Court Opinion

ID: 2963863
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:16:24.622057+00
Date Added: 2024-06-11T11:42:47.526370
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 95-1631

                              PAUL F. MARKHAM, TRUSTEE,

                                      Plaintiff,

                                          v.

              CLAIRE M. FAY, AS TRUSTEE OF HIGHLAND AVENUE NURSING HOME
                       TRUST, PARKER HILL NURSING HOME TRUST, 
                        AND GREEN PASTURES NURSING HOME TRUST,

                                Defendant, Appellant,

                                         and

                                    UNITED STATES,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Robert B. Collings, U.S. Magistrate Judge]
                                             _____________________
                                 ____________________

                                        Before

                                Torruella, Chief Judge,
                                           ___________
                            Bownes, Senior Circuit Judge,
                                    ____________________
                              and Stahl, Circuit Judge.
                                         _____________
                                 ____________________

               Richard H. Gens for appellant.
               _______________
               Annette M.  Wietecha, Attorney,  with whom Donald  K. Stern,
               ____________________                       ________________
          United States Attorney, Of Counsel, Loretta C. Argrett, Assistant
                                              __________________
          Attorney General, Gary R. Allen, Attorney, and Jonathan S. Cohen,
                            _____________                _________________
          Attorney, Tax Division, United States Department of Justice, were
          on brief for appellee.

                                 ____________________

                                   February 7, 1996
                                 ____________________

                      BOWNES, Senior Circuit Judge.  Appellant  Claire M.
                      BOWNES, Senior Circuit Judge.
                              ____________________

            Fay  ("Fay"), in  her capacity  as  trustee of  three trusts,

            appeals the magistrate judge's ruling that a federal tax lien

            upon her individual property extends to the entire assets  of

            the trusts.   Fay  contends that  the magistrate  judge erred

            because the  property of the  trusts would not  be considered

            her own  under Massachusetts  law.   Fay also raises  federal

            statutory and constitutional issues, contending that Appellee

            Internal Revenue Service ("IRS")  does not have a valid  lien

            upon  the  trust property  because it  failed to  comply with

            statutory notice  and  limitations  requirements  as  to  the

            trusts,   and  also   that  the   trust   beneficiaries  were

            indispensable parties  who were not joined  and were deprived

            of property without  due process of law.  We  hold that there

            was  no  statutory  or  constitutional  error  and  that  the

            magistrate judge correctly held that the lien attached to the

            entire property of the Green Pastures and Parker Hill Nursing

            Home Trusts.  We also hold that the magistrate judge erred in

            holding  that the lien attached to the entire property of the

            Highland Avenue Nursing Home Trust.  Thus, we affirm in part,

            reverse in part, and remand for a new judgment.

            I.  BACKGROUND AND PROCEDURAL HISTORY
                _________________________________

                      In  a published opinion,  the magistrate judge made

            extensive  findings of fact, Markham v. Fay, 884 F. Supp. 594
                                         ______________

            (D. Mass. 1995), none of which are in dispute in this appeal.

                                         -2-
                                          2

            We recount those necessary  to provide context to  the issues

            before us.  

                      During the 1960s and  1970s, Fay and others created

            a  number of legal entities  for the purpose,  inter alia, of
                                                           _____ ____

            owning and  operating nursing homes in  Massachusetts.  Three

            of  those entities -- the Green  Pastures Nursing Home Trust,

            the Parker Hill  Nursing Home Trust  and the Highland  Avenue

            Nursing  Home  Trust --  are involved  in  this appeal.   Fay

            created the trusts in  1974, conveying to herself as  trustee

            of each trust the nursing home for which the trust was named.

            A  fourth   entity,   Regina   Nursing   Home,   Inc.   ("the

            corporation"),  was incorporated  in  1961.   Fay became  its

            president and sole stockholder in 1967, then assigned all  of

            her  stock to  her  sister Theresa  Dzialo (Dzialo)  sometime

            during the  1970s.  The  corporation owned the  Chester Manor

            Nursing Home.  At no time were the trusts and the corporation

            organized or operated as one entity, and each owned different

            property.    

                      In  June of 1976, Fay, as trustee of the trusts and

            president  of the  corporation, sold  the Parker  Hill, Green

            Pastures, Highland Avenue and  Chester Manor Nursing Homes to

            trusts owned  by Louis  Almeida ("Almeida"), in  exchange for

            mortgages  and  other  consideration.    Almeida   filed  for

            bankruptcy in  1978.  By then,  the only assets  owned by the

            trusts and  the corporation  were the mortgages,  and Almeida

                                         -3-
                                          3

            had  defaulted on them.   On October 2,  1990, the bankruptcy

            court  awarded the  trusts  and the  corporation, as  secured

            creditors, the proceeds from the bankruptcy trustee's sale of

            the nursing homes, amounting to $67,809.89.    

                      On  October 10,  1990, the  IRS filed  a derivative

            claim with the bankruptcy court "for the purpose of obtaining

            any dividend which may become payable to Claire M. Fay."  The

            IRS's claim  was premised on Fay's  individual tax liability.

            In  1979, in  view  of  Almeida's  bankruptcy,  the  IRS  had

            assessed Fay individually as  a "responsible person" under 26

            U.S.C.    6671 and 6672 for income and F.I.C.A. taxes Almeida

            failed to pay for the nursing homes' employees during the tax

            years 1976 through 1978.1   On October 31, 1979, IRS  filed a

            notice  of  federal  tax  lien for  $200,213.45  against  Fay

            individually, and refiled it  on January 27, 1986.   In 1984,

            the  IRS sued  Fay individually,  and on  December  30, 1990,

            judgment   was  entered   against  her   in  the   amount  of

            $699,142.21, including penalties and interest.

                      On  October  31, 1990,  the  IRS  delivered to  the

            bankruptcy trustee (but  not to the corporation) a  notice of

            levy on the corporation  as alter ego and/or nominee  of Fay.

            The IRS did not  file any liens, lawsuits or  notices thereof

                                
            ____________________

            1.  Fay apparently  continued to be involved  in managing the
            nursing homes after selling them to Almeida.  The efficacy of
            the assessment against her is not before us in this appeal.

                                         -4-
                                          4

            against  the trusts,  Fay as  trustee of  the trusts,  or the

            beneficiaries of the trusts.  

                      On February 12, 1991, Paul F. Markham  ("Markham"),

            the bankruptcy trustee who  held the proceeds of the  sale of

            the   nursing  homes,   filed  an   interpleader   action  in

            Massachusetts Superior  Court seeking a determination  of the

            rights  of  the  various  claimants to  the  interpled  fund.

            Markham named  as defendants Fay individually  and as trustee

            of the  trusts, the corporation,  the United States,  and two

            attorneys seeking  payment for  litigating the claims  of the

            trusts and the  corporation before the bankruptcy court.   On

            March 14, 1991, the IRS removed the case to the United States

            District  Court for the District of Massachusetts.  On May 5,

            1993,  the court  denied  summary judgment  to  the IRS,  the

            corporation and the trusts, granted summary judgment in favor

            of the  attorneys (awarding them $16,970),  and then referred

            the case to the magistrate  judge for all purposes  including

            trial and entry of judgment.

                      After a bench trial, the magistrate judge issued an

            opinion,  holding that  the IRS  was  entitled to  the entire

            proceeds of the sale  of the Parker Hill, Green  Pastures and

            Highland  Avenue Nursing  Homes because  Fay had  reserved to

            herself  such significant  powers  in the  trusts that  their

            assets would  be considered her own  under Massachusetts law.

            884 F.  Supp. at 607,  609.   The magistrate judge  also held

                                         -5-
                                          5

            that  the government had failed  to prove that  the trusts or

            the corporation were Fay's alter egos, and found that the IRS

            had not established that Fay used the trusts for a fraudulent

            purpose  or  for her  own individual  benefit.   Id.  at 604.
                                                             __

            Judgment  was entered for the IRS in the amount of $27,732.85

            plus 55% of the accumulated interest, and for the corporation

            in  the  amount of  $23,107.04  plus 45%  of  the accumulated

            interest.2   Fay,  in her  capacity as  trustee of  the three

            trusts, then filed this appeal.  

                      Before we  proceed to the legal  issues, we clarify

            the present status of the trusts and the proceeds of the sale

            of  the nursing homes.  Since  1978, the trusts have not held

            any property  other than the mortgages on  the nursing homes,

            and have  not engaged  in any  transaction or  business other

            than pursuing their claims against  Almeida's bankrupt estate

            and  defending  the  bankruptcy  court's  award.     Although

            dormant, the trusts continue  to exist.  They were in  no way

            terminated by  the bankruptcy  trustee's sale of  the nursing

            homes.    Rather,  the  bankruptcy  court  awarded  the  sale

            proceeds  to the trusts in satisfaction of the mortgages.  We

            refer to  the sale proceeds  as trust property,  although not

                                
            ____________________

            2.  After  the attorneys  were paid  at the  summary judgment
            stage, $50,839.89 plus  accumulated interest  remained.   The
            parties stipulated at trial that the fund was attributable as
            follows:  $23,107.04  to   the  corporation;  $16,046.63   to
            Highland  Avenue Nursing  Home Trust;   $11,246.12  to Parker
            Hill  Nursing  Home  Trust;  and $440.10  to  Green  Pastures
            Nursing Home Trust.

                                         -6-
                                          6

            yet  paid  to the  trusts, because  the proceeds  will become

            trust property unless paid to the IRS.

                                         -7-
                                          7

            II.  STATUTORY AND CONSTITUTIONAL ISSUES
                 ___________________________________

                      Fay first  contends that  the IRS does  not have  a

            valid  lien against  the trust  property because  it did  not

            comply with  statutory  notice  and  statute  of  limitations

            requirements  as to  the  trusts.    It  gave  no  notice  of

            assessment as to the trust property in 1979, did not join the

            trusts,  Fay  as  trustee,  or  the  trust  beneficiaries  as

            defendants in its 1984 suit against Fay individually, and did

            not  proceed  against  them  by  separate  suit,  assessment,

            demand,  lien or levy.  Second, Fay contends that because the

            IRS sought  in the  interpleader action to  collect from  the

            trust property  as such, the beneficiaries were indispensable

            parties  who were required to  be joined in  their own right.

