Source: http://trustsandestates.bbablogs.org/category/uncategorized/page/5/
Timestamp: 2019-04-21 10:55:23+00:00

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In fall 2011, the Boston Bar Association’s Trusts & Estates Section offered twelve educational programs on timely topics and developments in trusts and estates law. Below is a summary of the programs that took place from September to December 2011. Links to written materials used in the programs are included where available.
Federal tax legislation, as it interacts with Massachusetts tax law, seems to have “accidentally” repealed the Massachusetts step-up basis of death. Speaker Kenneth P. Brier of Brier & Guerden LLP, discussed the origins of this problem, possible interpretive solutions, and legal developments.
Program materials can be found here.
This session provided a basic overview of the estate, gift and GST taxes. Speaker Geoffrey M. Mason of Ropes & Gray, LLP explained the scope of the taxes and how they drive certain aspects of the estate planning process.
A panel of trust officers and counsel from large institutional fiduciaries, consisting of Arthur W. Young III and Anthony L. Galvagna from the legal department of Bank of America Corporation, and Jennifer F. Galvagna and Norman Otto from U.S. Trust, Bank of America Private Wealth Management, gave a behind-the-scenes look into their best practices and procedures for avoiding risk in the administration of trusts.
The MUPC enacts sweeping changes to the construction, interpretation and administration of wills and trusts in Massachusetts. Speakers Ruth Mattson of Bowditch & Dewey, LLP and Kerry L. Spindler of Goulston & Storrs, PC discussed changes that can and should be made to Massachusetts estate planning forms in anticipation of the MUPC effective date.
This session provided an overview of documents found in many basic estate plans. Speaker Matthew R. Hillery of Edwards Wildman Palmer LLP discussed the general operation of wills, revocable trusts, durable powers of attorney and health care proxies. He also discussed important provisions found in these documents, with a special focus on marital deduction formulas.
New procedures for handling probate matters will come into effect in 2012 under the Massachusetts Uniform Probate Code (“MUPC”). The Massachusetts Probate Court has extensively prepared for the implementation of these new procedures and those handling probate matters in the Courts must now prepare themselves for the upcoming changes. This CLE course was designed as a practical guide to the application of the new MUPC to handle probate matters. The panel of speakers consisted of Mark A. Leahy of Whittum & Leahy, Middlesex Probate and Family Court Assistant Judicial Case Manager Jennifer M. Rivera Ulwick, Thomas P. Jalkut of Nutter McClennen & Fish LLP, Kerry L. Spindler of Goulston & Storrs, PC, Worcester Probate & Family Court Family Law Facilitator & Deputy Assistant Register Evelyn Patsos, and Jennifer Laucirica of Goodwin Procter LLP. The program introduced the new MUPC procedures, analyzed those procedures available to handle estates more efficiently, reviewed new forms, and provided guidance for handling matters pending on the MUPC effective date.
If you are interested in a copy of the CLE program materials, please contact the Boston Bar Association.
Durable Powers of Attorney are a common part of most estate plans. Unfortunately, these powerful documents are often misused. This program focused on solving problems when drafting Durable Powers of Attorney and advising clients on their use. Speakers Steven M. Cohen of Cohen & Oalican, LLP, Harriet Holzman Onello, and Matthew Marcus of Colucci Colucci Marcus & Flavin, PC discussed how to prevent financial abuse, language necessary to making Durable Powers of Attorney as useful as possible, and how to respond to problems arising from misuse of Durable Power of Attorney documents.
CARING FOR SENIORS – WHERE CAN WE TURN FOR CLIENTS, PARENTS AND OURSELVES?
Despite the well documented increase in the elderly population in the United States, most families are totally unprepared to deal with the issues that arise in caring for an elderly family member. This program covered the range of services available in the long term care system and presented strategies for planning ahead in order to avoid an “elder care crisis”. Speakers Helen K. Kass and Emily Saltz of Elder Resources discussed how services are financed, including differences between Medicare, Medicaid and long term care insurance. Participants learned useful strategies for communicating their concerns, whether for a family member or a client, and the importance of a team approach in dealing with elder care issues.
