneficiaries sought permission to modify the trust. There was no such request at issue in this case, the court said in its opinion granting Sankey relief.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 41 PLW 957, (Tuesday, October 9, 2018), In re: Sankey Special Needs Trust, PICS Case No. 18-1156 (C.P. Philadelphia Aug. 29, 2018)
Kindly visit our Estate Litigation or Trusts & Estate Planning websites or contact one of our Estate Attorneys, Philadelphia or Wills, Trusts and Estate Litigation Attorneys, Philadelphia at 215-977-8200 for more information on this topic.