            Finally, Fay argues that because the beneficiaries were given

            no  opportunity to  appear  and defend  their  rights in  the

            interpleader action, the  magistrate judge's ruling  deprived

            them of property without due process of law. 

                      The IRS  responds first that  it is only  Fay's own

            property  from which it seeks  to collect and  all notice and

            limitations requirements were  met with respect to her.   The

            IRS concedes that if  it had sought to hold  the trustee, the

            trusts  or  the  beneficiaries  personally  liable  as  Fay's

            transferees,  it would  have  had to  institute a  collection

            action  directly  against  them  within six  years  from  the

            assessment of the tax.  See United States v. Updike, 281 U.S.
                                    ___ _______________________

                                         -8-
                                          8

            489, 493 (1930); 26 U.S.C.   6901.  The IRS, however, asserts

            that  it sought  to collect  the taxes  out of  property that

            would  be  considered  Fay's  own  under  Massachusetts  law.

            Notice and  limitations  requirements  with  respect  to  the

            trusts therefore  were not implicated.   As to  Fay's joinder

            and  due  process  arguments,  the    IRS  responds that  the

            bankruptcy trustee  named Fay as trustee  in the interpleader

            action,   she   has   represented   the  interests   of   the

            beneficiaries throughout this litigation, and at no time have

            the beneficiaries as such  sought to intervene.  Furthermore,

            the IRS argues, the beneficiaries' exclusive remedy is a suit

            for wrongful  levy brought pursuant  to 26 U.S.C.    7426(a),

            which  is now  time-barred because no  such suit  was brought

            within nine months  from the date of levy, as  required by 26

            U.S.C.   6532(c).

                      Although  the  magistrate judge  did  not precisely

            resolve  these  issues,3  we  will  review  them de  novo  as
                                                             __  ____

            matters of federal law.  Horton Dairy, Inc. v. United States,
                                     ___________________________________

            986  F.2d 286, 290 (8th Cir. 1993).   First, we must untangle

                                
            ____________________

            3.  The  magistrate  judge stated  at  the  beginning of  his
            analysis that the separate structures  of the trusts could be
            disregarded for notice and statute of limitations purposes if
            they  were Fay's  alter egos, but  went on to  hold that they
            were not  Fay's alter egos,  and never addressed  whether the
            trusts  were  required to  be  treated  separately under  the
            distinct  theory that  prevailed --  that the  trust property
            would  be considered Fay's own under  Massachusetts law.  The
            magistrate judge did not mention Fay's joinder or due process
            arguments.

                                         -9-
                                          9

            the web of  statutory and procedural requirements  implicated

            in  this phase  of  Fay's  appeal.   Once  the IRS  makes  an

            assessment of  a taxpayer's liability,  it has sixty  days in

            which  to "give notice to  each person liable  for the unpaid

            tax, stating the  amount and demanding payment  thereof."  26

            U.S.C.   6303(a).   Once notice and demand are given  and the

            tax  goes  unpaid,  a lien  in  favor  of  the United  States

            automatically  arises  "upon  all  property   and  rights  to

            property,  whether  real  or  personal,  belonging   to  such

            person."  26  U.S.C.   6321.   Whether and  to what extent  a

            particular  piece  of property  constitutes  property of  the

            taxpayer to which a federal tax lien can attach is a question

            of state law.  Aquilino  v. United States, 363 U.S.  509, 512
                           __________________________

            (1960).  The  lien arises at the time the  assessment is made

            and  continues until  the liability  is satisfied  or becomes

            unenforceable  by lapse of time.  26  U.S.C.   6322.  The IRS

            may collect the  tax by levy or  by bringing a proceeding  in

            court, which according to the pre-1990 version of 26 U.S.C.  

            6502  applicable in this case, must be done "within six years

            after  the  assessment of  the tax."4    26 U.S.C.    6502(a)

            (1988).  A lien  becomes unenforceable by lapse of  time upon

            expiration  of  the  six-year  statute   of  limitations  for

            collection,  but if  the  government brings  suit within  six

                                
            ____________________

            4.  The statute was amended in 1990 to extend the limitations
            period to ten years.  26 U.S.C.   6502(a) (1994).

                                         -10-
                                          10

            years from assessment and  receives a judgment in  its favor,

            the life of the lien is extended indefinitely.  See Rodriguez
                                                            ___ _________

            v. Escambron Dev. Corp., 740 F.2d 92, 94 n.3 (1st Cir. 1984).
            _______________________

                      There  is no  dispute that the  IRS assessed  a tax

            against Fay  individually in  1979, that  it gave  notice and

            demand to her within sixty days, that  a lien dating from the

            assessment arose against  all of Fay's property and rights to

            property,  that the IRS  timely filed a  civil action against

            Fay individually in 1984,  that it refiled the notice  of tax

            lien  in 1986, and that it obtained a judgment in December of

            1990 that extended  the life  of the lien  on Fay's  property

            indefinitely.       That  brings us  to the  IRS's collection

            efforts beginning with the derivative claim in the bankruptcy

            court in   October of  1990 and leading  to the  interpleader

            action below.   As stated above, the  IRS may collect by levy

            or  by a  proceeding in  court.   26 U.S.C.    6502(a).   The

            briefs  are unhelpful  (at best)  as to  which route  the IRS

            took.   The  IRS  indicates  that  it  levied  on  the  trust

            property,  but  the  IRS  may  collect  by  levy  only  after

            notifying  the taxpayer in  writing of its  intention to make

            such levy.  26 U.S.C.    6331(a), (b), (d)(1).  The notice of

            levy  upon  the  corporation  as  Fay's  alter  ego  did  not

            constitute  notice of  levy  on the  trust property  because,

            inter  alia,  the  trusts   and  the  corporation  each  held
            _____  ____

            different  property.  Because it has never notified Fay of an

                                         -11-
                                          11

            intention  to levy on the  trust property, there  has been no

            levy.  

                      Other  than  by levy,  the  IRS  can collect  by  a

            proceeding in court, either by bringing an action pursuant to

            26 U.S.C.    7403, or by simply suing for the amount owed and

            then exercising "the usual rights of a judgment  creditor" to

            enforce any judgment obtained.  United States v. Rodgers, 461
                                            ________________________

            U.S. 677,  682 (1983).  This is not a section 7403 action and

            neither party contends  that it  is.5  The  IRS is  therefore

            exercising  the  usual rights  of  a judgment  creditor.   It

            asserts (inconsistently with its indication that it levied on

            the  trust  property)  that   the  Federal  Debt   Collection

            Procedure Act of  1990 (FDCPA),  28 U.S.C.    3001, et  seq.,
                                                                __  ___

            governs  the  interpleader  proceedings,  and  Fay  does  not

            contend otherwise.   Fay's tax  indebtedness is  a "debt"  as

            defined in the  FDCPA because it is  "an amount owing  to the

            United  States  on account  of [an]  . .  . assessment."   28

            U.S.C.    3002(3)(B).    Except to  the  extent that  another

            federal law specifies procedures for recovering on a judgment

            for a debt arising under such law, the FDCPA is the exclusive

            civil procedure for the government to recover a judgment on a

                                
            ____________________

            5.  The government has the right in a section 7403 proceeding
            to  seek a  forced sale  of the  entire property  in  which a
            delinquent  taxpayer has  an  interest  even  where  innocent
            others also have an  interest in the property.   This special
            privilege  arises from  the  express terms  of section  7403,
            Rodgers,  461  U.S.  at 697,  and  is  not  available to  the
            _______
            government here.   

                                         -12-
                                          12

            debt.   28 U.S.C.   3001(a),  (b).  The tax  code (from which

            the debt arose)  does specify procedures for recovering  on a

            judgment by levy,  26 U.S.C.   6331, and by  filing an action

            in a federal  district court to  enforce a lien, 26  U.S.C.  

            7403, but does not  contain specific procedures for otherwise

            recovering on a judgment, for example by filing  a derivative

            claim in bankruptcy court and litigating against the taxpayer

            in a  resulting  interpleader action,  as the  IRS did  here.

            Thus, the procedures of the FDCPA appropriately control.  I f

            the magistrate judge was correct that  the entire property of

            each trust would be  considered Fay's own under Massachusetts

            law, then the  IRS had a valid lien on  that property that it

            could  seek  to  enforce  in  the  interpleader  action.   By

            notifying  Fay  in 1979,  the  IRS  complied with  the  plain

            language of  section 6303(a)  requiring notice and  demand on

            the only "person  liable."   The IRS also  complied with  the

            statute  of limitations by suing Fay in 1984 within six years

            of the tax assessment in 1979 as required by section 6502(a).

            The  judgment obtained in 1990 extended the life of the lien,

            so  that  the IRS's  effort to  enforce  the judgment  in the

            interpleader  action was  timely.   Fay argues  that the  IRS

            failed to establish  a nexus  between the taxes  owed by  her

            individually  and the  proceeds of  the sale  of the  nursing

            homes,  but the IRS does  not contend that  the tax liability

            was  incurred by the trusts  such that the  judgment could be

                                         -13-
                                          13

            satisfied directly from the entire  trust property regardless

            of whether it belonged to  Fay.  Rather, the IRS has  a valid

            lien upon  Fay's individual  property and rights  to property

            that  it may  enforce out  of any  trust property  that under

            Massachusetts law belongs to Fay, even though the claim arose

            independently of the trusts.  