The Trusts & Estates Section Mid-Year Review covered recent federal and state case law, legislation and tax law matters. This year’s Mid-Year review touched on federal tax cases, Massachusetts case law, and legislative updates. Speakers included Kristin T. Abati of Choate Hall & Stewart LLP, Kelly A. Aylward of Bove & Langa, PC, Brad Bedingfield of Wilmer Cutler Pickering Hale and Dorr LLP, Alison Irving Glover of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, Alison E. Lothes of Sullivan & Worcester LLP, Stacy K. Mullaney of Fiduciary Trust Company, Boston, and Susan L. Repetti of Nutter McClennen & Fish LLP.
Panelists Vincent E. Bonzzoli of Family Estate Planning Law Group and Jennifer N. Collins of Nixon Peabody LLP, and moderator Geoffrey M. Mason of Ropes & Gray LLP, focused on how to initiate discussions with clients and spot advanced planning issues and opportunities.
This program presented a survey of trust and estate litigation cases from jurisdictions outside of Massachusetts. Speakers Joseph L. Bierwirth, Jr. and Shana Maldonado of Hemenway & Barnes LLP discussed enforceability of arbitration clauses in trust instruments, suits arising out of bad trust investments, attorney liability for trustee breaches and prudent investment during the economic downturn. They looked at specific cases addressing these issues and considered the implications in Massachusetts.
As we reported here, on October 11, 2011, the Massachusetts Department of Revenue issued, for practitioner comment, a two-part draft Directive addressing the extent to which assets passing from Massachusetts decedents in 2010 and thereafter may receive a step-up in cost basis for purposes of Massachusetts capital gains tax. In draft Directive 2, the DOR interpreted the law as providing that the Massachusetts cost basis of property acquired from decedents who die in 2011 or thereafter is full “stepped-up” basis. In draft Directive 1, however, instead of providing for a full step-up in cost basis for Massachusetts purposes, the DOR interpreted the law as providing for the “modified carryover” basis regime applicable for federal tax purposes under IRC § 1022 to estates of 2010 decedents whose executors elect out of application of estate tax.
As the deadline for filing the federal Form 8939 to allocate cost basis under §1022 for federal purposes (January 17, 2012) has approached, a number of practitioners have expressed concern regarding whether availability of the § 1022 cost basis allocation for Massachusetts purposes requires the Personal Representative to prepare a Form 8939, especially where the Personal Representative is not opting out of application of federal estate tax for 2010, and therefore has no federal Form 8939 requirement.
On January 12, 2012, the Massachusetts Department of Revenue issued the final Directive 11-7. In substance, the final Directive is consistent with the draft Directive – full step-up in cost basis for assets passing upon death in 2011 and thereafter, and IRC § 1022 modified carryover basis for assets passing upon death in 2010. The Final Directive confirms that this modified carryover basis regime applies to assets passing from the estates of 2010 decedents regardless of what election is made federally.
Directive 11-7 further confirms that there is no requirement to file anything at all with the Commonwealth, or otherwise to prepare a Form 8939, in order to allocate cost basis for Massachusetts purposes. However, the Personal Representative is required to send to all recipients of property from the estate of a 2010 decedent the written statement required under IRC § 6018(e). IRC § 6018(e) requires the Personal Representative to deliver this written statement within 30 days of the deadline for filing Form 8939 (or by February 16, 2012). The Directive does not address whether this same 30-day deadline applies if the Personal Representative has no federal Form 8939 filing requirement. However, conversations with the Department of Revenue have indicated that this 30-day delivery requirement does apply for Massachusetts purposes regardless of whether the Personal Representative has a federal Form 8939 filing requirement.
