United States: Massachusetts Uniform Trust Code Enacted

The Massachusetts Uniform Trust Code (the "MUTC") was signed into law on July 8, 2012 and became effective immediately.  It repeals Article VII of the Massachusetts Uniform Probate Code which governed certain aspects of trust administration.  The MUTC contains provisions that give trustees flexibility in administering trusts, reduce the necessity for court intervention and clarify the rights of the trust beneficiaries.  It applies to all trusts in existence before, on and after its effective date, with a few limited exceptions that are prospective only.  Many, but not all, of the provisions of the MUTC can be overridden by the terms of the trust instrument.

Here are some highlights of the MUTC: 

A Trustee's Duty to Provide Information to the Beneficiaries 

  • A trustee is required to notify the "qualified beneficiaries" of the trust within 30 days of a trust becoming irrevocable or a trustee is appointed thereafter.
  • A trustee is required to provide information about the trust at the request of the beneficiaries.
  • Absent a contrary provision in the trust, a trustee must send annual and final accounts to a distributee or permissible distributee of trust income or principal and to other qualified beneficiaries upon request.
  • A qualified beneficiary is defined as:
    • a distributee or permissible distributee of trust income or principal; and
    • a distributee of trust income or principal if the trust terminated at the time a notice is required or an account is requested.
    • A beneficiary who has sent a trustee a request for notice shall be treated as a qualified beneficiary for notice purposes.
  • The requirements to provide notice and accounts, absent overriding provisions in the trust, are new statutory requirements.

Provisions Regarding Revocable Trusts

  • Unless the terms of a trust expressly provide that the trust is irrevocable, a trust is revocable. 
  • This is a change from prior law and is prospective only.
  • A person may commence a judicial proceeding to contest the validity of a trust that was revocable on the settlor's death within the earlier of:
    • one year after the settlor's death; or
    • 60 days after the trustee sent the person a copy of the trust and informed the person of the trustee's name and address and that the person has 60 days to commence a proceeding.

Actions by Trustees

  • Absent a contrary provision in the trust, trustees may act by majority decision.
  • This is a change from prior law which required trustees to act unanimously unless the terms of the trust provided otherwise, and is prospective only.

Virtual Representation 

  • Absent a conflict of interest:
    • In some matters personal representatives and trustees can represent persons interested in an estate or trust.
    • Conservators and guardians can represent a ward/protected person.
    • Parents can represent their minor and unborn children, but not grandchildren and their issue.
    • A beneficiary with a substantially identical interest in the trust can represent unborn and unascertained beneficiaries.
  • Virtual representation is not limited to court proceedings.
  • This is a change to prior law and allows persons who lack legal capacity to be bound by representatives.
  • In court proceedings, the need for a guardian ad litem to represent minor and unborn issue may be eliminated.
  • Trustees will need to identify conflicts of interest and situations in which virtual representation is not appropriate.

Non-Judicial Settlement Agreements 

  • Trustees and beneficiaries may enter into a non-judicial settlement agreement to resolve questions regarding the construction or interpretation of a trust instrument; the powers, authority and/or liability of a trustee; the approval of accounts; the resignation or appointment of a trustee; and other issues.
  • The agreement will be valid if it does not violate a material purpose of the trust and includes terms and conditions that could properly be approved by a court.
  • Since these agreements do not require court approval (although a trustee or interested person may request court approval), this provision provides for the expeditious and economical resolution of conflicts, clarification of terms, trustee powers and the like.

Modification and Termination of a Trust 

  • If the settlor and beneficiaries consent, a court may approve the modification or termination of a non-charitable trust even if it is inconsistent with a material purpose of the trust.
  • The court may terminate or modify a non-charitable irrevocable trust with the consent of all the beneficiaries if the court concludes that modification or termination is not inconsistent with a material purpose of the trust.

Court Removal of a Trustee 

  • All of the qualified beneficiaries may petition a court to remove a trustee without cause.
  • The court will grant such a petition if it determines that removal serves the interests of all beneficiaries and is not inconsistent with a material purpose of the trust.
  • Under prior law, a trustee could only be removed for cause.

Time Limits on Commencing Legal Proceedings Against a Trustee 

  • Actions against a trustee in connection with a final account must be commenced within the first to occur of the following:
    • Six months after a beneficiary's actual receipt of a final account that fully discloses material matters.
    • Three years after a beneficiary actually received a final account and was informed of the location of the trust records for review, even if the account does not fully disclose a material matter.
    • A beneficiary may not commence a proceeding against a trustee for breach of trust more than three years after the date the beneficiary or his/her representative knew or reasonably should have known of the existence of a potential claim for breach of trust.

Miscellaneous

  • Trustees are granted a broad set of statutory powers unless the terms of the trust provide otherwise, which must be reviewed in conjunction with the powers granted in the trust document.
  • An exculpatory provision drafted or caused to be drafted by a trustee may be invalid unless the trustee proves that its existence and contents were adequately communicated to the settlor.
  • The settlor of a charitable trust may sue to enforce the trust.

We are available to answer your questions about the MUTC and to review trust instruments to determine how individual trusts are impacted by the statute.

Goodwin Procter LLP is one of the nation's leading law firms, with a team of 700 attorneys and offices in Boston, Los Angeles, New York, San Diego, San Francisco and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability.

This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. © 2012 Goodwin Procter LLP. All rights reserved.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Mary-Kathleen O’Connell
 
In association with
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.