A recent Pennsylvania Supreme Court case clarified the ability of the beneficiaries of a trust to remove a corporate trustee.
In a highly anticipated case, the Court unanimously refused to permit the beneficiaries of an irrevocable trust to remove a trustee through the general provisions of the Pennsylvania Uniform Trust Act (UTA).
In the recent case, Trust Agreement of Edward Winslow Taylor, the Court held that the specific provisions of the UTA dealing with a removal of a trustee must be followed. The beneficiaries had tried to remove a corporate trustee in the case.
The beneficiaries unsuccessfully attempted to amend an irrevocable trust using the general modification provisions of the UTA. They used a two-step process to remove Wells Fargo as a corporate trustee. Although the Pennsylvania Superior Court agreed with the analysis proposed by the beneficiaries, the state’s highest Court, based upon principles of statutory construction, favored the specific provisions of the UTA which has strict requirements for the removal or replacement of a trustee.
This opinion has broad application for older trusts which do not contain a “portability” provision. Modern trusts typically contain a portability provision, which permit the beneficiaries of an irrevocable trust to replace a corporate trustee. Existing trusts should be reviewed to determine whether they contain a portability provision.
If you have any questions on this or need help in reviewing a trust, please contact me or any other attorney in Barley Snyder’s Personal Planning Practice Group.