Removing a Trustee in Minnesota: Grounds and Process

What grounds does Minnesota law give for removing a trustee?

Minnesota gives a court four separate grounds to remove a trustee, and a petitioner needs to prove only one. Three turn on the trustee’s conduct or capacity. The fourth turns on changed circumstances or a unanimous request from the qualified beneficiaries, plus findings that removal helps all beneficiaries, that it “is not inconsistent with a material purpose of the trust,” and that a suitable replacement is available.

Under Minn. Stat. § 501C.0706, paragraph (b), “The court may remove a trustee if” any of these is shown:

1. Serious breach. “the trustee has committed a serious breach of trust.”
2. Cotrustee deadlock. “lack of cooperation among cotrustees substantially impairs the administration of the trust.”
3. Unfitness or poor administration. “the court determines that removal of the trustee best serves the interests of the beneficiaries because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively.”
4. Changed circumstances or a unanimous request. “there has been a substantial change in circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.”

The grounds stand alone. In In re Otto Bremer Trust, No. A22-0906 (Minn. Feb. 7, 2024), the Minnesota Supreme Court called them “separate and independent” and affirmed a removal on the serious-breach ground without deciding the unfitness ground. The statute says “may,” so proving a ground permits removal and does not require it. The fourth ground requires no fault by the trustee, and it is the only ground that requires a suitable cotrustee or successor to be available.

What counts as a serious breach of trust in Minnesota?

Under Minn. Stat. § 501C.1001, paragraph (a), “A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.” A serious breach can be one harmful or flagrant act, or a series of smaller breaches that together justify removal. Disagreement with the trustee is not enough unless it interferes with how the trust is run.

Chapter 501C does not define “serious,” so the Minnesota Supreme Court in Bremer took guidance from the Uniform Trust Code’s official comment: “[a] serious breach of trust may consist of a single act that causes significant harm or involves flagrant misconduct,” or of smaller breaches considered together. The court held that a serious breach “may involve a series of smaller breaches, none of which alone would justify removal, but which do justify removal when considered together.” The series in Bremer involved a trustee of a large charitable trust who used trust staff and resources for his own purposes, “used his position of power to intimidate a grantee on matters unrelated to any charitable purpose,” and “affirmatively lied about having a named successor.” The small dollar value of the personal use did not excuse it.

Two duties figured in the Bremer removal: loyalty and information. Minn. Stat. § 501C.0802, paragraph (a), provides: “A trustee shall not place the trustee’s own interests above those of the beneficiaries.” Under paragraph (c), a transaction in trust property with “the trustee’s descendants, siblings, parents, or their spouses” is presumed to be affected by a conflict, which matters when a sibling serves as trustee. The duty to inform, in Minn. Stat. § 501C.0813, is covered in the next sections.

Friction alone does not carry a petition. In the same case, the Court of Appeals quoted the Restatement (Second) of Trusts: “Mere friction between the trustee and the beneficiary is not a sufficient ground for removing the trustee unless such friction interferes with the proper administration of the trust.” In re Otto Bremer Trust, 984 N.W.2d 888 (Minn. App. 2023), aff’d (Minn. 2024). Courts also weigh who picked the trustee and whether a problem has been fixed. The Supreme Court in Bremer recognized that a court “will less readily remove a trustee named by the settlor than one appointed by a court,” though that rule did not help a trustee the settlor had not chosen. Matter of Will of Gershcow, 261 N.W.2d 335 (Minn. 1977) was decided under the statute that preceded chapter 501C. The court upheld a refusal to remove a trustee who had not filed annual accounts for years but had since filed them. It called the lapses “inconsequential deviations from legal requirements in the past.” Removal is also one remedy among several; a beneficiary may seek repayment or remedies for a trustee’s breach of fiduciary duty such as a constructive trust.

Who can ask a Minnesota court to remove a trustee?

The settlor, a cotrustee, or a beneficiary may petition, and the court may also act on its own. Minn. Stat. § 501C.0706, paragraph (a), provides: “The settlor, a cotrustee, or a beneficiary may petition the court to remove a trustee, or a trustee may be removed by the court on its own initiative.”

