Author:
Brad Bedingfield, Esq., Wilmer Cutler Pickering Hale and Dorr LLP
On January 15, 2009, the Massachusetts Uniform Probate Code (the “MUPC”) was signed into law. Certain provisions of the MUPC, pertaining to guardians, conservators, and durable powers of attorney, came into effect on July 1, 2009. The remainder of the MUPC was set to come into effect on July 1, 2011, and includes provisions that will streamline procedures for appointment of personal representatives and for probate of certain estates, limit court supervision over testamentary trusts, liberalize requirements for disposition of tangible personal property, and change certain default rules relating to intestate succession, division of property among descendants, omitted children, and the effects of marriage and divorce on estate planning documents.
In late 2010, Chief Justice Carey of the Probate and Family Court sought deferral of this July 1, 2011 starting date, in light of certain staffing and budgetary pressures facing the courts. In response to Chief Justice Carey’s request, the legislature included in a supplemental appropriations bill (Bill H5128) a provision (Section 24) deferring implementation of the remaining provisions of the MUPC until January 2, 2012. Governor Patrick signed the bill on January 3, 2011.
A discussion of law and developments in the trusts and estates field.
Call for authors: The BBA Trusts & Estates Secton is seeking Massachusetts attorneys to author articles. If you are interested, please contact the Editors for more information.
Tuesday, January 18, 2011
Tuesday, January 11, 2011
Alert: New Act Allows for Creation of Trusts for the Care of Animals
Author:
Matthew Hillery, Edwards, Angell, Palmer & Dodge LLP
On January 7, 2011, Governor Patrick signed into law “An Act Relative to Trusts for the Care of Animals.” This act provides for the first time that an individual may establish an enforceable trust under Massachusetts law for the benefit of one or more specific animals. It enables pet owners to provide for pets that survive them through special estate planning. The new act will be codified at section 3C of Chapter 203 of the General Laws and will come into effect 90 days after its enactment.
Previous to the enactment of the law, pet owners were limited in how they could provide for their pets after the owners had died. The Act now provides that a trust for the care of one or more animals alive during the settlor’s life is valid following the donor’s death. During the trust term, the trustee may use the income and principal for the benefit of the covered animals. Unless expressly provided otherwise in the trust instrument, the Act forbids the trustee to convert any of the trust property to his or her own use other than for the payment of reasonable trustee fees and administration expenses. The settlor or other custodian of an animal benefiting from the trust may transfer custody of the animal to the trustee at any time after the creation of the trust, although the act does not appear to require it.
The trust will terminate upon the death of the last survivor of the animals named as beneficiaries or upon such earlier time as is specified in the trust instrument. The act expressly excepts trusts for animals from application of the rule against perpetuities. This provision is helpful because, at common law, an animal cannot constitute a measuring life. See RESTATEMENT (SECOND) TRUSTS § 124 cmt. f (1959). It is therefore possible to create trusts for the benefit of animals with very long lives (such as certain kinds of tortoises or birds), without worry that the trust may violate the rule against perpetuities. This portion of the act will require technical correction in the future, as the act’s reference to the statutory rule against perpetuities is to Chapter 184A of the General Laws rather than to the new version in the Massachusetts Uniform Probate Code at Chapter 190B, which will supersede it.
Upon the termination of a trust for animals, the act directs the trustee to transfer the remaining property in the following order: (1) as directed in the trust instrument; (2) to the settlor, if living; (3) as part of the residue of the transferor’s estate, if the trust was created under a non-residuary clause of the transferor’s will; or (4) to the settlor’s heirs at law.
The amount of property with which a trust for animals may be funded is not unlimited. The act gives the court the power to reduce the amount of property held in the trust if that amount “substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health or appearance of the animal or animals” benefiting from the trust. Presumably, the appropriate amount of property with which to fund the trust will depend upon the type of animal benefiting from the trust. An animal with a long life expectancy or high cost of upkeep (such as a horse) should merit a larger trust than an animal with a short life or low cost (such as a gerbil). Any property removed from the trust by the court will pass as if the trust had then terminated.
