Can a trustee be removed or replaced?

Last modified: September 1, 2023
Estimated reading time: 1 min

Yes, a trustee can be removed or replaced under certain circumstances in Malaysia. The process for removing or replacing a trustee typically depends on the terms outlined in the trust instrument or applicable laws. Here are some common scenarios where a trustee may be removed or replaced:

1. Trustee’s resignation

A trustee can voluntarily resign from their position by providing written notice to the beneficiaries or the relevant court. The trust instrument may specify the procedure for resignation and the appointment of a successor trustee.

2. Trustee’s incapacity or death

If a trustee becomes incapacitated or passes away, their role as trustee is automatically terminated. The trust instrument or applicable laws may outline the process for appointing a successor trustee in such situations.

3. Court intervention

In certain circumstances, the court may intervene and remove a trustee if there is evidence of misconduct, breach of fiduciary duty, or inability to fulfill the trustee’s obligations. This typically requires a formal application to the court, supported by evidence of wrongdoing or significant harm to the trust or beneficiaries.

4. Trustee’s failure to perform duties

If a trustee consistently fails to fulfill their duties, neglects the trust administration, or acts in a manner contrary to the best interests of the beneficiaries, it may be possible to seek their removal. This would typically require legal action and demonstrating to the court that the trustee’s actions or inactions warrant their removal.

5. Trustee’s conflict of interest

If a trustee has a conflict of interest that hinders their ability to act impartially and in the best interests of the beneficiaries, it may be necessary to consider their removal or replacement. This can occur when the trustee’s personal interests are in direct conflict with their duties as a trustee.

The process for removing or replacing a trustee can be complex, and it is advisable to consult with a lawyer experienced in trust and estate matters in Malaysia. They can guide you through the legal requirements, help assess the grounds for removal, and assist in initiating the necessary legal proceedings, if required.

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