In Michaud v. Forcier, Case No. 09-P-392, 2010 Mass. App. LEXIS 1296 (Oct. 5, 2010), the Appeals Court affirmed a decision of the probate court reforming the schedule of beneficiaries of a nominee trust and ordering the repayment of funds withdrawn from a joint account.
The decedent, who had a daughter and two grandchildren, placed her real estate (about 28 acres) in the nominee trust, under the terms of which the decedent retained a life estate and her daughter and two grandchildren were given equal shares as remainder beneficiaries. After establishing the trust, however, the decedent conveyed nearly half of the real estate (13.56 acres) to her daughter for nominal consideration. In order to effectuate this conveyance, the daughter had hired a lawyer and arranged for the co-trustee of the trust other than the decedent to resign, thereby allowing the decedent to sign the deed as sole trustee. The deed falsely recited that all of the beneficiaries of the trust consented to the conveyance. In truth, the other beneficiaries did not consent. They were not even aware of the trust. The daughter was the only beneficiary who was aware of the trust, and she was the person who fabricated the recitation of consent on the deed.
Following the conveyance, the decedent stated on two separate occasions that she intended the conveyance to be in lieu of any inheritance to the daughter, and so the daughter was instructed to assist the decedent in amending her estate plan. She never did so.
When the decedent died in 2005, the daughter filed a complaint in equity requesting termination of the trust. The two grandchildren counterclaimed, seeking reformation of the schedule of beneficiaries of the trust and the recovery of funds from a joint account in the names of the decedent and the daughter. The daughter emptied the account shortly after the decedent's death.
The court found that the daughter stood in a fiduciary relationship with the decedent, who relied on the daughter, and that the daughter breached her fiduciary duty by arranging for the conveyance of the real estate without disclosing the trust or its terms to the other beneficiaries, all to the benefit of the daughter. As a result of the breach, the court exercised its equitable power to reform the schedule of beneficiaries of the trust to eliminate the daughter as a beneficiary. The court also found that the joint account in the names of the decedent and the daughter was for convenience only, and ordered the daughter to repay the funds that she had withdrawn.
Day Pitney Newsletter
Clifford Nichols wrote an article, "When Addressing Cybersecurity and Data Breach, Don't Forget eDiscovery," for New Jersey Law Journal. The article is about how companies should consider eDiscovery and litigation response issues when making policy or infrastructure changes to address cybersecurity and data breach risks.
Day Pitney Press Release
Rick Sanders is quoted in an article, "Business Groups Encouraged by Legislators," in NJBIZ, which addresses political activity behind a bill to phase out New Jersey's estate tax. Under the bipartisan bill, the estate tax, which currently applies to inheritances valued at $675,000 or more, would be eliminated gradually over a five-year period. "It affects such a small part of the population," Sanders said. "It just strikes me as unusual that all of a sudden, this bill came. I think it's not coincidental that the governor was campaigning for president at the time he called for the repeal. For years and years, there's been proposals to increase the exemption to $1 million and it never got any traction in New Jersey."
Boston, Mass., January 20, 2016 – Day Pitney is pleased to announce Jillian Hirsch, a partner in Day Pitney’s Litigation Practice, has been selected as one of Massachusetts Lawyers Weekly’s 2015 Lawyers of the Year. Honorees were nominated by their colleagues, clients and other legal professionals for their outstanding professional accomplishments.
Boston, Mass. November 11, 2015 – Day Pitney is pleased to announce Leiha Macauley, a partner in Day Pitney’s Individual Clients Practice, has been selected as a 2015 Boston Rising Star by The National Law Journal.
Jillian Hirsch was quoted in an article, "Trust divisible in divorce despite possible new beneficiaries," in Massachusetts Lawyers Weekly. In the article, Hirsch, who represented the wife in the matter, explains why the Appeals Court's decision of Pfannenstiehl v. Pfannenstiehl is significant.
"It confirmed that an interest in a trust with an ascertainable standard--specifically one with a history of distributions woven into the fabric of the marriage--is a vested, presently enforceable interest and therefore properly included in a marital estate for purposes of equitable division of property in a divorce," she said.