Tuesday, February 1, 2022
In the matter of the Colecchia Family Trust, The litigation was focused on an irrevocable, income-only/use-only trust "under which the equitable property rights of remaindermen had vested ab initio." The Massachusetts Court of Appeals had to decide whether trustees were accountable to the remaindermen during the lifetimes of the current beneficiaries. The Court ultimately found that they were not.
According to Charles E. Rounds, there are two major reasons why the Court made the wrong decisions:
First, equitable non-possessory property rights in the remainder in corpus had vested ab initio. Second, the trustees had had a background overarching enforceable equitable duty to act in the interests of all beneficiaries, not just the current ones. See Massachusetts UTC §105(b)(2).
Apparently the Uniform Trust Code's qualified-beneficiary concept has been an issue for multiple courts, including the Appeals Court in Massachusetts.
See Charles E. Rounds, Jr., The Uniform Trust Code’s qualified-beneficiary concept confuses yet another court, JD Supra, January 1, 2022.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.