“Beneficiary” reaches further than the people receiving checks today. Under Minn. Stat. § 501C.0103, paragraph (c), it includes a person who “has a present or future beneficial interest in a trust, vested or contingent.” A child who inherits only after a parent’s death has a future interest and may petition; the petitioner in Gershcow was a remainder beneficiary. For the full set of rights that come with that status, see the rights of beneficiaries in a Minnesota trust.

The answer changes while the trust can still be revoked. Minn. Stat. § 501C.0604 provides: “While a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.” During a parent’s lifetime, a concern about the trustee of the parent’s living trust runs through the parent, who as settlor may petition. If the person mismanaging a parent’s assets is a personal representative in probate rather than a trustee, different rules apply; see misconduct by a personal representative.

A cotrustee has a duty, not only standing. Minn. Stat. § 501C.0703, paragraph (g), requires each trustee to exercise reasonable care to “prevent a cotrustee from committing a serious breach of trust” and to “compel a cotrustee to redress a serious breach of trust.” A cotrustee who sees the other trustee committing a serious breach of trust should act, because the statute makes that care part of the cotrustee’s own duties.

The trust instrument may add its own path. Under Minn. Stat. § 501C.0105, paragraph (a), “Except as otherwise provided in the terms of a trust, this chapter governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.” A trust may give someone a power to remove or replace a trustee without a court. The trust terms cannot displace the trustee’s duty “to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries” under paragraph (b)(2), or “the power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice” under paragraph (b)(11). I suggest reading the removal, successor, and any no-contest provisions before filing, because they can supply a faster route or a penalty.

How does a trustee removal petition work in a Minnesota district court?

A removal case starts with a petition in district court by the settlor, a cotrustee, or a beneficiary. The petition must say whether it invokes the court’s in rem or in personam jurisdiction, the court sets a hearing by order, and the petitioner gives notice to the current trustees and qualified beneficiaries. A written request for information should come first, because the trustee’s answer or silence becomes the record.

The steps, in order:

1. Ask for information in writing. Minn. Stat. § 501C.0813, paragraph (a), provides: “Unless unreasonable under the circumstances, a trustee shall promptly respond to a beneficiary’s request for information related to the administration of an irrevocable trust.” The trust instrument can shift some reporting to a designated person under paragraph (b). For what a trustee should be keeping and producing, see what a trustee must report and keep.
2. Pick the right court. Venue for a trust that is not created by a will lies in the county where a trustee with custody of trust assets resides or has a trust office, or where the trust’s principal place of administration is or will be with court approval. Under paragraph (a)(1), a trust created by will may also be heard in the county “where the will was probated,” and under paragraph (a)(3), a trust holding real property may be heard “in the district court for any county in which the real estate is situated.” If a Minnesota court has already handled the trust, Minn. Stat. § 501C.0207, paragraph (b), controls: “a petition under sections 501C.0201 to 501C.0206 must be filed in the court in which the prior proceedings were held, absent approval from the prior court.”
3. Designate the type of proceeding. Under Minn. Stat. § 501C.0201, “An interested person may petition the district court and invoke its jurisdiction as provided in sections 501C.0201 to 501C.0208 for those matters specified in section 501C.0202.” Paragraph (c) adds: “The petition shall specify whether the interested person is invoking the jurisdiction of the district court as an in rem proceeding or as an in personam proceeding.” With no designation, the proceeding is in rem. The choice has a lasting effect: in rem, “the district court shall retain jurisdiction as a proceeding in rem, until jurisdiction is transferred to another court or terminated by court order,” while in personam, “the trust is not subject to continuing jurisdiction unless otherwise ordered by the court.”
4. Give notice. Under Minn. Stat. § 501C.0203, subd. 1, for an in rem petition “the court shall, by order, fix a time and place for a hearing.” Notice is then published once in a legal newspaper for the county. It is also mailed to current trustees and qualified beneficiaries “whose identity is known and whose location is known or reasonably ascertainable to the petitioner after making reasonable efforts to locate such persons.” For an in personam petition, subd. 2 requires that notice “must be given by an interested person to the current trustees and the qualified beneficiaries in the same manner as set forth under Rule 4 of the Rules of Civil Procedure,” “unless waived in writing by the current trustees and the qualified beneficiaries.” Both subdivisions add: “In the case of a qualified beneficiary who is a minor or an incapacitated person as defined in section 524.5-102, notice of the judicial proceeding shall also be given to any representative person acting on behalf of the qualified beneficiary in accordance with the provisions of sections 501C.0301 to 501C.0305 who is known to the petitioner.” Each method carries a minimum notice period before the hearing; check the current text of the statute for those periods.

