Day Pitney remains committed to providing quality legal counsel, while protecting our clients and employees, and transforming our communities into more just, equal and equitable spaces. For more information, please visit our COVID-19 Resource Center | Racial Justice and Equity Task Force.
In Shepard v. Barrell, Case No. 09-P-1658, 2010 Mass. App. Unpub. LEXIS 1146 (Oct. 22, 2010), a decision issued pursuant to Rule 1:28, the Appeals Court affirmed the denial of a motion for summary judgment seeking the partial termination of certain trusts.
The settlors established six trusts between 1923 and 1931. The trusts provide that one half of the principal is to be held for the benefit of the settlors' daughter and her descendants, and the other half for the benefit of the settlors' son and his descendants. The trusts are to terminate twenty years after the death of the last of the named beneficiaries, and upon termination the principal vests and is to be distributed to the settlors' then-living issue.
One of the settlors' great-grandchildren ("Shepard") and his daughters filed an equity action for the termination and distribution of what they claimed was Shepard's twelve percent interest in the principal. The plaintiffs argued that termination was proper because (1) the trusts have no remaining purpose, (2) Shepard's interest vested, (3) his interest is severable from the other interests, (4) all of the beneficiaries consented to termination of Shepard's portion of the trusts, and (5) if Shepard's portion were not terminated in 2010, there is a risk that his share of the principal would be subject to the federal GST tax.
Although the court acknowledged that it has the discretion to order early termination of a trust "where all of its objects and purposes have been accomplished, where the interests under it have all vested, and where all parties beneficially interested desire its termination[,]" the court denied the plaintiffs' request for early termination, holding as follows.
First, the purpose of the trusts, to provide financial support and long-term financial stability for the settlors' descendants, as evidenced by the structure of the trusts and the inclusion of spendthrift provisions, would be ongoing until the stated time for termination.
Second, the settlors did not intend to create severable beneficial interests in the trusts. Rather, the trusts provide the opposite, expressly prohibiting the division of the principal into separate shares.
Third, Shepard's interest had not vested because the trusts are not to terminate until twenty years after the death of the last named beneficiary, and several named beneficiaries are still alive. Therefore, the termination date remained more than twenty years away.
Fourth, not all of the beneficiaries had consented to early termination. Shepard's argument that he alone needs to consent to the termination of his separate share was unavailing. Moreover, at least three beneficiaries had expressly denied their consent, and consent was not provided on behalf of unborn and unascertained beneficiaries.
Finally, the trusts were exempt from the GST tax because they were irrevocable prior to September 25, 1985, and there had been no disqualifying additions to the trusts since that date. On this point, the court noted that appreciation in the value of a trust and undistributed income added to the trust are not considered additions to the principal for GST purposes.
Kaitlyn (Katie) Sapp co-presented on "Updates in Probate Law and Practice" at the Massachusetts Bar Association's Ninth Annual Probate Law Conference on November 8.
Margaret Meehan, Tiana Gianopulos and Alexis Gettier collaborated on an article, "New Direction: The Connecticut Uniform Directed Trust Act" for the Quinnipiac Probate Law Journal.
Mark Romance authored an article, "Five Tips for Representing a Non-Party Served with a Document Subpoena: Welcome to the Party?," published by the American Bar Association Section of Litigation.
Mark A. Romance authored an article, "Five Tips for an Effective Mediation Statement," which was published by the American Bar Association, Section of Litigation.
New Jersey Office Managing Partner Paul Marino was featured in Capital Analytics Associates' Invest: North Jersey article, "Maintaining the Emphasis on Diversity, Equity and Inclusion."
Six Boston-based Individual Clients Department Day Pitney attorneys were named to Boston Magazine's Inaugural Top Lawyers of 2021 List.
Adam Myron, senior counsel resident in Day Pitney's West Palm Beach office, is running for judge in south Florida.
Alisa Hacker was appointed to the Boston Bar Association Virtual Hearing Resource Guides Probate Team.
Day Pitney's Michael Napoleone has been appointed to the Palm Beach County League of Cities board of directors.
This website may use cookies, pixel tags and other passive tracking technologies, including Google Analytics, to improve functionality and performance. For more information, see our Privacy Policy. By using our website, you are consenting to our use of these tracking technologies. You can alter the configuration of your browser to refuse to accept cookies, but if you do so, it is possible that some areas of web sites that use cookies will not function properly when you view them. To learn more about how to delete and manage cookies, refer to the support instructions for each browser (e.g., see AllAboutCookies.org). You may locate Google Analytics' currently available opt-outs for the web here.
This website may use cookies, pixel tags and other passive tracking technologies, including Google Analytics, to improve functionality and performance. For more information, see our Privacy Policy. By using our website, you are consenting to our use of these tracking technologies. You can alter the configuration of your browser to refuse to accept cookies, but if you do so, it is possible that some areas of web sites that use cookies will not function properly when you view them. To learn more about how to delete and manage cookies, refer to the support instructions for each browser (e.g., see AllAboutCookies.org). You may locate Google Analytics' currently available opt-outs for the web here.