As discussed here, the Boston Bar Association has promulgated and continues to support Bill # H2559 (referenced in Footnote 2 of the final Directive), which would alleviate the need for the aforementioned Directive, would provide certainty regarding cost basis of assets received from a decedent after 2009 for Massachusetts purposes, and would conform Massachusetts practice in this regard with the federal policy, and with the historic Massachusetts practice, of subjecting assets passing at death to either estate tax or capital gains tax, but not both.
H2559 is currently before the Joint Committee on Revenue. Please consider contacting your representatives and asking them (1) to urge the members of the Joint Committee to report H2559 favorably out of the committee and (2) to vote for it. The phone numbers and email addresses of the members of the Joint Committee on Revenue may be found here.
To identify your representatives, and for contact information, please click here.
A template letter for your consideration may be found here.
In Purcell v. Landers, Case No. 10-P-1757, 2011 Mass. App. Unpub. LEXIS 1251 (Dec. 6, 2011), a decision issued pursuant to Rule 1:28, the Appeals Court affirmed in part and reversed and remanded in part the probate court’s disposition of a will contest.
The decedent had one adopted daughter, the plaintiff Lisa Purcell, and they were described as “estranged” from each other. The decedent was afraid of the plaintiff, who had admitted to sufficient facts and a guilty finding of threatening to commit a crime against the decedent, apparently for threatening to burn down his house with him in it, and whom the decedent said had taken $26,000 from him during his lifetime.
In his will, the decedent left only $1 to the plaintiff, leaving the rest to his friend, the defendant Richard Landers, whom the decedent also named as executor. The defendant was described as the decedent’s “one true friend” for many years both before and after the death of the decedent’s wife in 1984.
The plaintiff objected to the allowance of the will and to the defendant’s appointment as executor, in part because it was the defendant who had introduced the decedent to his estate planning lawyer and drove the decedent to the lawyer’s office for the preparation of the will. After a trial, the probate court struck the plaintiff’s objections and allowed the will for probate, finding that the defendant, rather than the plaintiff, had become the natural object of the decedent’s bounty.
The trust instrument expressly prohibited the grantor from serving as trustee.
The grantor’s power to substitute assets of equivalent value was held in a nonfiduciary capacity.
Under the terms of the trust in this particular case, the assets transferred to the trust must be equivalent in value to the insurance policies that the grantor will receive.
The trustee had a fiduciary obligation to ensure that substituted assets were of equivalent value ensuring that the trustee cannot act in a manner that will deplete trust assets or increase the grantor’s net worth.
Because the trustee had the fiduciary duty to treat the beneficiaries impartially and the trustee had the power to re-invest assets, a substitution of assets would not work to shift assets among the beneficiaries.
This Ruling is taxpayer friendly and provides useful guidance when advising clients on the types of powers a grantor may retain. Practitioners should consult the Ruling itself for the detailed legal analysis the IRS conducted in reaching this result.
The Boston Bar Association Trusts & Estates Section Blog provides information as a service to its users and BBA members. Neither the Trusts & Estates Section nor the Boston Bar Association are a law firm and do not represent clients in any way. Although the information on this site is about legal issues and informational services it is not legal advice. Use of this blog does not in any way create a lawyer-client relationship. If you need a lawyer, the Boston Bar Association Lawyer Referral Service can refer you to a qualified attorney. http://www.bostonbarlawyer.org or call 617-742-0625.
On December 30, 2011, Governor Patrick signed into law a bill that extends the effective date of the Massachusetts Uniform Probate Code, G.L. c. 190B (MUPC ) — as it applies to estates and trusts — to March 31, 2012. The MUPC was set to take effect on January 2, 2012. The Boston Bar Association has been advocating for the implementation of the MUPC for more than twenty years and will continue to work with the Legislature and the Probate and Family Court to ensure that these important provisions become law.
