Section 704 of the Uniform Trust Code provides for the appointment of a successor trustee when there is a vacancy in the trusteeship. If one or more co-trustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the Trust has no remaining trustees.

A vacancy in a trusteeship must be filled in the following order of priority: (1) by a person designated in the terms of the Trust to act as successor trustee; (2) by a person appointed by unanimous agreement of the qualified beneficiaries; or (3) by a person appointed by the Court. A non-qualified beneficiary can petition the Court for the removal of a trustee appointed by the qualified beneficiaries.

The Code gives no procedures regarding how a successor trustee is appointed. With good drafting, the terms of the Trust will deal expressly with the problem of vacancies by naming successors and specifying the procedure for filling the vacancies. Absent such provisions in the Trust, Section 704 (c)(2) permits the appointment of a successor trustee without the need for Court approval.

Should the qualified beneficiaries fail to make an appointment, the Court will fill the vacancy. In doing so, the Court should consider the objectives of the settlor, the promotion of the proper administration of the Trust, and the interests and wishes of the beneficiaries. The Court may appoint an additional trustee or special fiduciary whenever the Court considers the appointment necessary for the administration of the Trust.

In the case of a Revocable Trust, the appointment of a successor trustee will normally be made directly by the settlor.

There are several forms that need to be submitted for the appointment of a successor trustee. One form would acknowledge the successor trustee’s acceptance of the appointment and the other would notify the IRS of the successor trustee (Form 56).

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