                      As  to whether the beneficiaries were indispensable

            parties  who were deprived of  an opportunity to  be heard in

            their  own right,  we begin  by rejecting the  IRS's argument

            that the beneficiaries'  only remedy is  a suit for  wrongful

            levy under 26 U.S.C.   7426(a).  Third parties are limited to

            that  remedy  only  when  the government  proceeds  by  levy,

            Rodgers  461 U.S. at 682-83,  695-96, which it  has not done.
            _______

            Rather, whether the beneficiaries  were required to be joined

            is governed  by Fed. R. Civ.  P. 19. See 28  U.S.C.   3003(f)
                                                 ___

            (Federal Rules  of Civil  Procedure apply in  FDCPA actions).

            That  rule provides in relevant part that a person subject to

            service  of process  and whose  joinder will not  deprive the

            court of subject  matter jurisdiction "shall  be joined as  a

            party  in the action if  . . . the person  claims an interest

            relating to the subject of the action and is so situated that

            the disposition of the action in the person's absence may (i)

            as a practical  matter impair or impede  the person's ability

                                         -14-
                                          14

            to protect  that interest .  . .  ."6   Courts applying  this

            rule generally have held that beneficiaries are indispensable

            parties in actions  like this to collect a tax  or other debt

            from  the trust  corpus, see  Tick v.  Cohen, 787  F.2d 1490,
                                     ___  ______________

            1495-96  (11th Cir.  1986); United  States v.  Fried, 183  F.
                                        ________________________

            Supp. 371, 373 (E.D.N.Y. 1960), and actions analogous to this

            seeking  to terminate a trust.   See Hansen  v. Peoples Bank,
                                             ___ _______________________

            594 F.2d 1149 (7th Cir. 1979).  "The general rule is, that in

            suits respecting trust-property, brought either by or against

            the trustees, the cestuis  que trust as well as  the trustees
                              _______  ___ _____

            are necessary parties."   Carey  v. Brown, 92  U.S. 171,  172
                                      _______________

            (1875);  see also Stevens v.  Loomis, 334 F.2d  775, 777 (1st
                     ___ ____ __________________

            Cir.  1964).   An  exception  to the  general  rule, however,

            exists   when  the  trustee   represents  the  beneficiaries'

            interests fully  and without conflict.   3A  James W.  Moore,

            Moore's Federal Practice   19.08 at 175-76 (2d ed. 1985).  

                      The bankruptcy trustee joined Fay both individually

            and as trustee in the interpleader action.  Fay had the  duty

            as trustee under the three declarations of trust to represent

            the beneficiaries' interests in any lawsuit.  While, at least

                                
            ____________________

            6.  In  contrast, in an action  to enforce a  lien or subject
            property  to payment of tax  brought pursuant to  26 U.S.C.  
            7403,  "[a]ll  persons .  . .  claiming  any interest  in the
            property  involved" are  required  to be  made  parties.   26
            U.S.C.    7403(b);  United States v. Big  Value Supermarkets,
                                _________________________________________
            Inc., 898 F.2d 493,  496 (6th Cir. 1990) (section  7403(b) is
            ____
            mandatory);  United States  v. Overman,  424 F.2d  1142, 1146
                         _________________________
            (9th Cir. 1970) (same).

                                         -15-
                                          15

            on  the surface,  the  fact that  the  trustee in  this  case

            incurred the debt that the trust property might be reached to

            pay indicates a potential conflict  between Fay and the other

            beneficiaries,  all  signs  are  that  Fay  represented  them

            zealously and  without conflict.   Fay  has not  asserted any

            claim  to the  fund  in her  individual right  throughout the

            course  of  this litigation,  but  has appeared  only  in her

            capacity as trustee.   Moreover,  as settlor and  one of  the

            beneficiaries of the trust,  Fay's interest in protecting the

            trust property would seem to be at least as strong as that of

            the other beneficiaries.   The beneficiaries as such  did not

            seek to intervene at any point when the district court or the

            magistrate judge  could have joined them as  parties in their

            own  right.  This  is not to  say that the  issue was waived,

            Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 559 (5th
            ____________________________________

            Cir. 1985) (failure  to raise  below the issue  of whether  a

            party should have been joined does not result in waiver), but

            it does  indicate that the beneficiaries did not perceive any

            failure on Fay's  part to  represent their  interests at  the

            time.   And  on appeal,  Fay fails  to describe  any conflict

            between her  interests and those of  the other beneficiaries,

            any way in which their interests were not represented, or any

            way in  which the litigation  might have gone  differently if

            they  had been  joined.  As  will be seen,  resolution of the

            core issue in the case -- whether the property of  any of the

                                         -16-
                                          16

            trusts would be considered  Fay's own under Massachusetts law

            -- depended  factually  only on  the  language of  the  trust

            instruments, documents that were before the magistrate  judge

            and are before  us.  Although  in an abundance of  caution it

            may  have been  better  for the  beneficiaries  to have  been

            joined, as  it turned  out, Fay faithfully  represented their

            interests.  We therefore hold that the beneficiaries were not

            indispensable parties.   The same considerations defeat Fay's

            argument that  the  beneficiaries were  deprived of  property

            without  due   process  of  law.     Moreover,  assuming  the

            magistrate  judge  was  right,  the  beneficiaries  were  not

            deprived of their own property.

            III.  WAS  THE TRUST PROPERTY  FAY'S OWN UNDER  MASSACHUSETTS
                  _______________________________________________________

            LAW?      When  the  IRS assessed  taxes  owed  by Fay  as  a
            ____

            "responsible person" in 1979, a federal tax lien  arose "upon

            all  property  and  rights   to  property,  whether  real  or

            personal, belonging to" Fay.   26 U.S.C.    6321, 6322.   The

            tax  code "creates  no  property rights  but merely  attaches

            consequences,  federally defined,  to  rights  created  under

            state law."  United States  v. Bess, 357 U.S. 51, 55  (1958).
                         ______________________

            Whether and to what extent Fay's powers, interests and rights

            in the trusts  constitute property to  which the federal  tax

            lien could attach is a question of state law.   Aquilino, 363
                                                            ________

            U.S. at 512.    

                                         -17-
                                          17

                      We review de  novo the issue  of whether the  trust
                                __  ____

            instruments  gave Fay  such extensive  powers over  the trust

            property that  it was in  effect her own  under Massachusetts

            law.   Salve  Regina College  v. Russell,  499 U.S.  225, 231
                   _________________________________

            (1991); Losacco v. F.D.  Rich Constr. Co., 992 F.2d  382, 384
                    _________________________________

            (1st  Cir. 1993).   In  doing so,  we will  take care  not to

            extend state law beyond its well-marked boundaries in an area

            such  as trust law  that is quintessentially  the province of

            state courts.

                      Initially, we clarify that  it was not improper for

            Fay,  the settlor of the trusts, to designate herself as both

            sole trustee and one of the trusts' beneficiaries.  Under the

            common  law of  trusts, "trustees may  be included  among the

            beneficiaries  of a trust."   Mahoney  v.  Board of Trustees,
                                          ______________________________

            973  F.2d  968,  971  (1st  Cir.  1992),  citing  Restatement

            (Second)  of Trusts    99, 115 (1959); William F. Fratcher, 2

            Scott  on Trusts,     99.2, 115 (4th  ed. 1987).   And a sole

            trustee who  is also the  settlor may be  one of two  or more

            beneficiaries. Sullivan v. Burkin, 460 N.E.2d 572, 575 (Mass.
                           __________________

            1984); Ascher v. Cohen, 131 N.E.2d 198, 199-200 (Mass. 1956);
                   _______________

            Restatement (Second) of Trusts   100.  

                      When a trustee is also a beneficiary, she holds the

            legal title to the entire trust property in trust  for all of

            the  beneficiaries (including  herself), has  a duty  to deal

            with  it for the benefit  of the beneficiaries,  and does not

                                         -18-
                                          18

            hold  legal title to any of  the trust property free of trust

            to  use as she  pleases.  There  is no partial  merger of the

            legal  and  equitable  interests.    Restatement  (Second) of

            Trusts   99  cmt. b; 2  Scott on Trusts    99.3.   It follows

            that     a    creditor     generally    cannot     reach    a

            trustee/beneficiary's  interest in  a trust,  such as  these,

            with a spendthrift provision.  Restatement (Second) of Trusts

              99 cmt. b.  

                      When  a beneficiary is  also the  settlor, however,

            she cannot keep property beyond the reach of her creditors by

            placing it in  a spendthrift trust for her own  benefit.  See
                                                                      ___

            Merchants Nat'l Bank v. Morrissey, 109 N.E.2d 821, 823 (Mass.
            _________________________________

            1953);  Forbes v.  Snow, 140 N.E.  418, 419 (Mass.  1923).  A
                    _______________

            settlor/beneficiary's  creditors  therefore  can  reach  "the

            maximum amount which the trustee under the terms of the trust

            could  pay to  him or  apply for  his benefit."   Restatement

            (Second)   156(2), quoted  in Ware v. Gulda, 117  N.E.2d 137,
                               ______  __ _____________

            138 (Mass. 1954).   This, of course,  does not mean that  the

            interest  of  any other  beneficiary  may be  reached  by the

            settlor/beneficiary's creditors.   2  Scott on Trusts    114.

            As  a matter  of  federal law,  a  tax lien  extends  only to

            property or  rights to  property belonging to  the delinquent

            taxpayer,  and not  to property  belonging to  innocent third

            parties.  Rodgers, 461 U.S. at  690.  Whether the tax lien in
                      _______

            this  case  attaches to  the  entire property  of  each trust

                                         -19-
                                          19

            depends on whether the  trust instruments give Fay  the power

            to eliminate the other beneficiaries' interests.

                      A.   The Parker Hill and Green Pastures Nursing
                           __________________________________________
                           Home Trusts
                           ___________

                      On January 21, 1974, Fay created the Green Pastures

            and  Parker Hill  Nursing Home  Trusts under  declarations of

            trust  whose terms were identical except for the names of the

            trusts and the identity  of their assets.  Fay  named herself

            sole  trustee   and  conveyed  to  herself   as  trustee  the

            respective nursing homes.  Fay named herself and her two sons

            as  the beneficiaries  of  each trust,  all in  equal shares,

            until  the trusts terminate.7  She named her sister Dzialo as

            the remainder beneficiary of  each trust -- upon termination,

            the  trust   property  and  undistributed   income  were   to

            immediately vest in her free of trust.  

