Chapter 524 has created
uncertainty in the law of trusts and estates and has compromised the ability of
parties to rely on the law in place at a given time in preparing estate plans,
making distributions from trusts, and advising clients with regard to trust
administration -- Boston Bar Association Amicus Brief Filed on April 30,
Picture this estate planning nightmare now playing out in
Mr. Smith established a trust to care for his daughter, Mary. Mary, in
turn, had one biological daughter and one adopted daughter. Under the law
as it stood when Mr. Smith set up his trust, only Mary's biological daughter
would be a beneficiary of Grandpa's trust. That was before 1958, when the term
"issue" was used to refer only to biological children.
Long after her father died, Mary turned to an attorney for guidance on
how best to compensate for this inequitable situation. She drafted a will
leaving her entire estate to her adopted daughter, and nothing to her biological
daughter, because her biological daughter would automatically receive an equally
generous sum from Mr. Smith's trust.
In 1958, an enlightened Massachusetts Legislature broadened the
definition of "issue" to include adopted children as well as biological
children. This legislation was not retroactive, however, and Mary was therefore
correctly advised that both of her daughters were still provided for
equally. Mary later died, secure in the belief that she had arranged for a
fair and equal allocation of the family assets between her two daughters.
Fast forward to 2008. The Massachusetts Legislature now passes
Chapter 524 of the Acts of 2008 -- amending the definition of "issue" to include
adopted children in pre-1958 trusts. What few people realize at the time is that
this new law also changes the property rights attached to that definition.
Thanks to Chapter 524, Mary's adopted daughter now has a windfall,
receiving the benefits of her mother's entire estate and also a one half
interest in Grandpa Smith's trust, which had previously belonged to her sister
alone. This is not the outcome Mary intended when she drafted her will.
In a case with similar facts now pending before the
Massachusetts Supreme Judicial Court, Rachel A. Bird Anderson v. BNY Mellon,
N.A., et al., SJC-11122, the Boston Bar Association has filed an amicus
urging the Court to clarify
estate planning law as it relates to Chapter 524.
As the brief notes, "Families often rely on [established principles of
construction] in making irrevocable alternate arrangements, such as gifts or
bequests made in favor of adopted children who were (until the effective date of
Chapter 524) not beneficiaries of certain family trusts."
The BBA amicus brief urges the SJC to provide answers to two important
Is the retroactive application of Chapter 524 to instruments executed
prior to 1958 constitutional?
If so, what are the consequences for actions taken by fiduciaries in
reliance on Chapter 524 prior to the SJC's determination that such an
application is constitutional?
The answers to both questions are of substantial importance to those
concerned with matters of estate planning and trust administration within the