Can I remove or replace the trustee if they refuse reasonable distributions? – North Carolina

Short Answer

Yes. In North Carolina, a beneficiary can ask the court to remove a trustee and appoint a replacement when the trustee’s conduct (including refusing appropriate distributions) seriously harms the trust administration or the beneficiaries’ interests. The most common path is a trust proceeding filed with the Clerk of Superior Court, but some related claims may need to be heard in Superior Court. Whether refusal to distribute justifies removal often depends on the trust’s distribution language and whether the trustee acted in good faith and within the discretion the trust gives.

Understanding the Problem

In North Carolina trust administration, a common question is whether a trust beneficiary can remove or replace a trustee when the trustee refuses distributions that appear reasonable for the beneficiary’s health, support, or other stated purposes. The decision point is whether the trustee’s refusal reflects a good-faith exercise of discretion under the trust terms, or instead reflects a serious problem in how the trustee is administering the trust that justifies court intervention. Timing can matter when the beneficiary needs funds urgently for care and living expenses and the trustee will not act.

Apply the Law

North Carolina follows a modern trust code that lets a court remove a trustee for specified reasons, including serious breach of trust and situations where the trustee is unfit, unwilling, or persistently fails to administer the trust effectively. In many trust matters, the Clerk of Superior Court is the initial forum to hear trust proceedings such as removal of a trustee. Even when a trust gives the trustee “discretion” over distributions, that discretion is not unlimited; a trustee must still act in good faith, follow the trust’s purposes, and act in the beneficiaries’ interests as defined by the trust.

Key Requirements

Standing (right person bringing the case): A trust beneficiary (often a “qualified beneficiary”) generally has the ability to bring a trust proceeding seeking removal or replacement of a trustee.
Grounds for removal: The request must fit recognized grounds, such as a serious breach of trust, unwillingness or persistent failure to administer the trust effectively, or other circumstances where removal better serves the beneficiaries and aligns with the trust’s material purposes.
Best interests and trust purpose: The court focuses on whether removal would improve administration and protect beneficiaries while staying consistent with what the trust was designed to accomplish.

What the Statutes Say

N.C. Gen. Stat. § 23-22 (Court may remove trustee and appoint successor) – Authorizes the court to remove a trustee and fill a vacancy by appointing a successor.
N.C. Gen. Stat. § 1-56.1 (No limitation for certain trust actions) – States that actions to reform, terminate, or modify certain trusts may be commenced at any time (useful when evaluating timing in trust-court relief).

Note: North Carolina’s Uniform Trust Code provisions on trustee removal, trustee duties (including informing beneficiaries), and court remedies are central to these cases. Statute citations can be technical and depend on the specific claim and forum, so a lawyer typically confirms the exact sections that match the trust’s terms and the relief requested.

Analysis

Apply the Rule to the Facts: The facts describe a trustee holding significant trust proceeds after selling a home, while a disabled beneficiary with a terminal illness requests distributions for assisted living, hospice care, caregiving, and transportation. If the trust is intended to support the beneficiary’s health and living needs, a flat refusal to make needed distributions (or to even consider reasonable requests) may point to unwillingness to administer the trust effectively or a serious breach of fiduciary duties. If the trust grants broad discretion, the key issue becomes whether the trustee used that discretion in good faith and consistent with the trust’s purposes, rather than using discretion as a reason to say “no” without a reasoned process.

Process & Timing

Who files: A beneficiary (often through an attorney). Where: Commonly a trust proceeding before the Clerk of Superior Court in the county tied to the trust’s administration (county practices vary). What: A petition or complaint requesting removal of the trustee and appointment of a successor trustee, and often related requests such as an order directing information-sharing and a current trust accounting. When: There is no single universal deadline for a removal petition, but urgent health-and-support needs are a reason to file promptly and request an expedited hearing when appropriate.
Notice and hearing: The trustee and other required parties receive formal notice. The clerk (or judge, depending on the claim) schedules a hearing and considers evidence about the trust terms, the beneficiary’s needs, the trustee’s reasons for refusing distributions, and whether the trustee followed a reasonable decision-making process.
Order and transition: If the court removes the trustee, it can appoint a successor and require transfer of trust records and assets so administration can continue without interruption.

Exceptions & Pitfalls

Discretionary distribution language: Some trusts give the trustee broad discretion. In those cases, the court may not remove a trustee simply because the trustee made a reasoned decision not to distribute. The strongest cases usually show bad faith, self-interest, hostility that blocks fair administration, refusal to communicate, or a pattern of ineffective administration.
Removal is not automatic for every breach: North Carolina courts generally look for a serious issue. A single mistake might not be enough by itself, but a pattern of refusals, poor communication, and disregard of trust purposes can add up.
Forum limits: Some trust matters can start with the Clerk of Superior Court, but certain requests (such as money damages for breach of fiduciary duty) may require filing in Superior Court or coordinating cases to avoid delay and incomplete relief.
Proof problems: Removal cases often turn on documents. Missing trust language, missing account statements, or vague distribution requests can make it harder to show that refusals were unreasonable or inconsistent with the trust’s purpose.

Conclusion

In North Carolina, a beneficiary can seek to remove and replace a trustee when the trustee’s refusal to make appropriate distributions reflects a serious problem in trust administration, such as bad faith, unwillingness to act, or persistent failure to administer the trust effectively in line with the trust’s purposes. The usual next step is to file a trust removal petition with the Clerk of Superior Court in the county where the trust is administered as soon as the refusal creates an urgent support or care problem.

Talk to a Probate Attorney

If a trustee is refusing reasonable distributions needed for care or basic support, our firm has experienced attorneys who can help explain options and timelines under North Carolina trust law. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.