                      The  magistrate   judge  ruled  that  the  IRS  was

            entitled  to  reach that  part  of  the interpled  fund  that

            represents the  assets of the Green Pastures  and Parker Hill

            Nursing  Home Trusts,  based  on Fay's  "copious" rights  and

            powers as settlor, sole trustee and one of  the beneficiaries

            of  the trusts, and her  reserved right as  settlor to alter,

                                
            ____________________

            7.  The  trusts  are  to  terminate at  the  earliest  of the
            following:   twenty  years  from  the  date the  trusts  were
            declared;  Fay's  election   to  terminate;  her  death;   or
            appointment  of a  guardian of  her or  a conservator  of her
            property.  Although  twenty years have  now passed since  Fay
            created the trusts in 1974, we assume the  trusts' continuing
            existence because  our point  of reference is  the date  this
            litigation began.

                                         -20-
                                          20

            amend or revoke  the trusts, although  Fay has not  exercised

            those powers or  otherwise used the trusts for  her exclusive

            benefit.  884 F. Supp. at 607.  

                      Traditionally, Massachusetts has given  full effect

            to  inter  vivos  trusts,  regarding their  assets  as  trust

            property  rather than that of  the settlor in  spite of broad

            powers  reserved to him or  her, at least  while those powers

            remain  unexercised.  See  National Shawmut  Bank v.  Joy, 53
                                  ___  ______________________________

            N.E.2d 113,  122-25 (Mass. 1944); Guthrie v. Canty, 53 N.E.2d
                                              ________________

            1009,  1010 (Mass. 1944).  But another line of cases has more

            recently emerged from the Massachusetts Court of Appeals.  In

            State Street Bank  and Trust  Co. v. Reiser,  389 N.E.2d  768
            ___________________________________________

            (Mass.  App.  Ct.  1979),  the court  broke  with  tradition,

            holding  that a  settlor/beneficiary's creditors  could reach

            trust assets upon his  death where he had reserved  powers to

            amend or revoke  and to direct  the disposition of  principal

            and  income  during  his  lifetime, even  though  the  powers

            remained  unexercised at  the  time of  his  death, and  even

            though  the remainder  beneficiaries'  rights  in  the  trust

            vested  upon   his  death   because  there  was   no  further

            possibility that he could  exercise his powers.  Id.  at 770-
                                                             __

            71.   The court emphasized that the settlor's powers gave him

            the right  until his  death to  destroy all  other beneficial

            interests in the trust.  Id. at 771.   
                                     __

                                         -21-
                                          21

                      Similarly,  in  ITT  Commercial  Finance  Corp.  v.
                                      ___________________________________

            Stockdale,  521 N.E.2d 417  (Mass. App. Ct.  1988), the court
            _________

            relied  on  Reiser  to  hold  (in  the  alternative)  that  a
                        ______

            settlor's creditor  could reach  trust assets upon  his death

            where the  settlor was  sole trustee,  his children  were the

            life and remainder beneficiaries, and he had a  general power

            to amend  and  revoke  and a  specific  power  to  substitute

            beneficiaries until his death.  Id. at 417-18.  As in Reiser,
                                            __                    ______

            his creditors could reach the trust assets even though he had

            not  exercised  his  powers  and  the  other   beneficiaries'

            interests  had vested.  See  also Wolfe v.  Wolfe, 486 N.E.2d
                                    ___  ____ _______________

            747, 749 (Mass. App.  Ct. 1985) (5/6 of trust  property could

            be  reached to  satisfy  alimony judgment  where settlor  had

            power  to  alter, amend  and  revoke  and absolute  right  to

            withdraw  5/6 of  principal; remainder  beneficiaries' rights

            were not vested). 

                      The touchstone  of the analysis,  then, is  whether

            the  trust instrument  as  a whole  gives  Fay the  power  to

            eliminate  the  interests of  all others  in  the trust.   As

            settlor, Fay reserved  to herself the right "to  alter, amend

            and  revoke this Trust, in whole or in part, and to terminate

            the  same."    These  unrestricted and  unconditional  powers

            include  the   right  to  substitute  or   strike  out  other

            beneficiaries, Leahy v. Old Colony Trust Co., 93  N.E.2d 238,
                           _____________________________

            239 (Mass. 1950), to vary the income or principal paid to the

                                         -22-
                                          22

            beneficiaries while the trust continues,  including the power

            not to pay them at all, State Street Trust Co. v. Crocker, 28
                                    _________________________________

            N.E.2d 5  (Mass. 1940), and  to completely revoke  the trust.

            Sevinor v. Stahler, 84  N.E.2d 447, 448-49 (Mass. 1949).   If
            __________________

            Fay revoked the trust, or amended it to make herself the sole

            beneficiary,  the legal  title and  equitable interest  would

            merge and thereby terminate the trust.  See Atkins v. Atkins,
                                                    ___ ________________

            180  N.E.2d 613, 614 (Mass. 1932); Langley v. Conlan, 98 N.E.
                                               _________________

            1064,  1066 (Mass.  1912).   As  Fay  points out,  the  trust

            property would not vest free of trust in her if she caused it

            to  terminate, but in her sister Dzialo.  Fay, however, could

            amend the trust to delete that provision.

                      As  trustee, Fay  has  broad powers  to manage  and

            control  the trust  property.   The IRS  makes much  of these

            powers,  but  we attribute  them no  significance whatsoever.

            Broad  powers  are typically  conferred  on a  trustee  as an

            effective  way to manage  trust property.   Trustees  who are

            also  beneficiaries, "like trustees generally, have the power

            to  do acts that are  'necessary or appropriate  to carry out

            the purposes of the trust and are not  forbidden by the terms

            of the trust.'"  Mahoney, 973 F.2d at 971, citing Restatement
                             _______

            (Second) of Trusts   186.  As we have held in the  estate tax

            context,  a  settlor/trustee's administrative  and management

            powers  cannot be  equated  with ownership.   See  Old Colony
                                                          ___  __________

                                         -23-
                                          23

            Trust  Co. v. United States,  423 F.2d 601,  602-03 (1st Cir.
            ___________________________

            1970). 

                      As trustee,  Fay is to  hold the nursing  homes "in

            trust"  for the "general purposes" of the trusts, and to hold

            and  accumulate the principal and net income "for the use and

            benefit  of said  beneficiaries."   The sentence  immediately

            following that direction provides:  "However, anything to the

            contrary herein notwithstanding, the Trustee  shall have full

            power  and discretion  to pay  over to said  beneficiaries so

            much  or all  or  any part  of  the trust  property,  whether

            principal or net income, as she shall deem proper."  We think

            that this sentence, in the context of the trust instrument as

            a  whole, gives  Fay the  power to  pay income  and/or invade

            principal for her benefit alone.   

                      We  recognize,  as  we  have   before,  that  under

            Massachusetts law, a trustee is restricted in the exercise of

            even  broad discretionary powers  by the  terms of  the trust

            viewed as a whole, and by the trustee's fiduciary duty to use

            his or her best  judgment in good faith.   State Street  Bank
                                                       __________________

            and  Trust v. United  States, 634 F.2d  5, 9  (1st Cir. 1980)
            ____________________________

            (citations omitted); see also Fine v. Cohen, 623 N.E.2d 1134,
                                 ___ ____ _____________

            1139  (Mass. App. Ct. 1993);  Dana v. Gring,  371 N.E.2d 755,
                                          _____________

            760-61 (Mass. 1977); Woodberry v. Bunker, 268 N.E.2d 841, 843
                                 ___________________

            (Mass. 1971);  Old Colony Trust  Co. v.  Sillman, 223  N.E.2d
                           _________________________________

            504,  506 (Mass.  1967).   In particular,  a trustee  may not

                                         -24-
                                          24

            exercise  a  broad discretionary  power  to  shift beneficial

            interests in  a trust.  Fine, 623 N.E.2d at 1139; Boston Safe
                                    ____                      ___________

            Deposit  and Trust Co. v.  Stone, 203 N.E.2d  547, 552 (Mass.
            ________________________________

            1965).   A Massachusetts  court necessarily would  evaluate a

            trustee's conduct, if challenged, in  light of the powers and

            duties  set forth in the trust instrument.  Stone, 203 N.E.2d
                                                        _____

            at  552; Fine,  623 N.E.2d  at  1139.   In Copp  v. Worcester
                     ____                              __________________

            County  Nat'l Bank, 199  N.E.2d 200  (Mass. 1964),  the court
            __________________

            found that the trust  instrument's direction that the trustee

            invade principal for the life beneficiary was enforceable and

            not unrestricted because it was to  be in a stated amount and

            only as necessary for her reasonable support and maintenance.

            Id. at  202-03.   In  cases interpreting  trustee powers  for
            __

            federal estate tax purposes, ascertainable standards limiting

            trustee discretion have been found where the trust instrument

            directed  principal and/or  income  to be  distributed for  a

            specific  purpose   (such  as  education   and  support),  or

            expressed an  intent  to  preserve  principal  for  remainder

            beneficiaries, or both.   See State Street Bank and  Trust v.
                                      ___ _______________________________

            United States, 634 F.2d at 9; Old Colony  Trust Co. v. United
            _____________                 _______________________________

            States,  317 F.  Supp.  618, 622  (D.  Mass. 1970);Dana,  371
            ______                                             ____

            N.E.2d at 761; Woodberry, 268 N.E.2d at 843; Worcester County
                           _________                     ________________

            National  Bank v.  King, 268  N.E.2d 838,  840 (Mass.  1971);
            _______________________

            Sillman, 223 N.E.2d at 507-08.
            _______

                                         -25-
                                          25

                      If Fay exercised her  discretion so as to  take the

            trust  property for herself,  thereby depleting or destroying

            the others' interests, we doubt  that a court could determine

            that  she had violated her fiduciary duty in carrying out the

            terms  of the trusts because the trust instruments as a whole

            do   not   limit  her   discretion   or   define  the   other

            beneficiaries' interests  in income  and principal.   They do

            not give Fay's sons the right to any particular proportion of

            the trust income or principal, the right to receive it at any

            particular  time  or interval,  the right  to receive  it for

            their  support or any other definite purpose, or the right to

            receive  it free of trust  when the trust  terminates.  Fay's

            sister's remainder  interest could  amount to nothing  if Fay

            decided  to pay all of  the income and  principal to herself.