One timing rule matters before any of these steps. Minn. Stat. § 501C.1005 sets limitations periods for any judicial proceeding by a beneficiary against a trustee. Under paragraph (a), the clock can start when “the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim.” Under Minn. Stat. § 501C.0301, paragraph (e), “The settlor or another person, including one or more beneficiaries of the trust, designated by the terms of the trust instrument to receive information from the trustee concerning the administration of the trust and the material facts necessary to protect the beneficiaries’ interests in the manner described in section 501C.0813, paragraph (b), shall be a representative of the beneficiaries with respect to the limitations period on judicial proceedings against a trustee under section 501C.1005, paragraph (a).” Under section 501C.1005, paragraph (b), “A report adequately discloses the existence of a potential claim if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.” If paragraph (a) does not apply, paragraph (c) runs the period from the first of several events, which include “the removal, resignation, or death of the trustee” in paragraph (c)(1). The same period governs voiding a conflicted transaction: under Minn. Stat. § 501C.0802, paragraph (b)(3), the transaction is not voidable if “the beneficiary did not commence a judicial proceeding within the time allowed by section 501C.1005” under that paragraph. Check the current text of the statute for the periods themselves.

How can trust assets be protected while a removal petition is pending?

A Minnesota court does not have to wait for the final decision to protect the trust. Under Minn. Stat. § 501C.0706, paragraph (c), “Pending a final decision on a petition to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief under section 501C.1001, paragraph (b), as may be necessary to protect the trust property or the interests of the beneficiaries.”

The list in Minn. Stat. § 501C.1001, paragraph (b), begins: “To remedy a breach of trust that has occurred or may occur, the court may” order any of these, among others:

• compel the trustee to perform the trustee’s duties;
• enjoin the trustee from committing a breach of trust;
• order the trustee to account;
• “appoint a special fiduciary to take possession of the trust property and administer the trust”;
• suspend the trustee; or
• “subject to section 501C.1012, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds.”

Separately, Minn. Stat. § 501C.0704, paragraph (e), provides: “Whether or not a vacancy in a trusteeship exists or is required to be filled, 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 Bremer litigation, the district court granted part of the Attorney General’s request for interim equitable relief before trial, and the Court of Appeals affirmed that ruling. I suggest asking for interim relief with the petition when trust money is moving, because the statute lets the court act before the hearing on removal. For how Minnesota courts handle emergency orders in other business disputes, see temporary injunctions in Minnesota.

How is a successor trustee chosen after a removal?

If a cotrustee remains, the vacancy need not be filled. If no trustee remains, Minnesota sets the order for a noncharitable trust: the person the trust names, then a person all qualified beneficiaries agree on, then a person chosen in a nonjudicial settlement agreement, then the court’s appointee.

Minn. Stat. § 501C.0704, paragraph (b), provides: “If one or more cotrustees remain in office, a vacancy in trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.” Paragraph (c) sets the 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”;
3. “by a person appointed pursuant to a nonjudicial settlement agreement as defined in section 501C.0111”; or
4. “by a person appointed by the court.”

I suggest identifying a willing successor before filing, because the fourth removal ground requires the court to find “a suitable cotrustee or successor trustee is available,” and on any ground the court can compare the trustee with the replacement. In Gershcow, the trial court refused removal partly because “it would be more expensive to have the Bank serve as Trustee.”

