The MUPC Strengthens Provisions that Provide Immediate Financial Relief to the Surviving Spouse and Dependent Children

Wednesday, April 18, 2012

This article was originally posted on the Trusts & Estates Section blog. Click here to read the original post.

By Michelle B. Kalas, Esq., Prince Lobel Tye LLP

The Massachusetts Uniform Probate Code (the “MUPC”) now entitles the surviving spouse, and any minor children or adult children who were supported by the decedent, to certain additional advance distributions from the estate to provide for their support beyond any provisions in the decedent’s will or under Massachusetts intestacy or elective share provisions. The MUPC replaces the prior Massachusetts statutory provisions for a “widow’s allowance,” which were extremely limited in scope and required a court appearance, with a broader entitlement that does not require a court appearance if the personal representative and surviving spouse can agree on the amount of the family allowance. By revitalizing archaic common law protections for financially needy spouses or dependent children, the MUPC has made relief feasible to obtain, now that the surviving spouse or dependent children no longer need to plead their case in court.

Common Law Background

In order to understand the rationale behind the form of this revival under the MUPC, it is important to understand the prior forms of protection available to the surviving spouse, who was historically presumed to provide and care for any minor children. The widow was a uniquely vulnerable figure under the common law property regime at the time of its inception during the feudal era.[1]  At first, under the common law, these protections took the form of an automatic life interest in one-third (1/3) of the husband’s real estate acquired during the marriage, called “dower,” which was superior to the rights of the husband’s creditors subsequent to the marriage and prevented the husband from transferring real estate subject to the dower interest during his lifetime without his wife’s consent. Dower was paralleled by the automatic life interest that a widower retained in all his wife’s real estate, called “curtesy,” which functioned as a continuation of the husband’s control over his wife’s property during her life. The widow’s paraphernalia, i.e. bedding, clothing, and personal adornments, and homestead right to remain in the residence were additional ancillary rights.[2]  

By the mid-20th century, most states had abolished dower and curtesy in their common law forms and instead replaced them with a gender-neutral statutory share of the deceased spouse’s entire estate, including personal property.[3] The statutory share was also called an “elective share,” since the surviving spouse had to elect the statutory share in lieu of any provisions made for the surviving spouse in the deceased spouse’s will. Unlike the dower or curtesy interests, the elective share does not vest automatically and is not distributed until after all debts and expenses of the estate are paid, often a year or more after the decedent’s death. For these reasons, the elective share statutes often include provisions for an immediate distribution from the estate for the basic support of the surviving spouse and any minor children in his or her care. In Massachusetts, this distribution was called a “widow’s allowance,” as a nod to the historical reasons for the statutory provisions. The “widow’s allowance” was amended by statute in 1978 to extend the provisions to a surviving spouse of either sex.

Prior Massachusetts Statutory Law

Under prior Massachusetts law, a surviving spouse could file a petition to have the probate court award him or her an allowance pursuant to M.G.L. c. 196, § 2 as the court deemed necessary and proper for his or her needs and those of the minor children in his or her care. M.G.L. c. 196, § 2 provided that:The surviving spouse's allowance was designed to provide for the necessities of the surviving spouse and minor children for a short period of time, until they had an opportunity to adjust themselves to their new situation.[4]

Such parts of the personal property of a deceased person as the probate court, having regard to all the circumstances of the case, may allow as necessaries to the surviving spouse and for the family under the care of such spouse or if there is no surviving spouse, to the minor children of the deceased, not exceeding one hundred dollars to any child, and also such provisions and other articles as are necessary for the reasonable sustenance of the family, and the use of the house of the deceased and of the furniture therein for six months next succeeding the death, shall not be taken as assets for the payment of debts, legacies or charges of administration. After exhausting the personal property, real property may be sold or mortgaged to provide the amount of allowance decreed, in the same manner as it is sold or mortgaged for the payment of debts, if a decree authorizing such sale or mortgage is made, upon the petition of any party in interest, within one year after the approval of the bond of the executor or administrator.
The surviving spouse's allowance took precedence over all debts and expenses of the estate, regardless of whether or not an estate was insolvent.[5] The allowance took priority even over the expenses of the decedent’s last illness and funeral and the expenses of administering the decedent’s estate.[6] Even if the spouses were living separately at the time of the decedent’s death, this fact, and the cause of the separation, would have been irrelevant to the determination of any allowance under prior law.[7] No notice was generally required for the court to order an allowance to a surviving spouse.[8]

