In Matteson v. Walsh, Case No. 10-P-537, 2011 Mass. App. LEXIS 647 (May 2, 2011), the Appeals Court addressed whether a life tenant of real property had committed waste, and the appropriate remedy.
Dorothy Walsh (the "decedent") died in 1987. In her will, the decedent devised real property in Chatham consisting of a summer cottage and an unattached garage to her son Robert Walsh ("Walsh") as the life tenant, and thereafter, upon Walsh's death, to the heirs of Walsh and the decedent's other two children, Elizabeth Gay Matteson ("Matteson") and Catherine Baisly ("Baisly"). Walsh resided at the Chatham property, but he stopped paying taxes in or about 2004, resulting in the town's issuance of a notice of tax-taking, and he also stopped paying to maintain the property, causing it to fall into disrepair. Matteson paid some of the delinquent taxes and hired someone to repair the premises, which were described as being in "considerable distress." Eventually, however, Matteson filed suit against Walsh for waste.
The superior court found that Walsh had committed waste through his non-payment of taxes and by allowing the deterioration of the buildings, ordering Walsh to reimburse Matteson for the taxes and $53,000 in repair costs she paid. The superior court also divested Walsh of his life estate and ordered that he, Matteson and Baisly were to hold title to the property as tenants in common.
The Appeals Court affirmed in part, rejecting Walsh's argument that his failure to pay taxes did not result in waste because the property was neither seized nor sold. The Court reasoned that the only reason why the property was not seized and sold was that Matteson stepped in to pay the outstanding debt, and that the threat to the remainder interest was sufficient to constitute prejudice to the inheritance. "Permitting the real estate taxes assessed to the property to remain unpaid to the point that the taxing authority records a tax-taking amounts to waste." The Court also rejected Walsh's argument that his failure to maintain the property amounted to permissive waste for which he, as a life tenant, cannot be liable. The Court held that the notion of permissive waste applies to a tenant at will, and that a life tenant is under a higher duty to preserve the estate for the benefit of the remaindermen.
As for the appropriate relief, the Court held that the superior court had erred in granting Walsh a fee interest in common after having ordered divestment of his life estate. When Walsh was divested of his life estate, the remainder interests vested, and Walsh did not hold a remainder interest. If he had any heirs, their remainder interests might have vested, but he had none, and although he theoretically could have still produced an heir, the remainder interests are determined as of the date of recovery under the statute of waste, G.L. c. 242, § 1.
Day Pitney Partner Angela Titus McEwan authored an article, "The UTC and the Duty to Inform and Report," published in Trusts & Estates.
Keith Bradoc Gallant and Rebecca Iannantuoni authored an article, "When a Client Lacks Legal Competency, Who Files for the Divorce?," for Family Advocate, a publication of the American Bar Association Section on Family Law.
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.