Beyond The Will, Client Compass

There may come a time in your life when you are in need of a fiduciary. A fiduciary relationship is deemed to exist when one party is bound to act for the benefit of another party. You may have the opportunity to choose your own fiduciary, such as by appointing your Power of Attorney. A court may need to appoint a guardian or conservator to act on your behalf during your lifetime. You may learn you are the beneficiary of a trust; therefore, your trustee is your fiduciary. In your Will, you will likely appoint a personal representative to serve as a fiduciary on behalf of your estate and your heirs after your death.  

The standard for a fiduciary appointment is relatively consistent, whether a personal representative, trustee, guardian, or conservator: a suitable individual is entitled to be appointed and should be allowed to serve if nominated. However, you may not always be able to choose your fiduciary. For example, the donor (or the person creating a trust) will choose the trustee of the trust from which you benefit, or the testator (or the person signing the Will) will nominate the personal representative of the estate from which you are inheriting. In those cases, you may seek to remove or “fire” your fiduciary if they are unsuitable. 

The grounds on which you may seek to remove your fiduciary are vague, but the court has provided some guidance as outlined below.  

WHO CAN SEEK REMOVAL?

If your fiduciary is unsuitable (which is defined below), the court has the ability, on its own accord, to remove him or her from their position of power. Various individuals also have standing to seek removal. The donor, a co-trustee, or a beneficiary may request the court to remove a trustee. An interested party, generally a party with a beneficial interest, has the standing to seek the removal of a personal representative. It is important to note that it is not necessary for all of the beneficiaries of a trust to act together; a beneficiary may act alone. Parties with standing to remove a fiduciary are typically those with a legal interest in an estate, such as legatees and creditors. The removal of a guardian or conservator may also be requested by an interested person or by the incapacitated person for “good cause.”  

GENERAL GROUNDS FOR REMOVAL 

Whether a personal representative, a trustee, a guardian, or a conservator, the grounds for removal for any fiduciary are somewhat vague but generally consistent in Massachusetts. Removal of a fiduciary based on unsuitability is the most common ground and also the most litigated. The term “unsuitable” is defined by the Massachusetts Supreme Judicial Court as follows:

[U]nsuitableness implies no want of capacity or mental infirmity, but an unfitness arising out of the situation of the person in connexion [sic]with the estate of which he is administrator, either because of his being indebted to it, or having claims upon it, or in the interest he has under a will, or his situation as an heir at law.

Beyond a finding of “unsuitability,” Courts may also look to additional factors, including past maladministration of a similar trust, bad character, misconduct, neglect of duty, or physical or mental incapacity. 

Also, the existence of an interest in conflict with his duty or a mental attitude toward his duty or toward some person interested in the estate that creates reasonable doubt about whether the personal representative will act honorably, intelligently, or efficiently may be grounds for removal.  

WHO CAN BE REMOVED: PERSONAL REPRESENTATIVE

After your loved one’s death, you may learn that you are either an heir or devisee (or both) under their estate. You may then learn that the personal representative charged with administering the estate is a known liar, cheat, and overall “bad apple.” 

You, as the heir/devisee, may seek their removal. Statute and case law also allow a probate court judge to order the removal of a personal representative on their own accord if found unsuitable. In addition to unsuitability, a personal representative may be removed for failure to perform a statutory duty pertaining to the office. These statutory duties include: failing to file an inventory, failing to file an account after being ordered to do so, and failing to post bond. In addition, personal representatives will be removed if indicted for, or convicted of, murder in the first or second degree, manslaughter, or as an accessory before the fact of such crimes against the decedent. If you believe that the personal representative has a personal interest that may conflict with and prevent him from doing his duty to the estate, you may also seek their removal.  

WHO CAN BE REMOVED: GUARDIAN/CONSERVATOR 

Similar to removing personal representatives, the guardianship and conservatorship statutes do not explicitly define the “good cause” warranting removal. The relationship between a guardian and the individual under guardianship (also known as the “incapacitated person”) is fiduciary in character. If the guardian fails to act in absolute good faith or has a conflict of interest, you may seek his removal.  

As with all removal cases, the court has broad discretion, and the finding for removal is entirely fact specific and guided by case law. 

Various examples of “good cause” for removal include a guardian that has alienated the affection of an incapacitated person from their capable mother; hostility between the guardian and the incapacitated person; or if the guardian or conservator fails to satisfy his or her duties such as filing a bond, account or inventory. If a guardian or conservator becomes mentally ill or otherwise incapable of performing their obligations, the Probate Court may remove him on their own accord. 

WHO CAN BE REMOVED: TRUSTEES

Trustee removal is extremely fact specific, and the court’s standards for removal vary. Specific instances where removal was warranted include:

• If the trustee becomes identified with the adverse interests of a beneficiary.
• If the trustee arbitrarily refuses to make payments at his discretion.
• If the trustee distributes trust property for personal gain.

A trustee must also act in good faith, with reasonable prudence and sound judgment.  

In determining whether to pursue trustee removal, an important factor to consider is whether the donor (i.e., the creator of the trust) chose the trustee. A court will likely be reluctant to remove a trustee appointed by the donor. In cases of alleged hostility, trustee removal is not warranted when the claimed hostility does not affect how the trust is administered. In addition, simple trustee error, even if it constitutes a technical breach, may not warrant removal. Courts do not commonly remove the trustee merely for a few errors of judgment that can easily be fixed and will likely not happen again.  

HOW TO REPLACE

Whether replacing a personal representative, guardian, or conservator, the court may appoint “some other suitable person” if so requested by the person requesting removal. The appointment of a successor personal representative is typically governed by statute and, in Massachusetts, allows for an appointment at the same time as the removal of the previous fiduciary. The Petition for Removal may contain the nomination of a specific person to be appointed as the successor fiduciary. 

However, the court retains the discretion to reject the nominee if unsuitable or if it finds other evidence as to why that nominee should not be appointed. Generally, if a personal representative is removed and the Will nominates a successor, the court will appoint the nominated successor if suitable. In addition, the court is empowered to appoint successor personal representatives even in cases where the Will includes a clause providing that no alternate or successor trustees could be appointed.

A person seeking to replace a guardian would file two simultaneous petitions: one seeking the current guardian’s removal and a second petition requesting the appointment of a new guardian. If the guardian himself wishes to resign, he may petition for his resignation and, on the same form, name the new proposed guardian. If the court, on its own accord, appoints a successor guardian following the former guardian’s removal, the court shall follow the same procedures to protect the incapacitated person’s rights that it used when appointing the original guardian.

Similarly, if a conservator is unable to perform their duties effectively, an interested person or the incapacitated person may file two petitions: one petition requesting the removal of the current conservator and a second petition requesting the appointment of a new conservator. 

Like in guardianship, the conservator himself may resign and petition for the appointment of a successor in one petition. The court may appoint a successor conservator, following the same procedures to safeguard the rights of the protected person that apply to a petition for the appointment of a conservator.

Where the removal, death, or resignation of a trustee has left a vacancy, the law in Massachusetts provides the exclusive method of filling the vacancy, to be filled by order of priority: (1) by a person designated by the terms of the trust to act as successor trustee; (2) by a person appointed by unanimous agreement of the qualified beneficiaries; or (3) by a person appointed by the court. Therefore, if you and the other beneficiaries of a trust are able to agree, you may petition the court together to nominate a new successor trustee.