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Trust Reformation Was Not A Remedy For Failing To Complete An Estate Plan

June 24, 2015

Authors

Luke Lantta

Trust Reformation Was Not A Remedy For Failing To Complete An Estate Plan

June 24, 2015

by: Luke Lantta

With several recent cases in which Massachusetts courts have permitted trust modification, we might have started to think that trusts would be liberally reformed in Massachusetts.  The Appeals Court of Massachusetts’ decision in Lesanto v. Lesanto (Rule 1:28 decision), however, reminds us that certain requirements must be met to reform a trust.

In October 2005, Paul Lesanto executed a will and the Paul Lesanto 2005 Revocable Trust (“First 2005 Trust”).  The bulk of Lesanto’s estate would pour over into the First 2005 Trust.  In 2010, however, Lesanto executed a new trust document that retained the name “The Paul Lesanto 2005 Revocable Trust” (“Second 2005 Trust”), but specifically provided that “[t]he Grantor wishes to establish a Trust which may receive property which the Grantor may transfer to it.  The Grantor

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Unintended Tax Results Permitted Trust Reformation

January 7, 2015

Authors

Luke Lantta

Unintended Tax Results Permitted Trust Reformation

January 7, 2015

by: Luke Lantta

Accomplishing a settlor’s tax objectives can be a major factor in creating a trust.  When a drafting error frustrates the settlor’s tax objectives, why shouldn’t  the trust instrument be reformed to reflect the intent of the settlor?  In O’Connell v. Houser, the Supreme Judicial Court of Massachusetts did just that – permitted reformation of a trust to embody the settlor’s intent and produce tax results that were consistent with the settlor’s objectives.

The George Houser Trust established two trusts for the benefit of George’s wife, Mary, and gave her a power of appointment over the marital trust.  When Mary died in 1993, the remaining principal in the George Houser Trust was divided into two “share trusts,” one for each of the Housers’ sons.  Each son had a limited testamentary power of

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More Authority For Trust Decanting?

August 19, 2014

Authors

Luke Lantta

More Authority For Trust Decanting?

August 19, 2014

by: Luke Lantta

Does the settlor’s grant of a broader power to a trustee necessarily, by implication, include the grant of the lesser power?  Practitioners have often answered “yes” to this question when it comes to justify so-called ‘common law’ trust decanting.  So, for example, if the settlor gave the trustee the discretionary authority to distribute the entirety of the corpus without regard to any standard, the argument is that the grant of that broad power would necessarily include the lesser power to decant.

In a different context, in an unpublished opinion in Leonard v. Maher (2014 Mass. App. Unpub. LEXIS 885) (Rule 1:28 decision), the Appeals Court of Massachusetts used similar logic to conclude that where the settlors, trustees, grantors and beneficiaries of a trust are the same people, the power to Read More

Massachusetts Supreme Court Approves Decanting in Kraft Family Trust

August 19, 2013

Authors

Tiffany McKenzie

Massachusetts Supreme Court Approves Decanting in Kraft Family Trust

August 19, 2013

by: Tiffany McKenzie

What does a trustee do when an irrevocable trust needs to be modified?  Circumstances or laws may have changed in ways that could not have been anticipated at the time the trust was drafted.  In the past, a trustee who wanted to change some aspect of an irrevocable trust had few options, other than a court order to reform the trust which can be a costly and lengthy process.  Now, many states have alleviated the necessity of court approval to modify trusts by permitting “decanting.”

Decanting is the term generally used to describe the distribution of trust property to another trust pursuant to the trustee’s discretionary authority to make distributions to, or for the benefit of, one or more beneficiaries.  Decanting may be permitted by statute, by the terms of the original trust or by court-created law.  Currently, Massachusetts has

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Who Should An Expert On Testamentary Capacity Talk To Before Rendering An Opinion?

February 27, 2013

Authors

Luke Lantta

Who Should An Expert On Testamentary Capacity Talk To Before Rendering An Opinion?

February 27, 2013

by: Luke Lantta

Whether a testator had the requisite capacity to execute a will is often the subject of lay testimony.  We’ve frequently talked here about how important the testimony of the drafting attorney, the attesting witnesses, and the notary are in undue influence or lack of testamentary capacity cases.  But, sometimes it may be worth getting an expert to testify in these cases especially when there may be some complex capacity issues.  If you get an expert, however, there’s still the issue of qualifying him or her.