Trusts for the care of animals were traditionally considered to be “honorary trusts.” Such a trust would be valid if the trustee was willing to accept it, but would lack a beneficiary to enforce it. 2 AUSTIN WAKEMAN SCOTT ET AL., SCOTT AND ASCHER ON TRUSTS § 12.11.3 (2006). The new act squarely addresses this problem by granting a long list of individuals the power to enforce the trust. These enforcers include an individual designated for that purpose in the trust instrument, a person having custody of an animal that benefits from the trust, a remainder beneficiary or an individual appointed by the court upon application by an individual or a charity.
The court may fill any vacancy in the office of trustee if the governing instrument creating the trust for animals does not provide a mechanism for doing so. In addition, the court may order the transfer of property to another trustee if necessary to ensure that the intended use of the property is carried out.
Section 408 of the proposed Massachusetts Uniform Trust Code also contains provisions authorizing the establishment of trusts for the care of animals. Although the overall substance is the same, the provisions in Trust Code are less extensive than those in the new act, provide less guidance on the administration and enforcement of the trust and do not address the application of the rule against perpetuities. Should the Trust Code be enacted, it will be necessary to integrate its provisions with those of the new act.
Matthew Hillery, Edwards, Angell, Palmer & Dodge LLP
On January 7, 2011, Governor Patrick signed into law “An Act Relative to Trusts for the Care of Animals.” This act provides for the first time that an individual may establish an enforceable trust under Massachusetts law for the benefit of one or more specific animals. It enables pet owners to provide for pets that survive them through special estate planning. The new act will be codified at section 3C of Chapter 203 of the General Laws and will come into effect 90 days after its enactment.
Previous to the enactment of the law, pet owners were limited in how they could provide for their pets after the owners had died. The Act now provides that a trust for the care of one or more animals alive during the settlor’s life is valid following the donor’s death. During the trust term, the trustee may use the income and principal for the benefit of the covered animals. Unless expressly provided otherwise in the trust instrument, the Act forbids the trustee to convert any of the trust property to his or her own use other than for the payment of reasonable trustee fees and administration expenses. The settlor or other custodian of an animal benefiting from the trust may transfer custody of the animal to the trustee at any time after the creation of the trust, although the act does not appear to require it.
The trust will terminate upon the death of the last survivor of the animals named as beneficiaries or upon such earlier time as is specified in the trust instrument. The act expressly excepts trusts for animals from application of the rule against perpetuities. This provision is helpful because, at common law, an animal cannot constitute a measuring life. See RESTATEMENT (SECOND) TRUSTS § 124 cmt. f (1959). It is therefore possible to create trusts for the benefit of animals with very long lives (such as certain kinds of tortoises or birds), without worry that the trust may violate the rule against perpetuities. This portion of the act will require technical correction in the future, as the act’s reference to the statutory rule against perpetuities is to Chapter 184A of the General Laws rather than to the new version in the Massachusetts Uniform Probate Code at Chapter 190B, which will supersede it.
Upon the termination of a trust for animals, the act directs the trustee to transfer the remaining property in the following order: (1) as directed in the trust instrument; (2) to the settlor, if living; (3) as part of the residue of the transferor’s estate, if the trust was created under a non-residuary clause of the transferor’s will; or (4) to the settlor’s heirs at law.
The amount of property with which a trust for animals may be funded is not unlimited. The act gives the court the power to reduce the amount of property held in the trust if that amount “substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health or appearance of the animal or animals” benefiting from the trust. Presumably, the appropriate amount of property with which to fund the trust will depend upon the type of animal benefiting from the trust. An animal with a long life expectancy or high cost of upkeep (such as a horse) should merit a larger trust than an animal with a short life or low cost (such as a gerbil). Any property removed from the trust by the court will pass as if the trust had then terminated.