Family Protections under the MUPC

The MUPC explicitly abolishes the estates of dower and curtesy[9] and repeals M.G.L. c. 196, §§ 1 &2,[10] and replaces them with new family protections.[11] The MUPC’s family protections are in addition to, and are not charged against, any share of a decedent’s intestate estate, distribution under a decedent’s will (unless otherwise provided in the will), or elective share of a decedent’s estate.[12] 

If a decedent dies domiciled in Massachusetts, the surviving spouse or decedent’s children, if there is no surviving spouse, are entitled to receive $10,000 of exempt property.[13] The decedent’s children would receive the property jointly, regardless of whether they are adults or minors.[14] The $10,000 comes first from the equity[15] in household furnishings, automobiles, furnishings, appliances, and personal effects, as long as the estate is sufficient and the item is not specifically devised.[16] If the equity in these assets is less than $10,000, then the remaining balance may be taken from any other assets of the estate.[17] The surviving spouse also retains the right to remain rent-free in the house of the decedent for 6 months from the date of death (referred to later in this article as the “homestead allowance”).[18]

In addition to the right to exempt property, there is a discretionary family allowance, in order to provide support to the decedent’s immediate family during the period of administration.[19] The personal representative may choose to pay the family allowance to the surviving spouse, if all minor or dependent adult children reside with the surviving spouse.[20] If there is no surviving spouse, then the personal representative may choose to pay the family allowance to or for the benefit of any minor or dependent adult children.[21] If there is a surviving spouse but any minor or dependent adult children do not reside with him or her, the personal representative may choose to pay the family allowance partially to the surviving spouse and partially to or for the benefit of any minor or dependent adult children, as the personal representative determines based on their respective needs.[22]

The allowance is a monetary one and must be in a total amount that is “reasonable.”[23] Unless the court orders otherwise, a “reasonable” amount cannot exceed a lump sum payment of $18,000 or monthly payments of $1,500 for up to one year.[24] The personal representative has the discretion to determine the amount and terms of the family allowance unless there is a supervised administration, in which case court approval is required; but the personal representative or an aggrieved interested person can always file a petition with the court requesting that the court determine the family allowance.[25] This is both a remedy for an interested person who is unhappy with the personal representative’s decision and a means for the personal representative to avoid any potential liability resulting from the personal representative’s distribution of the family allowance, in the event of an unsupervised administration.

In the Comment to the Uniform Probate Code, Section 2-404, Family Allowance, the Commissioners state as follows:

In determining the amount of the family allowance, account should be taken of both the previous standard of living and the nature of other resources available to the family to meet current living expenses until the estate can be administered and assets distributed. While the death of the principal income producer may necessitate some change in the standard of living, there must also be a period of adjustment. If the surviving spouse has a substantial income, this may be taken into account. Whether life insurance proceeds payable in a lump sum or periodic installments were intended by the decedent to be used for the period of adjustment or to be conserved as capital may be considered. A living trust may provide the needed income without resorting to the probate estate. Obviously, need is relative to the circumstances, and what is reasonable must be decided on the basis of the facts of each individual case. [26]
Impact of New MUPC Provisions on Practitioners