            Under  these  circumstances, we  think  that  Fay's sons  and

            sister would have had little or  no recourse if she took  the

            trust  property for her own  benefit.  We  recognize that Fay

            has not done so,  but what is dispositive for  these purposes

            is  whether  the  trust  instrument  contained  ascertainable

            limits on her power to pay income or invade principal for her

            benefit alone that  the other beneficiaries could  rely on to

            enforce any rights of their own. Moreover,  we  do not  think

            that  the other  beneficiaries'  interests in  the trust  are

            vested.   Although  that  apparently makes  no difference  in

            light of Reiser and Stockdale, it does mean that their rights
                     ______     _________

                                         -26-
                                          26

            are inchoate at the  present time.  Under  Massachusetts law,

            whether a right in a trust has vested depends on "whether, in

            substance,  the  interest   is  sufficiently  established  to

            constitute an  interest or  right  which has  accrued to  its

            holder."  New  England Merchants Nat'l Bank  v. Groswold, 444
                      ______________________________________________

            N.E.2d 359, 363 (Mass.  1983).  That an interest  is "subject

            only to total  or partial defeat  by biological events"  does

            not make it inchoate.   Id.  Thus,  a beneficiary's right  to
                                    __

            receive part of the  trust property that depends only  on his

            or  her survival until the death of other persons is a vested

            property right.  See Id.; Billings v. Fowler, 279 N.E.2d 906,
                             ___ __   __________________

            908  (Mass. 1972);  Whiteside v.  Merchants' Nat'l  Bank, 187
                                ____________________________________

            N.E.  706, 709 (Mass. 1933); Alexander v. McPeck, 75 N.E. 88,
                                         ___________________

            92 (Mass. 1905).  But where the right depends on the exercise

            or non-exercise of powers  held by another, the beneficiary's

            right does not vest  until the person holding the  powers can

            no  longer  exercise them.   See  Reiser,  389 N.E.2d  at 770
                                         ___  ______

            (remainder  interests  of  beneficiaries became  vested  upon

            death  of settlor because his  powers to amend  or revoke the

            trust  and direct payments from it died with him); Old Colony
                                                               __________

            Trust  Co. v. Clemons, 126 N.E.2d 193 (Mass. 1955) (rights of
            _____________________

            remainder beneficiaries did  not vest  until settlor's  death

            where  he had  the  right  to  revoke  the  trust  or  change

            beneficiaries).  Any right in Fay's sons or sister to receive

            part  of the  trust  property is  not  contingent on  a  mere

                                         -27-
                                          27

            biological event, but  on whether  or not  Fay exercises  her

            power to  amend or revoke the  trusts, and on to  whom and in

            what amounts  she distributes income and  principal while the

            trust continues.  Their interests therefore are not vested.

                      Due to  the broad  nature of  Fay's powers  and the

            limited and unenforceable nature of the beneficial interests,

            Fay has the power to eliminate the interests of her sons  and

            her  sister.  We  therefore think that  a Massachusetts court

            would treat the entire  trust property of the Green  Pastures

            and  Parker Hill Nursing Home Trusts as Fay's own in favor of

            her  creditors.  Like  the settlors in  Reiser, Stockdale and
                                                    ______  _________

            Wolfe,  Fay has the right to  amend and revoke the trusts and
            _____

            to  direct disposition  of  principal and  income.   Although

            there is nothing invalid in the roles of settlor, trustee and

            beneficiary  co-existing in the same person,  in this case it

            meant  that Fay had the power as trustee to distribute income

            and principal  in whatever proportion she  deemed proper, the

            right  as a  beneficiary to  receive income and  principal in

            whatever  amount  she  as  trustee  deemed  proper,  and  the

            unrestricted  power as settlor to alter, amend, or revoke the

            trusts.  The trusts at issue here are even more vulnerable to

            Fay's creditors  than those at issue in  Reiser and Stockdale
                                                     ______     _________

            because the other beneficiaries'  interests in the trust have

            not  vested and Fay remains  able to exercise  her powers and

            thus deplete or destroy them.  

                                         -28-
                                          28

                      We do not  hold that  the trusts are  invalid --  a

            trust  in which the settlor has reserved to herself the power

            to alter, amend  or revoke, and is also the  sole trustee and

            one of  the trusts'  beneficiaries  with a  right to  receive

            income and principal in her own discretion as trustee, is not

            invalid.   See  Roberts  v. Roberts,  646  N.E.2d 1061,  1064
                       ___  ___________________

            (Mass. 1995); Sullivan, 460 N.E.2d at 575; Ascher, 131 N.E.2d
                          ________                     ______

            at  199-200.   And  although  it  may  be  only  a  technical

            distinction,  we do not hold that Fay must exercise her power

            to amend  or revoke  to  satisfy the  tax debt.    See In  re
                                                               ___ ______

            Cowles, 143 B.R. 5, 10 (Bankr. D. Mass. 1992) ("The Court can
            ______

            allow  the creditors to reach the assets of the trust without

            requiring revocation  of the trust.").  Rather,  we hold that

            the federal tax lien on Fay's individual property reaches the

            entire  assets of the Green Pastures  and Parker Hill Nursing

            Home  Trusts because Fay has the power to eliminate the other

            beneficiaries' interests and treat  the trust property as her

            own based on the  following combination of provisions in  the

            trust instruments: (1) Fay as settlor has the power to alter,

            amend or  revoke, which,  if exercised, could  result in  the

            entire  trust property vesting in her; (2) Fay as trustee has

            absolute  discretion  to  pay  income and  principal  to  the

            beneficiaries, including herself, in whatever  proportion she

            deems appropriate, even if such payments entirely deplete the

            other beneficial  interests; and (3) Fay  is settlor, trustee

                                         -29-
                                          29

            and  a beneficiary.  Fay  invokes George v.  Kitchens by Rice
                                              ___________________________

            Bros.,  Inc., where  we stated  that  "a power  of revocation
            ____________

            under  Massachusetts law is not considered property . . . and

            cannot be reached  by creditors."   665 F.2d 7,  8 (1st  Cir.

            1981).     George   remains  a   correct   interpretation  of
                       ______

            Massachusetts  law where,  as  in that  case, the  only power

            reserved by the  settlor, who was also the  trustee but not a

            beneficiary, was the power to revoke.  

                      Because  the tax lien  consequently attaches to the

            mortgages  now held by the  trusts, the lien  attaches to the

            proceeds  of  the  sale  of  the  nursing  homes  that  would

            otherwise  replace  the mortgages  as  trust  property.   Cf.
                                                                      __

            Phelps  v.  United States,  421  U.S. 330,  334  (1975) (when
            _________________________

            property  subject  to  tax  lien  is  transferred,  the  lien

            attaches to the proceeds of the transfer).  

                      B.   The Highland Avenue Nursing Home Trust
                           ______________________________________

                      On August 14, 1974, Fay created the Highland Avenue

            Nursing Home  Trust, naming herself  as sole trustee  for her

            life,  and the beneficiaries as herself, her two sons and her

            sister  Dzialo,  "in equal  shares."    Paragraph  11 of  the

            declaration of trust provides as follows:  "The Trustee, may,

            subject to the  limitations herein  expressed, acquire,  own,

            and  dispose  of any  interest in  this  trust [to]  the same

            extent as if she were  not a Trustee."  The  magistrate judge

            found  that paragraph  11 gives  Fay the  power to  treat the

                                         -30-
                                          30

            principal  and income of the trust  as her own, and held that

            the IRS was therefore entitled to the proceeds of the sale of

            the  Highland Avenue Nursing Home.   884 F.  Supp. at 609-10.

            In reaching  that  conclusion,  the  magistrate  judge  first

            observed  that the meaning of the trust instrument as a whole

            was  difficult to discern, raising the  suspicion that it was

            drafted "so as to give the trustee free reign but  also so as

            to contain other language purporting to constrain the trustee

            merely to have something at which to point  if the trust were

            attacked."    Id.  at  607.     Against  this  backdrop,  the
                          __

            magistrate judge found specific ambiguity in paragraph 11, in

            that  the  term  "any   interest"  could  mean  either  Fay's

            "beneficial interest"  or the  "income and principal"  of the

            trust.  Id.  at 609.  Resolving the ambiguity  against Fay as
                    __

            drafter, the magistrate  judge concluded that "any  interest"

            must mean the  "income and principal" of the trust.  This was

            so  because  the  only  other  instance  in  which  the  word

            "interest"  is  used  without  being  modified  by  the  word

            "beneficial" is  in paragraph 23, referring  to the "interest

            of  any  beneficiary  hereunder,   either  as  to  income  or

            principal."8     The  magistrate  judge  then   read  out  of

                                
            ____________________

            8.  Paragraph 23 is the spendthrift provision, providing that
            "[t]he interest  of any  beneficiary hereunder, either  as to
            income or to principal,  shall not be anticipated, alienated,
            or in any manner  assigned by such beneficiary and  shall not
            be subject  to any legal process,  bankruptcy proceedings, or
            the interference or  control of creditors or others,  nor the
            subject  matter of any contract or trust made or entered into

                                         -31-
                                          31

            paragraph 11  the phrase  "subject to the  limitations herein

            expressed,"   based  on  his   interpretation  of  the  trust

            instrument  as  imposing no  limitation  on  Fay's powers  as

            trustee.  Id. at 609.  Paragraph 11 therefore meant  that Fay
                      __

            could  treat  the principal  and income  as  her own  free of

            trust.  Id. at 609-10.   We  hold  that the  magistrate judge
                    __

            erred  as a  matter of  law in  interpreting paragraph  11 as

            giving Fay the power to treat the principal and income of the

            trust  as her  own.   First,  we  fail to  see  in the  trust
                                  _____

            instrument  a  purpose to  mislead  or an  unusual  or unfair

            allocation of powers, rights and interests among the settlor,

            the trustee and the beneficiaries.  Fay reserved no powers to

            herself as  settlor, but the magistrate judge  seemed to find

            it significant that  on the  one hand, Fay  as trustee  holds

            legal title to and has extensive powers to manage and dispose

            of the trust  property, while on the other, the beneficiaries

            do not have any  title in the trust property, but  "shares of

            beneficial  interests" that cannot be transferred or assigned

            without offering  them first to the  other beneficiaries, and

            that are "personal  property, giving only the rights  in this

            instrument specifically set forth."  Id. at 607-09.  
                                                 __

                      The  trust instrument's  definition of  the various

            powers, rights and  interests was a correct  statement of the

            Massachusetts law of trusts.  The creation of a trust results

                                
            ____________________

            by any beneficiary."

