Resigning as a Tennessee trustee: the 30 days' notice, the hand-off, and what does not end

Two ways to resign

A trustee may resign upon at least 30 days' notice to the qualified beneficiaries, the settlor if living and all cotrustees, or with the approval of the court (Tenn. Code Ann. § 35-15-705(a)). In approving a resignation, the court may issue orders and impose conditions reasonably necessary to protect the trust property ((b)). A charity expressly designated to receive distributions may receive the notice as a qualified beneficiary (Tenn. Code Ann. § 35-15-110(a)).

Who fills the vacancy

A resignation creates a vacancy (Tenn. Code Ann. § 35-15-704(a)(3)). If a cotrustee remains in office the vacancy need not be filled; if the trust has no remaining trustee it is filled ((b)) — for a noncharitable trust, by the person the terms designate as successor, then by a person the qualified beneficiaries appoint by unanimous agreement, then by a person the court appoints ((c)). The court may also appoint an additional trustee or a special fiduciary whenever it considers one necessary ((e)).

The hand-off

Until the trust property is delivered to a successor trustee or another person entitled to it — unless a cotrustee remains or the court orders otherwise — a trustee who has resigned keeps the duties of a trustee and the powers necessary to protect the trust property (Tenn. Code Ann. § 35-15-707(a)), and delivers the property within a reasonable time ((b)). Before delivering, the resigning trustee may petition the court for approval of its accountings and a release and discharge from liability under Tenn. Code Ann. § 35-15-205 ((c)).

Recording, where the trust holds real estate

Where real estate is part of the trust property and a trustee resigns without a court order, the resigning trustee executes and records an instrument reciting the resignation, giving the successor trustee's name and address, and identifying each parcel the trust holds; if the resigning trustee does not record it within 30 days after resigning, the successor — or a remaining trustee where there is no successor — executes and records it (Tenn. Code Ann. § 35-1-101(b)). A court order accepting a resignation and appointing a successor, or a memorandum of it, is recorded in each county where trust real estate lies ((a)).

Closing the account

Two routes close a resigning trustee's account. A qualified beneficiary or the successor trustee may petition the court for a final accounting by the departing trustee, and the departing trustee may petition to have its final accounting approved; approval relieves the trustee from liability for the period it covers (Tenn. Code Ann. § 35-15-205(a), (e)). Or the trustee may send the discharge notice upon its resignation — with the statement of assets and liabilities, receipts and disbursements, and a proposal for distribution — and, absent a specific written objection within 45 days after receipt, is relieved from liability for its most recent continuous period of service (Tenn. Code Ann. § 35-15-817(b), (c), (h)).

What resignation does not end

Any liability of a resigning trustee, or of the sureties on its bond, for its acts or omissions is not discharged or affected by the resignation (Tenn. Code Ann. § 35-15-705(c)). Absent information that adequately disclosed a potential claim, which starts a one-year period, a beneficiary's breach claim runs within three years after the first of the trustee's resignation, the end of the beneficiary's interest or the end of the trust (Tenn. Code Ann. § 35-15-1005(a), (c)).

The statutes, verbatim

• Real property; documents to be recorded; trust property

  Tenn. Code Ann. § 35-1-101 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Petition for final accounting on resignation, removal or termination

  Tenn. Code Ann. § 35-15-205 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Vacancy in trusteeship; appointment of successor

  Tenn. Code Ann. § 35-15-704 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Resignation of trustee

  Tenn. Code Ann. § 35-15-705 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Delivery of property by former trustee; petition for release

  Tenn. Code Ann. § 35-15-707 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Distribution on termination, removal or resignation; discharge notice

  Tenn. Code Ann. § 35-15-817 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

How much notice does a Tennessee trustee give to resign?

At least 30 days' notice to the qualified beneficiaries, the settlor if living and all cotrustees — or the trustee may resign with the court's approval (Tenn. Code Ann. § 35-15-705(a)).

Does a resigning Tennessee trustee stay responsible until the successor takes over?

Until the trust property is delivered, a trustee who has resigned keeps the duties of a trustee and the powers needed to protect the property, unless a cotrustee remains or the court orders otherwise (Tenn. Code Ann. § 35-15-707(a)).

Does resigning end a trustee's liability?

No. A resignation does not discharge liability for the trustee's acts or omissions (Tenn. Code Ann. § 35-15-705(c)); a court-approved final accounting or a discharge notice drawing no timely objection relieves the trustee for the period it covers (Tenn. Code Ann. § 35-15-205(e); § 35-15-817(h)).

General information about Tennessee law, not legal advice.