“This landmark piece of legislation improves what was an unacceptable situation concerning the appointment and conduct of guardians,” said BBA President Lisa C. Goodheart. “The MUPC will also simplify the probate process for families and our courts while expediting the process for administering estates.” The MUPC facilitates the appointments of executors and also provides options for choosing informal or formal procedures to open and close probate matters.
The MUPC became effective for guardianship on July 1, 2009. Still under consideration by the Legislature is a bill establishing a uniform trust code, containing technical corrections to the MUPC, and granting the Probate and Family Court statutory authority to collect fees under the MUPC.
The Probate and Family Court’s statement on the delay, including amended Standing Order 5-11 and revised forms and instructions, can be found here.
Today the House passed a bill extending the effective date of the Massachusetts Uniform Probate Code (MUPC) to March 31, 2012. The extension bill awaits action by the Senate. The MUPC was set to go in effect on Jan. 2, 2012.
Still under consideration by the Legislature is a bill establishing a uniform trust code, containing certain technical corrections to the MUPC, and granting the Probate and Family Court statutory authority to collect fees under the MUPC.
Both organizations look forward to continued work with the Legislature and the Court to ensure that these important provisions become law.
The Massachusetts Probate and Family Court has begun to publish the new MUPC probate forms on a new page on its website here. At this time, more than thirty forms have been released, including forms for opening an informal probate, opening a formal probate, closing probate, and creating an inventory and accounts. The Court will publish additional MUPC forms as they become available and plans to remove current probate forms (those effective until January 2, 2012) from its website in January 2012.
The Court has also begun to publish certain instructional materials that have been used at recent trainings on its website here.
On December 15, 2011, the Massachusetts Senate passed S.2094, a combined bill containing both the Massachusetts Uniform Trust Code and the technical corrections to the Massachusetts Uniform Probate Code formerly in S.704. Section 38 of S.2094 also includes a new probate court fee schedule to correspond with the new rules.
Although the House passed a substantially identical version of the Massachusetts Uniform Trust Code (H.3756) on November 2, 2011, because S.2094 includes the MUPC technical corrections and the fee schedule, it has now been sent back to the House. We will keep you informed of any further developments.
Kelly Aylward, Esq., Bove & Langa, P.C.
As discussed here, on November 1, 2011, the Massachusetts Uniform Trust Code (“MUTC”) (now H.3780/S.2034) was passed by the House and was referred to the Senate Ways and Means Committee. The next step is for the Senate Ways and Means Committee to report the bill out for a vote by the Senate. Because the Senate is now in “informal session”, which is only open for the next three weeks, a unanimous vote by the Senate is required for this bill to pass in time to become effective on January 2, 1012 [the date that the trust provisions of the Massachusetts Uniform Probate Code (“MUPC”) become effective]. This is where you can help.
Please contact your representatives in the Senate and urge them to send the MUTC to the Governor’s desk. As discussed here, it is vital that the MUTC pass in time to become effective on the same day as the trust provisions of the MUPC to avoid a scenario whereby courts, practitioners, trustees, and beneficiaries must grapple with multiple disparate bodies of trust law in succession.
In addition, the technical corrections to the MUPC (bill S.704) is still before the Joint Committee on the Judiciary and has not passed the House or the Senate. We ask that you also urge your representatives to encourage the passage of the technical corrections.
As the Boston Bar Association continues to work closely with representatives and senators to encourage the passage of both the MUTC and the technical corrections to the MUPC, we would appreciate your assistance in contacting your representatives and senators to move this process along as quickly as possible. We have attached an updated template letter here for your consideration.
To identify your representatives, and for contact information, please visit here.
In Cohen v. Attorney General, Case No. 11-11500-NMG, 2011 U.S. Dist. LEXIS 120336 (D. Mass. Oct. 18,2011), the federal district court dismissed an action brought by Jillian Cohen, purporting to act in her capacity as “Full Statutory Administratrix” of the estate of the decedent, effectively seeking federal court review of two state court dismissals of her previous suit for alleged negligence, products liability and wrongful death.

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