Trusts for the care of animals were traditionally considered to be “honorary trusts.” Such a trust would be valid if the trustee was willing to accept it, but would lack a beneficiary to enforce it. 2 AUSTIN WAKEMAN SCOTT ET AL., SCOTT AND ASCHER ON TRUSTS § 12.11.3 (2006). The new act squarely addresses this problem by granting a long list of individuals the power to enforce the trust. These enforcers include an individual designated for that purpose in the trust instrument, a person having custody of an animal that benefits from the trust, a remainder beneficiary or an individual appointed by the court upon application by an individual or a charity.
The court may fill any vacancy in the office of trustee if the governing instrument creating the trust for animals does not provide a mechanism for doing so. In addition, the court may order the transfer of property to another trustee if necessary to ensure that the intended use of the property is carried out.
Section 408 of the proposed Massachusetts Uniform Trust Code also contains provisions authorizing the establishment of trusts for the care of animals. Although the overall substance is the same, the provisions in Trust Code are less extensive than those in the new act, provide less guidance on the administration and enforcement of the trust and do not address the application of the rule against perpetuities. Should the Trust Code be enacted, it will be necessary to integrate its provisions with those of the new act.
Monday, January 3, 2011
T&E Litigation Update - Rostanzo v. Rostanzo
Author:
Mark E. Swirbalus, Esq., Day Pitney LLP
The T&E Litigation Update is a recurring column summarizing recent trusts and estates case law. If you have question about this update or about T&E litigation generally, please feel free to e-mail the author by clicking on his name above.
Rostanzo v. Rostanzo
In Rostanzo v. Rostanzo, Case No. 09-P-1671, 2010 Mass. App. Unpub. LEXIS 1334 (Dec. 14, 2010), a decision issued pursuant to Rule 1:28, the Appeals Court affirmed the superior court’s dismissal of the plaintiff's quantum meruit claim against the decedent’s estate for the uncompensated “services” she allegedly provided to the decedent.
The plaintiff was married to the decedent. Prior to marrying, they entered into an antenuptial agreement which stated that each would continue to own the real and personal property with which they came to the marriage and that both would abandon any rights or claims to the other's property. In connection with a separate proceeding that was commenced in probate court, the validity of the antenuptial agreement was upheld. Based on the validity of the antenuptial agreement, the superior court and then the Appeals Court ruled that the plaintiff had effectively contracted away her quantum meruit claim. “That rather comprehensive contract essentially specifies that the plaintiff waived any interest in any aspect of the estate without reservation of any obligation that the decedent undertook to ‘take care’ of the plaintiff upon his death. Given that there is a binding contract addressing the very subject that the plaintiff here presses, the quantum meruit claim is necessarily and fatally flawed.”
Mark E. Swirbalus, Esq., Day Pitney LLP
The T&E Litigation Update is a recurring column summarizing recent trusts and estates case law. If you have question about this update or about T&E litigation generally, please feel free to e-mail the author by clicking on his name above.
Rostanzo v. Rostanzo
In Rostanzo v. Rostanzo, Case No. 09-P-1671, 2010 Mass. App. Unpub. LEXIS 1334 (Dec. 14, 2010), a decision issued pursuant to Rule 1:28, the Appeals Court affirmed the superior court’s dismissal of the plaintiff's quantum meruit claim against the decedent’s estate for the uncompensated “services” she allegedly provided to the decedent.
The plaintiff was married to the decedent. Prior to marrying, they entered into an antenuptial agreement which stated that each would continue to own the real and personal property with which they came to the marriage and that both would abandon any rights or claims to the other's property. In connection with a separate proceeding that was commenced in probate court, the validity of the antenuptial agreement was upheld. Based on the validity of the antenuptial agreement, the superior court and then the Appeals Court ruled that the plaintiff had effectively contracted away her quantum meruit claim. “That rather comprehensive contract essentially specifies that the plaintiff waived any interest in any aspect of the estate without reservation of any obligation that the decedent undertook to ‘take care’ of the plaintiff upon his death. Given that there is a binding contract addressing the very subject that the plaintiff here presses, the quantum meruit claim is necessarily and fatally flawed.”
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