And, even if you have an expert, here’s another reminder of how important the drafting attorney and witnesses to the will are.  In Fowler v. Kulhowvick (Rule 1:28 decision), a Massachusetts probate court actually rejected the expert testimony of a psychologist who failed to interview the drafting attorney and witnesses before offering an opinion on

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Trust Reformed To Comply With Provisions Of Internal Revenue Code

October 19, 2012

Authors

Luke Lantta

Trust Reformed To Comply With Provisions Of Internal Revenue Code

October 19, 2012

by: Luke Lantta

There aren’t a lot of cases out there dealing with reformation of trusts.  Many jurisdictions allow for reformation to conform with the settlor’s intent.  But settlors are usually understood to have meant what they said in the text of the trust instrument.  So what qualifies as an event worthy of trust reformation?

In Rockland Trust Company v. Attorney General, the Appeals Court of Massachusetts showed us one circumstance under Massachusetts law that would allow reformation of a trust:  avoiding adverse tax consequences, but with a caveat . . . .

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Massachusetts Law Retroactively Giving Inheritance Rights To Adopted Children Ruled Unconstitutional As Applied

August 29, 2012

Authors

Luke Lantta

Massachusetts Law Retroactively Giving Inheritance Rights To Adopted Children Ruled Unconstitutional As Applied

August 29, 2012

by: Luke Lantta

We’ve recently looked at the inheritance rights of children adopted out of families, now let’s look at the inheritance rights of children adopted into families.

Big news out of Massachusetts this week, as the Supreme Judicial Court ruled in Bird Anderson v. BNY Mellon, N.A. that a Massachusetts law that had significant implications for trusts and estates planners, fiduciaries, and especially adopted children was unconstitutional as applied to the trust case before it.

Let’s take a look at the law.

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Applying A Massachusetts Discretionary Distribution Clause

July 9, 2012

Authors

Luke Lantta

Applying A Massachusetts Discretionary Distribution Clause

July 9, 2012

by: Luke Lantta

Most grantors understand that their trustee shouldn’t have a court looking over its shoulder every time it exercises a discretionary power.  That’s why trustees are granted discretionary powers.

Despite a grantor’s broad grant of authority to a trustee, however, trustees often find themselves embroiled in litigation over the exercise of a discretionary power, particularly with respect to discretionary distributions.

In Thompson v. Anthony (unpublished), in the context of an unjust enrichment claim, the Appeals Court of Massachusetts considered the implication of a trust provision giving the trustees “absolute discretion” over distributions.

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Breach Of Fiduciary Duty And Undue Influence Complaint Against Church Elder Dismissed

May 14, 2012

Authors

Luke Lantta

Breach Of Fiduciary Duty And Undue Influence Complaint Against Church Elder Dismissed

May 14, 2012

by: Luke Lantta

It’s not that often we see a multi-count seemingly detailed breach of fiduciary duty and undue influence complaint get tossed on a motion to dismiss, but that’s what happened in Kaiden v. Zimonja (unpublished).

In affirming the trial court’s dismissal of the complaint, the Appeals Court of Massachusetts helps us understand what’s at the core of undue influence claims.

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Court Weighs In On Reasonableness Of Fees Paid By Estate To Administrator, Attorney, and Accountant

May 9, 2012

Authors

Luke Lantta

Court Weighs In On Reasonableness Of Fees Paid By Estate To Administrator, Attorney, and Accountant

May 9, 2012

by: Luke Lantta

Estate beneficiaries’ happiness is inversely proportional to the amount of money spent by an administrator for professional help.  That’s why we see a lot of disputes not over the hiring of a professional, but over the appropriateness of the total amount paid to a professional hired to help settle an estate, such as an attorney or accountant.

In Murphy v. Prescott (unpublished), the Appeals Court of Massachusetts weighed in on a group of heirs’ claims that certain fees paid to the administrator, an attorney, and an accountant in connection with settling an estate were unreasonable.   The appellate court also gave some helpful advice to attorneys about those pesky time sheets.

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