Planning for Life

Trust Means What It Says -- Massachusetts

Posted by Harry S. Margolis on January 9, 2013

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By Harry S. Margolis

In the unfortunate case of Liporto v. Liporto (Mass. Land Ct. No. 12, Misc. 462221 KCL, Nov. 13, 2012), the Massachusetts Land Court rules that there's no way around a trust's directive that the trust property be distributed at the death of the grantor or his wife, whichever is later. The case is unfortunate because the obstinacy of two of four brothers forced the litigation in the first place.

The trust in question holds two pieces of real estate in Hamilton, Massachusetts. At the death of the parents, the trust directs that the property be distributed equally to four sons, stating: "The Balance of the Grantor's trust estate shall be distributed equally to the Grantor's children, . . ."

The four sons also became trustees upon their father's death. Two of the brothers, however, resisted distributing and selling the real estate arguing (1) "that the Trust could be used to provide income to Mr. Liporto's children during their lifetimes," (2) "that there is no 'definite date for the distribution fo the Trust real estate,'" and (3) "that the Trust assets cannot be distributed until Mrs. Liporto's jewelry is transferred to the Trust and accounted for."

The Court rejects all three arguments. It states that the clear language of the trust directs the distribution of the trust property at the father's death (since he survived the mother).  His death in 2008 was the definite date for distribution. And the issue of the jewelry whether or not it should be deposited into the trust does not affect the obligation to distribute the trust property that can be ascertained.

(In a footnote, the Court comments that the fight between the two sets of brothers has to do with the jewelry and that the two brothers refusing to distribute and sell the real estate have been doing so to gain leverage in the fight over the jewelry as well as over accounting for expenses for maintaining the two parcels of real estate.)

While it's typical for wills and trusts to direct the distribution of property at the death of the grantor or another beneficiary, it often takes a year or more to wind up a trust's operations, sell property, file final tax returns, and make ultimate distributions of trust property. Beneficiaries have been known to get impatient and trustees to take longer than necessary, but outright refusal to move ahead as in this case is quite rare.

Topics: trusts

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