A beneficiary can attempt to remove a trustee. Before the court will order removal, some cause usually must be shown why the trustee ought to be removed. The court will not interfere unless some beneficial end is thereby to be achieved. In some cases it has been said that it is beyond the court's jurisdiction to do so. What constitutes a sufficient cause or ground from removal is sometimes solely within the discretion of the court. Appellate courts will not reverse decisions made in the exercise of this discretion unless there has been such unreasonable action amounting to an abuse of discretion. Courts are more reluctant to remove a trustee who has been chosen by the settlor than one who is court-appointed. No matter what ground for removal is given by the court, such action is apt to have a serious effect on the general reputation of the trustee. Statutes prescribing grounds for removal are numerous, but many are phrased with such generality as to leave the court some discretion in the matter. The statutory lists of causes given is treated as illustrative and not as exclusive. The net effect is that so far as the grounds for removal are concerned, it is usually quite immaterial whether the proceeding is under a statutory provision or not. The number of possible situations which may make it desirable to remove a trustee is very large. Any attempt to state exhaustively the groups upon which a court may be induced to act would be futile as well a misleading.
Some specific grounds are:
Disobedience of directions in the trust instrument is usually a ground for removal. Attempts to thwart the settlor's plan of administration unauthorized disposals of trust property, making prohibited investments, and failure to make the investments ordered have all been held to justify removal. In such cases the trustee's financial responsibility is no defense.
The failure or refusal of a trustee to act in the affairs of the trust may furnish a basis for his removal. Clearly if he does nothing at all, he is removable. Failure to pay over to the beneficiary may also be grounds for removal.
Failure of the trustee to account usually is a ground for removal. Particularly is this true where a desire to conceal the true state of affairs is indicated. However, if the court is convinced that the affairs of the trust are in order and that the failure to report resulted merely from inadvertence, the trustee will not be removed.
Where the trustee has acquired a personal interest adverse to the trust, he is very likely to be removed.
The taking of excessive and unauthorized compensation by trustee is a clear ground of removal. In its most flagrant form it consists of taking secret profits in the form of commissions on the sale of trust property. Perhaps less reprehensible, but equally inimical to the interests of the beneficiaries, is the practice of openly charging compensation in excess of the value of services rendered.
These are a few potential grounds for removal, but like anything in this area, it depends on the unique, specific facts.
