The Duties Surrounding a Trustee’s Resignation – Where Does the “Buck” Stop?
November 2026
Publication| Trusts & Estates
Consider the following situation: Your client resigned as trustee of a trust by providing the appropriate notice required by the trust agreement. Months have elapsed since notice was delivered, and a successor trustee has yet to be appointed, leaving your client still in custody of the assets and awaiting further instruction. Your client informs you that they’ve received a capital call in connection with a trust asset and that a prompt determination is needed on how to proceed.
While such conversations aren’t an everyday occurrence for most advisors, when this question is raised, the potential consequences of a misstep can be material. The period between submitting a resignation and transferring the trust to a successor trustee is a transition with its own set of obligations, the understanding of which can be murky, and tends to be sought when the trustee is already inside a situation.
We recommend a proactive approach to understanding and planning for this circumstance. Let’s examine the relevant provisions of the Uniform Trust Code (UTC) and the Restatement (Third) of Trusts (Restatement Third) on this topic, identify common scenarios in the transition process that may implicate these duties or otherwise prompt questions and consider some practical steps trustees and drafting counsel may pursue, both proactively and concurrently, to seek to address these situations and minimize the associated risks.