M. Bradford Bedingfield, Wilmer Cutler Pickering Hale and Dorr LLP
Massachusetts Uniform Trust Code
Section 56 of Chapter 140 enacts the Massachusetts Uniform Trust Code (the “MUTC”). The MUTC (new Chapter 203E of the Massachusetts General Laws) generally replaces, and greatly expands upon, the trust law provisions (Article VII) of the Massachusetts Uniform Probate Code (the “MUPC”), which became effective on March 31, 2012. Apart from a few exceptions (described in Sections 61-65 of Chapter 140), the MUTC applies to all trust instruments, whenever created. Key features of the new MUTC include:
Non-Judicial Settlement Agreements (Sec. 111): Interested parties may now enter into binding non-judicial settlement agreements regarding matters such as trust interpretation, approval of accounts, directions to trustees, trustee liability and trustee powers.
Virtual Representation (Art. 3): Article 3 of the MUTC further develops the so-called “virtual representation” rules introduced in Sec. 1-403 of the MUPC (M.G.L. c. 190B). For example, the MUTC allows (barring a conflict of interest) parents to represent the interests of minor and unborn children, and allows an interested party to represent minor, unborn, incapacitated and not reasonably ascertainable beneficiaries with substantially identical interests. These rules should reduce the need for guardians ad litem and further facilitate settlement agreements.
Enforcement of Charitable Trusts (Sec. 405(c)): The settlor of a charitable trust now has standing to enforce the provisions of the trust.
Pet Trusts (Sec. 408): The MUTC allows for trusts for the care of one or more animals. These “pet trust” provisions replace M.G.L. c. 203 Sec. 3C.
Purpose Trusts (Sec. 409): A Massachusetts settlor may now establish a so-called “purpose trust,” which has no beneficiaries, but instead operates to further one or more valid purposes of the settlor.
Trust Modification (Sec. 411-417): The MUTC generally liberalizes Massachusetts law regarding modification and termination of trusts.
Trust Revocability (Sec. 602): Trusts established after the effective date of the MUTC are now presumed revocable unless the instrument expressly provides otherwise (reversing the longstanding Massachusetts default rule).
Majority Decision (Sec. 703): Trustees of trusts established after the effective date of the MUTC who are unable to reach a unanimous decision regarding any trust action may now act by majority vote, unless the instrument provides otherwise (reversing the longstanding Massachusetts default rule).
Trustee Resignation (Sec. 705): Trustees may now resign without court approval where the trust instrument is silent as to resignation.
Trustee Removal (Sec. 706): A trustee may now be removed (1) for serious breach of trust, (2) because of lack of cooperation among co-trustees that substantially impairs trust administration, (3) where because of unfitness or persistent failure to administer the trust effectively, removal is in the trustees’ best interests, or (4) where there is a substantial change of circumstances or removal is requested by all “qualified beneficiaries” (defined in Sec. 103) and removal is in the best interests of the beneficiaries and is not inconsistent with a material purpose of the trust.
Trustee Duties and Powers (Art. 8): The MUTC includes detailed provisions regarding the duties and powers of trustees.
Powers to Direct (Sec. 808): The MUTC allows for directed trustees.
Duty to Inform and Report to Beneficiaries (Sec. 813): Trustees must now keep qualified beneficiaries reasonably informed of trust administration. Within 30 days of accepting a trusteeship (or of the date on which a trust became irrevocable), a trustee must inform the qualified beneficiaries (or their representatives) in writing of the trustee’s name and address. The trustee must also now send statements of account (formal or informal) annually to current beneficiaries (except for beneficiaries who waive this right), and upon request to other qualified beneficiaries.
Limitation of Proceedings Against Trustees (Sec. 1005): The MUTC updates the rules regarding when beneficiaries may bring claims for breach of trust in certain circumstances.
Massachusetts Uniform Probate Code
Chapter 140 (Sections 3-52) makes various (primarily technical) changes to the MUPC. In particular:
Proceedings After Three Years (Sec. 3-108): It expands upon the ability of interested parties in certain circumstances to commence testacy or appointment proceedings where no such proceedings have occurred within the three-year period following the decedent’s death.
Resignation by Personal Representative (Sec. 3-610): It allows a personal representative to resign by filing a written statement with the court after having provided at least 15 days’ written notice to all interested persons, effective upon appointment of a successor.
Sale of Real Property (Sec. 3-715): It describes in greater detail the power of a personal representative appointed by formal or informal probate to sell real property.
Nursing Facility (Sec. 5-101(15)): It provides certain exceptions to the definition of “Nursing Facility” for purposes of the guardianship rules.
Medical Certificates (Sec. 5-303): It expands upon the class of professionals who may sign a medical certificate for purposes of guardianship proceedings.
Temporary Admission to Nursing Facilities (Sec. 5-309(g)): It allows guardians, in certain limited circumstances, to admit incapacitated persons to nursing facilities for up to 60 days without a finding by the court.
Revocation of Powers of Attorney (Sec. 5-504(c)): It clarifies prospectively the rules regarding good faith actions of agents who do not yet have actual knowledge of revocation of the agency by the principal.
Transfer of Certain Securities
Section 53 of Chapter 140 introduces new M.G.L. c. 196A, which allows certain securities holdings (up to a cumulative value of not more than $2,100) to be registered in the name of a surviving spouse, an adult child of the deceased, or a surviving father or mother, in certain circumstances, without formal or informal probate.
Probate and Family Court Fee Schedule
Finally, Section 60 of Chapter 140 establishes a revised Probate and Family Court fee schedule, replacing M.G.L. c. 262 Sec. 40. The revised fee schedule, like the other provisions of Chapter 140, is effective immediately.
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