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Removal of Trustee

The Superior Court of Pennsylvania decided the McKinney case regarding a removal of a corporate trustee (67 A3d 824, May 2013). The facts were that the family members moved to another state and the original corporate trustee changed six times through bank mergers. There existed the same personnel throughout the bank mergers except upon the last merger there was a change in personnel and the new individuals were “ineffective and unresponsive.”. Also, the family moved to another state and the newest merger only had a trust office in a different part of the state. Also, the proposed new corporate trustee served four other family trusts. The Court reviewed the facts in conjunction with section 7766 of the Pennsylvania Uniform Trust Code, which provides that a court may remove a trustee if it finds that it is in the best interest of the beneficiaries and not inconsistent with the material purpose of the trust, and that there is a suitable new trustee available and that there has been a substantial change of circumstances. The statute also provides that a corporate reorganization, including a merger is not itself a substantial change in circumstances. However, the Court found that the removal of the trustee was in the best interest of the beneficiaries and the removal was not inconsistent with the material purposes of the trust and there was a suitable new trustee and there existed a substantial change in circumstances as described above.

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