What does all of this mean for practitioners?
  • The personal representative should be aware of this new responsibility to provide for the support of the surviving spouse and any minor or adult dependent children during the period of administration. In other words, since the family allowance has priority over devisees under the will, any unsecured creditors of the estate, the expenses of the estate administration, and the expenses of the decedent’s last illness and funeral, the personal representative should set aside funds for the family allowance before paying any of these other expenses.
  • In addition, if the decedent had significant liabilities or an estate is insolvent, these allowances provide additional protection to the surviving spouse and any minor or adult dependent children, since they take priority over transfers resulting from rights of survivorship or payable on death designations (if the allowances are claimed within one year of the decedent’s death), any unsecured creditors of the estate, the expenses of the estate administration, and the expenses of the decedent’s last illness and funeral, and should be claimed as soon as possible by the family members. 
  • In the case of a small estate subject to the MUPC’s voluntary administration procedures, the personal representative can distribute the exempt property and the family allowance without giving notice to creditors, if the entire value of the estate minus liens and encumbrances does not exceed the homestead allowance, exempt property, family allowance, costs and expenses of administration, funeral expenses, and the expenses of the decedent’s last illness.[27] 
  • In order to limit these rights, a spouse can provide in his or her will that the exempt property and the family allowance must be charged against the beneficiary’s share of the estate. However, this only serves as a restriction if the surviving spouse is actually provided for in the deceased spouse’s will. A disinherited spouse or a spouse that otherwise elects against the will will receive a net increase in the amount of property received from the estate above and beyond the elective share that he or she would otherwise receive. 
  • A person who does not want his or her spouse to be able to claim the exempt property right, homestead allowance or family allowance under any circumstance might consider negotiating a prenuptial or postnuptial agreement that waives the surviving spouse’s entitlement to the family allowance.

[1] A husband could freely manage and spend his wife’s individual property during his lifetime under the doctrine of coverture and as the owner of an interest called jure uxoris, or “by right of his wife.”  After his death, a widow could not inherit any entailed real property from her husband, and her husband was free to give any of his individual property not subject to entailments to whomever he pleased in his will.  In a society where wives were often significantly younger than their husbands and overall mortality rates were high, there was a high probability that a married woman would be widowed and left with assets insufficient to support her and any minor children in her care.  As a result, early in the feudal era, the common law developed protections for the widow, in order to mitigate the harshness of a system where men, in general, owned a larger portion of the individual property in the marital estate and had control of their wives’ own individual property.

[2] See Development of Common Law Dower, George L. Haskins, 62 Harv.L.Rev. 42 (1948) (providing an analysis of the development of the dower right during the feudal period in England).

[3] See Opinion of the Justices, 337 Mass. 786 (1958) (discussing the rationale behind the curtailing of dower and curtesy by statute). Although curtesy was completely abolished by statute in 1978, statutory dower, although limited to the real estate in the decedent’s probate estate and redefined to be available to either spouse, was not abolished in Massachusetts until the passage of the MUPC.

[4] See Townsend v. Wood, 342 Mass. 481 (1961).

[5] See Hooker v. Porter, 273 Mass. 316 (1930).

[6] See Kingsbury v. Wilmarth, 84 Mass. 310 (1861).

[7] Chase v. Webster, 168 Mass. 228 (1897).

[8] See Wright v. Wright, 95 Mass. 207 (1866). 

[9] M.G.L. c. 190B, § 2-112.

[10] Section 10 of the MUPC repeals M.G.L. c. 196.

[11] M.G.L. c. 190B, §§ 2-403 - 2-405.

[12] M.G.L. c. 190B, §§ 2-403 & 2-404.

[13] M.G.L. c. 190B, § 2-403(a).

[14] Id.

[15] Defined as the fair market value minus the amount of any security interest encumbering the asset.

[16] M.G.L. c. 190B, §§ 2-403(a) & 2-405.

[17] M.G.L. c. 190B, § 2-403(a).

[18] M.G.L. c. 190B, § 2-403(b).

[19] M.G.L. c. 190B, § 2-404(a).

[20] Id.

[21] Id.

[22] Id.

[23] M.G.L. c. 190B, § 2-404(a).

[24] M.G.L. c. 190B, § 2-405.

[25] M.G.L. c. 190B, § 2-405; see M.G.L. c. 190-B, § 3-504.

[26] UNIF. PROBATE CODE § 2-404 cmt. (amended 2008).

[27] M.G.L. c. 190B, § 3-1203.