The T&E Litigation Update is a recurring column summarizing recent trusts and estates case law. If you have questions about this update or about T&E litigation generally, please feel free to e-mail the author by clicking on his name above.
Comeau v. Coache
In Comeau v. Coache, Case No. 09-P-1984, 2010 Mass. App. Unpub. LEXIS 101 (Jan. 24, 2010), a decision issued pursuant to Rule 1:28, the Appeals Court reversed a judgment of the probate court terminating the plaintiff’s life estate in the trust property.
Plaintiff was granted a life estate in a home in Ipswich held in the Comeau Family Trust. The relevant provision of the trust allows plaintiff to “continue to occupy the dwelling as his principal residence, provided that he pay all real estate taxes, insurance, maintenance and utilities for the premises.” When plaintiff sought an order compelling the remaindermen to reimburse him for their proportional share of the cost of replacing certain windows, which he claimed to be a capital improvement, and for which he had already paid, the remaindermen sought to terminate plaintiff’s life estate, arguing that the replacement of the windows constituted maintenance work for which plaintiff was solely responsible.
The probate court decided in favor of the remaindermen, finding that the window-replacement work constituted maintenance and terminating plaintiff’s right to occupy the property. In reversing this decision, the Appeals Court held that, regardless of whether the replacement of the windows was a capital improvement or maintenance, plaintiff had in fact paid for the work, and his pattern of conduct over the years showed a continuing effort to preserve the integrity and value of the property. The Appeals Court also noted that although plaintiff’s obligation to pay for maintenance work could be interpreted to be a condition subsequent, such conditions are not favored in the law. “[T]here is substantial doubt whether the trust document intended that [plaintiff] automatically forfeit his right to occupy the premises if he breached his duty to pay for maintenance.”
Bruner v. Bruner
In Bruner v. Bruner, Case No. SJC-10653 (Jan. 27, 2011), the Supreme Judicial Court approved the reformation of a trust to conform with the settlor’s intent.
The trust instrument provides that its assets are to be divided between two subtrusts: the “marital trust” for the benefit of the settlor’s surviving spouse, and the “family trust” for the benefit of the remaining named beneficiaries and their issue. Unfortunately, because of a decline in the value of the assets since the settlor’s death, there would have been nothing left for the family trust after the marital trust was funded pursuant to the formula in the trust instrument.
The trustees sought to reform the trust to allow the family trust to be funded first, with the remaining assets allocated to the marital trust. The trustees argued that this modification would be consistent with the settlor’s intent to fund the family trust and to minimize the eventual taxes on her surviving spouse’s estate by reducing the assets allocated to the marital trust. With the assent of all parties and a guardian ad litem, the Court ordered the requested reformation.
Interestingly, after oral argument, the Court asked the trustees to supplement the record with affidavits from the attorney who drafted the trust instrument and from the surviving spouse. These affidavits provided the Court with information regarding the settlor’s estate planning goals that was missing from the record. The Court reminded parties in future cases to furnish “a full and proper record and the requisite degree of proof that they are entitled to the relief they seek.”