What are my options to remove or replace a co-trustee and appoint a neutral successor trustee if none is named? – North Carolina

Short Answer

Under North Carolina law, a co-trustee or beneficiary can ask the clerk of superior court to remove a trustee for specific statutory reasons and to appoint a replacement. If the current trustees will resign or a vacancy otherwise exists, the qualified beneficiaries may unanimously agree on a successor trustee if the trust does not provide a method. If they cannot agree, the clerk of superior court can appoint a neutral successor trustee to administer the trust.

Understanding the Problem

The question is whether, under North Carolina probate and trust law, a co-trustee can be removed or replaced and a neutral successor trustee appointed when the trust either does not name a successor or the named person will not serve. The issue often arises when co-trustees are also family members and cannot agree how to manage trust assets such as rental homes and farm property after a death. The decision point is what formal options exist to change trusteeship and how a neutral third party can be put in charge when the trust instrument is silent on successors.

Apply the Law

North Carolina’s trust code sets out when a trustee can be removed, when a vacancy exists in the trusteeship, and how a successor trustee is chosen if the trust does not specify the process. These rules generally apply in proceedings before the clerk of superior court in the county with primary trust contacts, and they include both voluntary changes (like resignation) and contested changes (like removal for cause).

Key Requirements

Grounds to remove a trustee: The settlor, a co-trustee, or a beneficiary must show one of the statutory grounds for removal, such as a serious breach of trust, lack of cooperation between co-trustees that impairs administration, persistent failure or unfitness to administer the trust, or a substantial change in circumstances.
Creation of a vacancy in the trusteeship: A vacancy occurs when a trustee resigns, is removed, dies, is disqualified, or when a designated trustee cannot or will not serve, and the terms of the trust require the vacancy to be filled or there is no remaining trustee.
Method to appoint a successor trustee: If the trust does not name a successor or a method to choose one, qualified beneficiaries may unanimously agree on a successor; if they do not agree, the clerk of superior court can appoint an appropriate successor, including a neutral third party.

What the Statutes Say

N.C. Gen. Stat. Chapter 36C (North Carolina Uniform Trust Code) – governs trustee removal, vacancies, and appointment of successor trustees, including by beneficiary agreement or court order.
N.C. Gen. Stat. § 23-22 (Court may remove trustee and appoint successor) – confirms the court’s power to remove a trustee and fill the vacancy.

Analysis

Apply the Rule to the Facts: Here, the co-trustees are siblings administering a trust that holds rental homes and farm properties, and the document may not name a clear successor trustee. If conflict between co-trustees materially impairs trust administration, that lack of cooperation can support a removal request. If one or both current co-trustees resign or are removed, a vacancy exists, and the qualified beneficiaries can either unanimously select a neutral successor or, if they cannot agree, ask the clerk of superior court to appoint a neutral trustee to take over.

Process & Timing

Who files: Typically a co-trustee, settlor (if living), or qualified beneficiary. Where: Clerk of Superior Court in the North Carolina county with primary administration of the trust or where the trust is registered, if applicable. What: A verified petition for removal of trustee and/or appointment of successor trustee, along with any required estates or special proceeding cover sheet. When: As soon as lack of cooperation, breach of duty, or vacancy makes it impractical or risky to continue current administration.
After filing, the clerk issues notice to interested parties and holds a hearing. Timing can vary by county, but parties should expect several weeks to a few months before a full hearing, depending on the court’s calendar and any need for discovery or interim relief.
Following the hearing, the clerk may order removal of the trustee, accept any resignation, and appoint a successor trustee, often specifying that the successor is a neutral third party. The outgoing trustee must then transfer trust property and records to the successor so the new trustee can begin managing assets under the trust terms.

Exceptions & Pitfalls

The trust instrument may contain its own removal and replacement procedures; those terms usually control unless they conflict with mandatory duties such as acting in good faith and in the beneficiaries’ interests.
Normal family disagreements are not always enough for removal; the lack of cooperation must substantially impair trust administration, or other statutory grounds must be shown.
Failing to notify all qualified beneficiaries and interested parties can delay or invalidate the proceeding, so proper notice and joinder are critical.
If beneficiaries cannot unanimously agree on a successor where unanimity is required, the matter must go to the clerk, and partial private agreements will not resolve the vacancy.
Outgoing trustees must properly transfer title to real property and other assets; incomplete transfers can create later title problems for rental or farm properties.

Conclusion

In North Carolina, a co-trustee or beneficiary can seek to remove a co-trustee for specific statutory grounds and create or recognize a vacancy in the trusteeship. When no successor trustee is named and a vacancy exists, qualified beneficiaries may unanimously appoint a successor, or, if they cannot agree, the clerk of superior court can appoint a neutral trustee. The key practical step is to file a petition with the clerk asking for removal and appointment of a neutral successor trustee as soon as administration is materially impaired.

Talk to a Probate Attorney

If a North Carolina trust is stuck because co-trustees cannot work together or no clear successor trustee is named, our firm has experienced attorneys who can help explain the options for removal and neutral appointment in the clerk’s court. 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.