Search

You’re Out! Good Cause, No Cause or Just Because!

Issue March/April 2023 April 2023 By Kathryn M. Barry
Probate Law Section Review
Article Picture
Kathryn M. Barry

The Appeals Court recently examined the intersection of a beneficiary’s desire to remove a co-trustee and provision 706(b)(4) of the Massachusetts Uniform Trust Code (MUTC), In the Matter of the Leo Kahn Revocable Trust. The settlor, Leo Kahn, appointed his wife Emily and stepson Joseph as co-trustees. When Leo died, the trust was divided into the spousal share and the donor’s family share. Emily and Joseph worked as co-trustees for nine years until Emily sought to remove Joseph as co-trustee of the spousal share. Emily argued that provision 706(b)(4) of the MUTC provided the basis for removing a trustee. The provision states: “The court may remove a trustee if . . . removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust and a suitable co-trustee or successor trustee is available.”1 Joseph argued that he could only be removed for cause and that provision 706(b)(4) did not apply to him under the terms of the trust.2 Joseph relied on two articles of the trust: article 16.06, which listed the reasons for removing a trustee; and article 16.11, which draws a distinction between for-cause removals and removals without cause. Most reasons listed under article 16.06 are very specific and could not apply to Joseph. However, the last reason is a catch-all and states that a trustee can be removed for “any other reason for which a state court of competent jurisdiction would remove a trustee.” Joseph argued that provision 706(b)(4) did not fall into this last category and, when read with article 16.11, could not provide a basis for him to be removed. The Probate and Family Court judge agreed and dismissed Emily’s claim. 

The Appeals Court decided that a two-pronged approach was necessary to determine if provision 706(b)(4) could be used as a basis to remove Joseph as co-trustee. The first question is, if the trust language is inconsistent with the MUTC, does the trust language or the code provision prevail? The general rule is that the language of the trust prevails over a provision of the MUTC, but there are a few exceptions. For example, trust language cannot override powers granted to the courts. However, this exception does not apply to 706(b)(4), as it “‘can only be invoked if it is not inconsistent with the material purpose of the trust.’”3 This is the second prong of the test: examine the trust language to see if provision 706(b)(4) can be applied. The Appeals Court states that when examining the clarity of trust language, the process is the same as the process used when reviewing written contracts. The first step is to “‘examine the language … by itself, independent of any extrinsic evidence ….’”4 If ambiguity exists, does the phrase “‘support a reasonable difference of opinion as to the meaning of the words employed’”?5 The words are not to be read in isolation; they should be considered within the context of the article and the trust as a whole. Finally, the “goal always is to ‘strive to discern’ and give effect to ‘the settlor's intent.’”

After applying this method, the Appeals Court concluded that provision 706(b)(4) could be used as a basis to remove a trustee, despite the fact that the trust was executed six years before the MUTC was adopted in 2012. The MUTC applies to all trusts regardless of execution date and all judicial proceedings concerning trusts regardless of starting date. The Appeals Court rejected Joseph’s argument that provision 706(b)(4) could not be invoked because it was equal to a removal without cause. There are four prerequisites that must be met to remove a trustee under provision 706(b)(4). Therefore, using it as a basis could not be considered a removal without cause. In addition, Joseph could not cite any authority stating that provision 706(b)(4) should be classified as a without-cause removal. Finally, the broad catch-all clause in article 16.06 was read to include provision 706(b)(4).

Although the Appeals Court concluded that provision 706(b)(4) could be a potential basis for removing a trustee, the question of whether Joseph could be removed as co-trustee remains unanswered. When article 16.06 and article 16.11 are read together, it is clear that the settlor meant to distinguish between removal for cause and removal without cause. However, there is no definition of without-cause removal. There is also no explanation as to why two different types of removal were created. The Appeals Court determined that because the trust contains ambiguity, Emily’s claim should not have been dismissed. The case was remanded so that evidence may be presented to clarify the settlor’s intent and resolve the ambiguity.

Kathryn M. Barry is an attorney focusing on estate administration and estate planning. She is the legislative liaison for the Massachusetts Bar Association’s Probate Law Section Council. She received her J.D. from New England Law Boston and her LL.M. from Boston University School of Law.
                                                                        
1. In The Matter of the Leo Kahn Revocable Trust, N0.21-P-929,2 (2022).

2. Id. at 3

3. Id. at 7

4. Id. at 8

5. Id.

6. Id.