1976, August, Pg. 1091. Transferring A Trust To A More Appropriate Location.

5 Colo.Law. 1091

Colorado Lawyer

1976.

1976, August, Pg. 1091.

Transferring A Trust To A More Appropriate Location

1091Vol. 5, No. 8, Pg.1091Transferring A Trust To A More Appropriate LocationA provision of the Colorado Probate Code which apparently has not attracted much attention is § 15-16-305, C.R.S. 1973, dealing with the removal of a trustee and transfer of the trust to a location more convenient to the trust beneficiaries.

The problem in the past has often come up in this context: The husband, either a life-long resident of Colorado or while employed in the state, executes either a will or a revocable trust designating a local bank as trustee. In most cases the trustee has no real duties until after the death of the settlor. The instrument makes no provision for removal of the trustee and/or transfer of the place of administration of the trust.

At some time following the death of the settlor the family circumstances change. Possibly the spouse moves back to her original domicile or retires to some sunny retirement haven, or the children, now trust beneficiaries, move out of the state to pursue business or professional interests. The physical distance between the trustee and beneficiaries may produce feelings of inconvenience in the beneficiaries at best, or feelings of hostility (based on difficulties of communication, etc.) at worst. The beneficiaries raise the question: "Why can't we take the trust with us?"

As to trusts not covered by the Code, the initial response of the trustee may be varied. If the trustee is sympathetic, it may give encouragement to the beneficiaries, but point out the difficulties in its resigning from a legal viewpoint. Alternatively, it may take an essentially neutral position, commenting on the nature of its obligation to the deceased and stating that it would not oppose any court order of removal which the beneficiaries might be able to obtain. Finally, and particularly if the account is substantial or if its relationship with the settlor had been close, the trustee may emphasize the confidence which the deceased placed in it, state that it could not consider resigning for this reason, and state its intention to oppose any court attempts at removal. It would, of course, in addition to any of the above, most likely discuss the needs of the beneficiaries with them to see if the areas of...