                                         -32-
                                          32

            in  the  separation  of  the  legal  interest  in  the  trust

            property,  which  is  in  the trustee,  from  the  beneficial

            interest  in the  trust, which  is in  the beneficiaries.   2

            Scott on Trusts,   99.  The trustee holds the  legal title to

            the trust property in trust  for the beneficiaries, while the

            beneficiaries hold beneficial  interests, which are equitable

            in nature.   See Russell  v. Russell, 468  N.E.2d 1104,  1106
                         ___ ___________________

            (Mass. App. Ct. 1984) (defining a trust as the "manifestation

            of  an  intention to  create  a  fiduciary relationship  with

            respect to  property, [which]  subject[s] the person  by whom

            the title to the property is held to equitable duties to deal

            with  the  property  for  the  benefit  of  another  person")

            (internal  quotation marks  and citations  omitted); National
                                                                 ________

            Shawmut  Bank v.  Cumming, 91  N.E.2d 337,  338 (Mass.  1950)
            _________________________

            (referring to the trustee's  "title" to and the beneficiary's

            "beneficial  interests" in  the  trust  property);  Worcester
                                                                _________

            Trust Co. v. Turner,  96 N.E. 132, 134 (Mass.  1911) (trustee
            ___________________

            holds title  to the  principal; beneficiary  has  a right  to

            receive  so  much  of  it  as   necessary  in  the  trustee's

            discretion, but no  absolute right  to the fund  itself).   A

            trustee  does not hold trust  property as her  own due to the

            fact that she holds legal title to it.  See Cook v. Howe, 182
                                                    ___ ____________

            N.E. 581, 582-83 (Mass. 1932)  (trustee who holds legal title

            to real  estate in trust for  a beneficiary may  not keep the

            proceeds  as his  own); cf.  Cantor v.  Wilbrahim  and Monson
                                    __   ________________________________

                                         -33-
                                          33

            Academy,  609 F.2d  32, 35  (1st Cir.  1979) (trustee  is the
            _______

            legal  owner, but the trust itself is the debtor for purposes

            of  the Bankruptcy Act).  Rather, a trustee holds legal title

            in order  to manage  the  trust property,  and typically  has

            broad powers to  do so as a  practical way of  conducting the

            trust's business.  Like any trustee's powers, Fay's powers to

            hold,  manage and dispose of  the trust property were subject

            to the  "specific limitations herein contained,"  that is, to

            conduct the trust business "for the benefit of the holders of

            the shares hereunder."

                      That  the  beneficiaries' interests  were "personal

            property" was also a correct statement of the law.  Where, as

            here, a trust contains both real and personal property,9  and

            the  trust  instrument  directs  that  the  trust  assets  be

            liquidated upon termination of the  trust, the beneficiaries'

            interests  are personal property  from the trust's inception.

            See Priestley v.  Burrill, 120 N.E. 100, 104-05 (Mass. 1918);
            ___ _____________________

            Dana v.  Treasurer and Receiver General, 116 N.E. 941, 943-44
            _______________________________________

            (Mass. 1917).  

                                
            ____________________

            9.  Fay as trustee was to "hold [the  Highland Avenue Nursing
            Home] and cash so to be acquired by her, as well as all other
            property which  she may acquire as such Trustee together with
            the  proceeds thereof,"  and  was "authorized  to manage  and
            maintain  the  trust property  and  invest  and reinvest  the
            property and proceeds of the trust in real estate, mortgages,
            securities of any lawful business and to engage in any lawful
            business."

                                         -34-
                                          34

                      The  language  providing   that  "ownership  of   a

            beneficial interest .  . . shall not entitle  the beneficiary

            to any title in or to the trust property whatsoever, or right

            to call  for a partition or  division of the same,  or for an

            accounting," is not unfamiliar in Massachusetts trusts.  See,
                                                                     ___

            e.g., Gardiner v. United  States, 49 F.2d 992, 994  (1st Cir.
            ____  __________________________

            1931); Lauricella  v. Lauricella, 565 N.E.2d  436, 437 (Mass.
                   _________________________

            1991);  State Street Trust Co. v. Hall,  41 N.E.2d 30, 32, 35
                    ______________________________

            (Mass. 1942); Dana, 116 N.E.  at 942.10  As set forth  above,
                          ____

            it  is  a  correct  statement  of  the  law  of  trusts  that

            beneficiaries  do  not  hold  title to  the  trust  property;

                                
            ____________________

            10.  Trusts that  contain similar provisions and  that have a
            similar purpose  in that at least part  of the purpose of the
            trust is to carry on a business, are common in Massachusetts.
            Whether  such a trust is, for various purposes, a pure trust,
            a business trust or  a partnership has often  been litigated,
            and depends  on  the  relative  powers of  the  trustees  and
            beneficiaries, whether  the primary activity of  the trust is
            commercial,  and whether it issues transferrable certificates
            of shares.   See Hecht v.  Malley, 265 U.S.  144 (1924); Pope
                         ___ ________________                        ____
            and Cottle Co. v.  Fairbanks Realty Trust, 124 F.2d  132 (1st
            _________________________________________
            Cir. 1941); Bomeisler v.  M. Jacobson & Sons Trust,  118 F.2d
                        ______________________________________
            261 (1st Cir.  1941); Gardiner,  49 F.2d 992;  In re  Village
                                  ________                 ______________
            Green Realty Trust, 113  B.R. 105 (Bankr. D. Mass.  1990); In
            __________________                                         __
            re  Medallion  Realty Trust,  120 B.R.  245 (Bankr.  D. Mass.
            ___________________________
            1990); In re L & V Realty Trust, 61 B.R. 423 (Bankr. D. Mass.
                   ________________________
            1986); First  Eastern Bank  v. Jones, 602  N.E.2d 211  (Mass.
                   _____________________________
            1992);  Hall, 41  N.E.2d 30;  Baker v.  Comm'r of  Corps. and
                    ____                  _______________________________
            Taxation,  148 N.E.  593 (Mass.  1925); Dana,  116 N.E.  941;
            ________                                ____
            Frost  v. Thompson, 106  N.E. 1009 (Mass.  1914); Williams v.
            __________________                                ___________
            Inhabitants of Milton, 102  N.E. 355 (Mass. 1913).   See also
            _____________________                                ___ ____
            Takemi Ueno, Defining a "Business Trust":  Proposed Amendment
                         ________________________________________________
            of Section  101 (9) of  the Bankruptcy  Code, 30 Harv.  J. on
            ____________________________________________
            Legis.  499  (1993).   That question  is  not before  us, but
            trusts with characteristics like those of the Highland Avenue
            Nursing  Home  Trust  are  a "lawful  method  of  transacting
            business in [the] Commonwealth."  Hall 41 N.E.2d at 34.
                                              ____

                                         -35-
                                          35

            rather, they own an equitable interest in the trust property.

            Although  we  are  somewhat  concerned  about   the  language

            purporting to deny the  beneficiaries a right to call  for an

            accounting, that language would  have been disregarded if the

            beneficiaries  had petitioned  a  court  for  an  accounting.

            Briggs v. Crowley,  224 N.E.2d  417, 421 (Mass.  1967).   And
            _________________

            spendthrift  provisions  like  the  one  here  are  valid  in

            Massachusetts.  Pemberton, 411 N.E.2d at 1312.
                            _________

                      Second, we  think  that the  interpretation of  the
                      ______

            term "any interest" in paragraph 11 as "income and principal"

            is extraordinarily strained,  but more to the point,  it does

            not   follow   even   from  that   interpretation   that  the

            beneficiaries  other   than  Fay  do  not   have  enforceable

            equitable interests in the trust or that Fay has the power to

            eliminate  those interests  in  her own  favor.   Although we

            agree that paragraph  11 is ambiguous viewed in isolation, it

            is  not  susceptible  of  the meaning  the  magistrate  judge

            attributed  to it  when viewed  in the  context of  the trust

            instrument as a  whole.   The magistrate judge  did not  take

            account of  the  distribution of  powers  in the  trust  that

            should have led to  the conclusion that Fay did  not have the

            power to eliminate the other beneficiaries' interests.  

                      Fay  did  not  reserve  to  herself  the  right  to

            unilaterally alter, amend or revoke the trust, but granted it

            to  those holding a majority of beneficial shares.  The trust

                                         -36-
                                          36

            is to terminate  twenty years  after Fay's death,  or may  be

            terminated  earlier  "by  a   majority  vote  of  all  shares

            outstanding,   at  a   meeting   of  the   trustee  and   the

            beneficiaries,  called for that expressly stated purpose," at

            which  the  trustee  may  not   vote.    Whenever  the  trust

            terminates,  the then trustee(s) must wind  up the affairs of

            the trust,  liquidate the assets and  distribute the proceeds

            among the beneficiaries in proportion to the  shares owned by

            them.   The  trust "may  be amended  or altered  in any  part

            whatever . . .  with the consent of a  majority percentage of

            vote as hereinbefore provided."   