The handover has its own rules in Minn. Stat. § 501C.0707. Until the property is delivered, unless a cotrustee remains or the court orders otherwise, “a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.” The former trustee “shall proceed expeditiously to deliver the trust property within the trustee’s possession to the cotrustee, successor trustee, or other person entitled to it.” And “Title to all trust property shall be owned by and vested in any successor trustee without any conveyance, transfer, or assignment by the prior trustee,” so the successor does not need the removed trustee to sign a deed.

Who pays the attorney fees in a Minnesota trustee removal case?

The court decides, and any award comes from the trust. Under Minn. Stat. § 501C.1004, “In a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney fees, to any party from the trust that is the subject of the judicial proceeding.”

The trustee’s own defense costs follow a different rule. Lund v. Lund, 924 N.W.2d 274 (Minn. App. 2019) was a dispute among siblings whose trusts held interests in family grocery businesses. The Court of Appeals held that “section 501C.1004 governs a beneficiary or third party’s ability to recover attorney fees from trust assets.” A trustee’s reimbursement instead falls under Minn. Stat. § 501C.0709, which covers “expenses that were properly incurred in the administration of the trust,” and the common-law standard that “focuses on whether the fees are reasonable and incurred in good faith.” The court reversed a fee denial that had applied the wrong section and remanded.

Two consequences follow for a beneficiary. A successful petition can still leave fees unpaid, because the award is discretionary. And when a trustee is found to have breached the trust, Minn. Stat. § 501C.1001, paragraph (b)(8), lets the court “reduce or deny compensation to the trustee,” which a petition can request alongside removal.

How should a trustee respond to a removal petition?

A trustee served with a removal petition can contest it, resign, or agree to a negotiated transition. Resigning does not end liability for past acts. Unless a cotrustee remains in office or the court otherwise orders, the trustee keeps protective duties until the trust property is delivered to a successor trustee or other person entitled to it. Which path fits depends on the strength of the claimed ground and on what a fight would cost the trust.

Resignation has two routes under Minn. Stat. § 501C.0705, paragraph (a): “upon notice to the qualified beneficiaries, the settlor, if living, and all cotrustees,” or “with the approval of the court.” Under paragraph (b), “In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.” Paragraph (c) closes the door on using resignation to end a dispute over past conduct: “Any liability of a resigning trustee or of any sureties on the trustee’s bond for acts or omissions of the trustee is not discharged or affected by the trustee’s resignation.”

A negotiated exit can resolve more. Minn. Stat. § 501C.0111, paragraph (b)(4), lets interested persons make a binding nonjudicial settlement agreement on “the resignation or appointment of a trustee and the determination of a trustee’s compensation,” and paragraph (b)(6) adds “liability of a trustee for an action relating to the trust.” The limit is in paragraph (c): “A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court under this chapter or other applicable law.” Under paragraph (d), “Any interested person may request that the court approve a nonjudicial settlement agreement.”

A trustee who contests should keep the defense costs defensible, because reimbursement from the trust turns on whether they were properly incurred and, under Lund, reasonable and incurred in good faith. When the petition also seeks money, the trustee’s answer may raise claims of its own; see counterclaims in trust disputes.

Next Steps in a Minnesota Trustee Dispute

A removal petition is strongest when it is built in order: a written request for information, a named statutory ground, a request for interim relief if assets are at risk, and a willing successor. A trustee facing one has three choices: contest it, resign, or negotiate a transition, and resignation leaves liability for past acts in place. Fees are the court’s call, and any award comes from the trust.

If you are a beneficiary, cotrustee, or trustee in a Minnesota trust dispute, email [email protected] with a brief description. I start with an intake and conflict check before you send confidential documents, and the trust instrument and any trustee reports should be shared only through a secure upload method after intake. I can then analyze the trust and the reports and tell you which removal ground, if any, the facts support and what interim protection to request. More on how I handle these cases is on my trust and estate litigation page.