                      A settlor  may either reserve powers  to herself or

            grant them  to others, Crocker, 28  N.E.2d at 7,  but a trust
                                   _______

            "cannot be revoked or  altered except by a reserved  power to

            do  so, which must be exercised in strict conformity with its

            terms."  Trager  v. Schwartz, 189  N.E.2d 509, 511-12  (Mass.
                     ___________________

            1963)  (citations omitted).   See also  Markell v.  Sidney B.
                                          ___ ____  _____________________

            Pfeifer  Found., Inc.,  402  N.E.2d 76,  92  (Mass. App.  Ct.
            _____________________

            1980); Stahler v. Sevinor,  84 N.E.2d 447, 448  (Mass. 1949);
                   __________________

            Thorp  v.  Lund, 116  N.E. 946  (Mass.  1917).   The Highland
            _______________

            Avenue Nursing Home Trust therefore  could only be altered or

            revoked by  the beneficiaries  holding a majority  of shares.

            Just as Fay could eliminate  other beneficiaries of the Green

            Pastures  or Parker Hill Nursing  Home Trusts as  part of her

            power  to  alter  or  amend,  those  holding  a  majority  of

                                         -37-
                                          37

            beneficial shares  in the Highland Avenue  Nursing Home Trust

            could  eliminate Fay  as  a beneficiary  by exercising  their

            power  to amend  "in any  part whatever."   Furthermore,  the

            other   beneficiaries  could  have  ousted  Fay  as  trustee.

            Although beneficiaries cannot appoint  a new trustee  without

            an express grant of power to do so, where, as here, they have

            a power to  revoke and to compel the  trustee to transfer the

            trust  property  to  them,  they  can  revoke the  trust  and

            immediately  create a  new trust,  naming a  new trustee.   2

            Scott on Trusts   108.4; Restatement (Second) of Trusts   108

            cmt. i.   

                      Moreover, Fay does not have unbridled discretion as

            trustee  to take income or invade principal at the expense of

            the other  beneficiaries, who  have enforceable  interests in

            the trust.   While Fay  may distribute net  earnings in  such

            amount  as she sees fit,  she must make  some distribution at

            least  annually "in the proportion to the shares owned by the

            beneficiaries."  Furthermore,  the trust instrument evidences

            Fay's intent that, upon termination, the trust property go to

            beneficiaries in addition  to herself or her successors.   At

            that time,  the assets  must be  liquidated and  the proceeds

            distributed proportionately among the beneficiaries.  

                      Although   Fay  is  the   settlor,  trustee  and  a

            beneficiary,  the  trust instrument  gives  her  no power  to

            unilaterally  alter, amend  or revoke  the trust,  limits her

                                         -38-
                                          38

            discretion as  trustee to  distribute income, and  limits her

            right  to receive  income as  a beneficiary  to an  amount in

            proportion  to the  shares owned  by her.   Fay's  rights and

            powers  therefore  were not  so  centralized as  to  make the

            entire trust property her own.  

                      In light  of the trust  instrument as  a whole,  we

            conclude that paragraph  11 does  not mean that  Fay has  the

            power  to treat the principal and income  of the trust as her

            own free of trust.  The term "any  interest" could mean Fay's

            beneficial  interest, so  that paragraph  11 means  that Fay,

            like any other  beneficiary and although she is  the trustee,

            may acquire, own and dispose of shares in accordance with the

            conditions  and procedures  set forth  in the  declaration of

            trust;11  receive annual  distributions out  of net  earnings

            in  proportion to her share; and  have her equitable interest

            in the trust  pass to her successors  upon her death.12   See
                                                                      ___

                                
            ____________________

            11.  Paragraph 13  provides  that "the  beneficial  interests
            hereby  created  shall  not  be  transferrable  or assignable
            without first offering said shares to the other beneficiaries
            in  writing."     The  trustee  must   notify  the  remaining
            beneficiaries of  a beneficiary's offer to  sell shares; they
            or any of them may accept the offer, or, alternatively, three
            arbitrators may  be  chosen to  ascertain  the value  of  the
            offered shares; the  beneficiary desiring to  sell may do  so
            free  of  restriction  thirty  days  from  the  date  of  the
            arbitrators' determination if the beneficiary desiring to buy
            has not paid the amount  so determined; and if more  than one
            beneficiary desires to buy,  they may buy the offered  shares
            in proportion to the shares held by them.

            12.  The executors, administrators or assigns of any deceased
            beneficiary are to  succeed to  his or her  rights under  the
            trust.

                                         -39-
                                          39

            Andreson v. Andreson, 562  N.E.2d 91, 92 n.2 (Mass.  App. Ct.
            ____________________

            1990)  (trust  instrument  stated  that  "[a]ny  trustee  may

            without  impropriety  become   a  beneficiary  hereunder  and

            exercise  all rights of a beneficiary with the same effect as

            though he  were not  a trustee.").   Alternatively,  the term

            "any   interest"  could   mean   the   trust  principal   and

            undistributed income, so  that paragraph 11 means that Fay as

            trustee  had full power to  manage the business  of the trust

            free  of the  control of  the other beneficiaries  (who could

            remove her as a beneficiary or as trustee).  Cf. Navarro Sav.
                                                         __  ____________

            Assoc. v. Lee, 446  U.S. 458, 459, 465 n.14  (1980) (trustees
            _____________

            had exclusive authority over trust property free from control

            of shareholders "as if  the Trustees were the sole  owners of

            the Trust Estate in their  own right," while shareholders had

            power to terminate or amend).  Under any  interpretation, Fay

            was "subject  to the limitations herein  expressed," that is,

            her duty as trustee to hold the  trust property "in trust, to

            manage and dispose of the same for the benefit of the holders

            of the shares."

                      In sum,  we hold  that the entire  property of  the

            Highland Avenue Trust does not constitute Fay's "property" or

            "rights to  property" to  which  the federal  tax lien  could

            attach  because  the  trust  instrument  defines the  various

            powers, rights  and interests in  accordance with the  law of

            trusts,  gives the  beneficiaries other than  Fay enforceable

                                         -40-
                                          40

            equitable interests in the trust property,  and does not give

            Fay the unilateral power to eliminate their rights.  

                      The lien  does, however, attach  to whatever aspect

            of Fay's  beneficial interest in the  Highland Avenue Nursing

            Home Trust  that constitutes  present "property or  rights to

            property"  under Massachusetts  law.13   While a  federal tax

            lien attaches  to property  and rights  to property that  the

            taxpayer acquires at any time  after assessment, it does  not

            attach unless and until the taxpayer acquires what is defined

            as property by  state law.   United States  v. McDermott,  __
                                         ___________________________

            U.S. __,  113 S. Ct.  1526, 1530  (1993).  Thus,  courts have

            held  that   while  a   federal  tax   lien  attaches   to  a

            taxpayer/beneficiary's present right to receive distributions

            of  income  or principal,  it does  not  attach to  the trust

            corpus when he  or she has  no present right  to receive  it.

            United States v.  Cohn, 855  F. Supp. 572,  576-77 (D.  Conn.
            ______________________

            1994); In re Cavanaugh,  153 B.R.  224, 228 (Bankr. N.D. Ill.
                   _______________

            1993);  Wilson  v.  United States,  140  B.R.  400,  404, 407
                    _________________________

            (Bankr.  N.D. Tex. 1992).  See also  In re Lyons, 148 B.R. 88
                                       ___ ____  ___________

            (Bankr. D.D.C. 1992)  ("a federal  tax lien may  attach to  a

                                
            ____________________

            13.  The  spendthrift  clause  is  ineffective  as  to  Fay's
            beneficial   interest  because   she  is  both   settlor  and
            beneficiary.  See Morrissey,  109 N.E.2d at 823; Forbes,  140
                          ___ _________                      ______
            N.E. at 419.   Moreover,  a spendthrift clause  is "merely  a
            state-created exemption from the  reach of creditors, and not
            an aspect  of the substantive  [property] right"  to which  a
            federal  lien attaches.  United States  v. Rye, 550 F.2d 682,
                                     _____________________
            685 (1st Cir. 1977).

                                         -41-
                                          41

            taxpayer's  vested  right, under  a trust  .  . .  to receive

            periodic payments  or distributions  of property then  due or

            that will become due in the future.").

                      Fay's  right to  receive annual  distributions from

            net  earnings in proportion to  her share until  her death or

            until  the trust  terminates  earlier is  a presently  vested

            property  right.  See  Forbes, 140 N.E.  at 420.   Because "a
                              ___  ______

            settlor  cannot place property  in trust for  his own benefit

            and  keep it  beyond  the  reach  of  his  creditors,"  Fay's

            "creditors  can reach  the maximum  amount which  the trustee

            under the  terms of the trust could pay to [her] or apply for

            [her]  benefit."  Ware v.  Gulda, 117 N.E.2d  137, 138 (Mass.
                              ______________

            1954),  citing  Restatement  (Second)   of  Trusts     156(2)

            (internal quotation marks and additional  citations omitted).

                      Fay's  right to  sell her  share is  not  a present

            right  to property because she cannot sell it to anyone other

            than  her  co-beneficiaries without  at  least their  passive

            consent.  See note 11, supra.  In United States  v. Bess, the
                      ___          _____      ______________________

            Supreme Court held that a lien attached to an insured's right

            under  the terms of his life insurance policy to exchange the

            policy for its cash surrender value during his lifetime.  357

            U.S. at  56.  Fay's  right to  sell her  beneficial share  is

            similar  to Bess's  right  to exchange  his policy  for cash,

            except that Fay's right  to sell is qualified and  limited by

                                         -42-
                                          42

            the rights of the other beneficiaries to buy her share, while

            Bess's right to  cash in  his policy was  unqualified.   This

            distinction is critical  because Fay has property  to which a

            tax  lien can attach only  insofar as conferred  by the trust

            instrument as it would be enforced by state law.  Cf. Chicago
                                                              __  _______

            Mercantile  Exch. v.  United States,  840 F.2d  1352, 1354-56
            ___________________________________

            (7th  Cir.  1988) (where taxpayer could transfer his exchange

            seat only as authorized and  on the conditions prescribed  in

            the exchange rules, with no rights in or to the membership or

            the  proceeds  of  the  sale  of such  membership  except  as

            specifically  granted  in  the  rules,  the  full  extent  of

            member's  property interest  in the  seat, which  had already

            been involuntarily  sold, was  the remainder of  the proceeds

            after  internal claims  were paid.).   Although  we have  not

            found any Massachusetts  case discussing whether a  qualified

            right to sell a  beneficial interest in a trust  is property,

            we have no doubt that a Massachusetts court would enforce the

            other  beneficiaries'  right  to   buy  Fay's  share  if  she

            attempted to sell it  to an outsider without  consulting them

            or  without their consent.   Fay's limited right  to sell her

            share  therefore is  not a  present right  to property.   The

            lien, of course, will attach to the proceeds from the sale of

            Fay's  share if and when she  sells it (assuming the tax debt

            is  not paid),  because  she will  then  be holding  her  own

            property free of trust.

                                         -43-
                                          43

                      Nor does  Fay have  present property rights  in the

            trust corpus.   As  a beneficiary,  she has no  title to  the

            trust property or right  to call for a partition  or division

            of it  as long  as  the trust  continues, and  has "only  the

            rights in this  instrument specifically set forth."   She has

            no right to receive  or withdraw any of the  trust principal.

            Cf.  In re  Cowles, 143  B.R.  5, 10  (Bankr. D.  Mass. 1992)
            __   _____________

            (settlor had the power  to withdraw "any part  or all of  the

            trust  property," so  his  creditors could  reach the  entire

            trust principal); Wolfe, 486  N.E.2d at 749 (settlor  had the
                              _____

            right  to withdraw 5/6 of  the trust corpus,  so his creditor

            was permitted  to reach  that part  of the  trust principal).

            According to the declaration of trust, Fay could receive  her

            share  of the  liquidated assets  during life  only if  those

            owning a majority of beneficial shares vote to  terminate the

            trust   during  her   lifetime;  otherwise,   her  executors,

            administrators or assigns will succeed to her rights upon her

            death.  

                      As set  forth in  Part III(A), under  Massachusetts

            law,  whether  a  right in  a  trust  has  vested depends  on

            "whether,   in  substance,   the  interest   is  sufficiently

            established  to constitute  an  interest or  right which  has

            accrued to its  holder," that  is, whether it  is subject  to

            defeat  only by biological events, in which case the right is

            vested, Groswold, 444 N.E.2d at 363, or whether it is subject
                    ________

                                         -44-
                                          44

            to defeat by  another person's decision  to exercise a  power

            that he or she holds,  in which case the right does  not vest

            until the person holding the power can no longer exercise it.

            Reiser,  389 N.E.2d  at 770;  Clemons, 126  N.E.2d 193.   The
            ______                        _______

            possibility  that Fay  might  receive a  share  of the  trust

            corpus  during  her  lifetime  hinges  on  whether  or not  a

            majority  of  the  holders   of  beneficial  shares  vote  to

            terminate  the trust, and whether or not they decide to amend

            the  trust by removing  her as a beneficiary.   Thus, it does

            not amount to a present right to property under Massachusetts

            law.  The lien will attach to  her share of the assets if and

            when the trust terminates during her lifetime (again assuming

            the  tax  debt is  still unpaid),  because  she will  then be

            holding her own property free of trust.

                      Assuming that a  majority of  the beneficiaries  do

            not vote to  terminate the trust  during Fay's lifetime,  her

            executors,  administrators or  assigns  will succeed  to  her

            rights under the trust upon her death.  In Bess, the  Supreme
                                                       ____

            Court  stated with regard to the proceeds of a life insurance

            policy  that "[i]t would  be anomalous to  view as 'property'

            subject to lien proceeds never  within the insured's reach to

            enjoy, and which are reducible to possession by another  only

            upon  the  insured's  death  when his  right  to  change  the

            beneficiary  comes to  an  end."   Id.  at   55-56.   But  in
                                               __

            Massachusetts,  the right of a  trust beneficiary to have his

                                         -45-
                                          45

            share  of the trust corpus  paid over to  his successors upon

            death  has been treated as a present right to property during

            the  beneficiary's lifetime.  See, e.g.,  Forbes, 140 N.E. at
                                          ___  ____   ______

            420; Alexander, 75 N.E. at 92.  In those cases,  however, the
                 _________

            trust    instrument    unequivocally   provided    that   the

            beneficiary's share of the  corpus was to be paid  over, free

            of  trust,  to  the   beneficiary's  successors  upon  death.

            Whether  there will  be any  interest in  the trust  to which

            Fay's  heirs  or assigns  could  succeed  depends, again,  on

            whether those holding a majority of beneficial shares vote to

            terminate the trust  before Fay's death, or to  eliminate Fay

            as a  beneficiary.  We  think that  Fay's right  to have  her

            successors  receive  income  or   principal  from  the  trust

            therefore is  too ethereal to  constitute a present  right to

            property.  The lien will attach, however, upon Fay's death to

            whatever beneficial  interest she  holds at that  time, again

            assuming  the tax debt remains  unpaid.  Cf.  Welch v. Paine,
                                                     __   ______________

            120  F.2d  141,  143 n.2  (1st  Cir.  1941)  (creditors of  a

            decedent  must be paid before his property passes to the next

            of kin).

                      We  remand to  the magistrate  judge to  fashion an

            order  enforcing the  tax  lien  on  Fay's present  right  to

            receive annual distributions from net earnings  in proportion

            to her share.  That the  value of this right may be difficult

            to discern  does  not  alter the  conclusion  that  the  lien

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                                          46

            presently attaches, Rye,  550 F.2d  at 685;  Raihl v.  United
                                ___                      ________________

            States, 152 B.R. 615, 619 (Bankr. 9th Cir. 1993), but it does
            ______

            not  flow  from that  conclusion  that  the property  can  be

            executed  upon immediately.   United  States v.  Overman, 424
                                          __________________________

            F.2d 1142, 1145 (9th  Cir. 1970).  Under the  FDCPA, property

            held in  trust is "co-owned  property," cf. United  States v.
                                                    __  _________________

            Coluccio,  51  F.3d   337,  342  (2d  Cir.  1995)  (funds  in
            ________

            constructive   trust  are   co-owned  property),   which  the

            government can execute on  only "to the extent such  property

            is subject to execution  under the law of the  State in which

            it  is  located."14    28  U.S.C.     3203(a);  28  U.S.C.   

            3010(a).  

                      In Massachusetts,  a trust cannot be  terminated in

            order to pay a creditor at any time earlier than the terms of

            the  trust provide,  at least  where there  are beneficiaries

            other  than the  debtor.    See  Forbes,  140  N.E.  at  421;
                                        ___  ______

            Alexander,  75 N.E. at 91.  Fay's beneficial right to receive
            _________

            an  annual share  of net  earnings can, however,  be executed

            upon in one of  two ways.  First,  even though it  ordinarily

            could not be reached and  applied "until a future time or  is

            of  uncertain value," it can  be reached and  applied "if the

            value can be ascertained  by sale, appraisal or by  any means

                                
            ____________________

            14.  When  the  IRS seeks  to  collect other  than  through a
            section  7403 proceeding or by levy, it has the privileges of
            an ordinary judgment creditor, Rodgers, 461 U.S. at 682, 697,
                                           _______
            or in this case, whatever privileges the FDCPA confers.

                                         -47-
                                          47

            within the ordinary procedure  of the court."  Mass.  Gen. L.

            ch. 214   3(6).  See also New England Merchants Nat'l Bank v.
                             ___ ____ ___________________________________

            Hoss, 249 N.E.2d  635, 638 (Mass. 1969);  Whiteside, 187 N.E.
            ____                                      _________

            at 710;  Alexander, 75  N.E.  at 92.   Thus,  Fay's right  to
                     _________

            receive  annual distributions  from net  earnings conceivably

            could be sold  and the proceeds paid to the  IRS if its value

            could  be ascertained and a  buyer found.  Alternatively, her

            share of  net earnings could be  paid to the IRS  as it comes

            due  annually according to the  terms of the  trust.  Forbes,
                                                                  ______

            140  N.E. at 421; see also United States v. Solheim, 953 F.2d
                              ___ ____ ________________________

            379, 382 (8th  Cir. 1992);  Cohn, 855 F.  Supp. 572,  576-77;
                                        ____

            United States v.  Taylor, 254  F. Supp. 752,  758 (N.D.  Cal.
            ________________________

            1966), cited  with approval  in Rye,  550 F.2d at  685.   The
                   ________________________ ___

            magistrate  judge may  proceed  according  to either  method,

            holding hearings or other proceedings as necessary.

            IV.  CONCLUSION
                 __________

                      On  remand,  the  judgment  should  be  modified as

            follows:   The United States  is entitled to  $11,686.22 (the

            proceeds  of the sale of  the Green Pastures  and Parker Hill

            Nursing  Homes)  plus  the   accumulated  interest  on  those

            proceeds.  The Highland Avenue Nursing Home Trust is entitled

            to  $16,046.63  (the proceeds  of  the sale  of  the Highland

            Avenue Nursing Home), plus the accumulated interest, less any

            amount  determined to be presently  payable to the  IRS.  The

            magistrate  judge shall  fashion an  order enforcing  the tax

                                         -48-
                                          48

            lien on Fay's right  to annual payments from net  earnings of

            the Highland Avenue Nursing Home Trust.  

                      Affirmed in  part, reversed in  part, and  remanded
                      Affirmed in  part, reversed in  part, and  remanded
                      ___________________________________________________

            for a new judgment.  No costs.
            for a new judgment.  No costs.
            _____________________________

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                                          49