Winter 2013: New Trust and Probate Codes

In 2012, both the Massachusetts Uniform Probate Code (the “MUPC”) and the Massachusetts Uniform Trust Code (the “MUTC”) were enacted or more fully implemented and integrated. The goal of each of these new codes is to streamline and simplify the probate process in Massachusetts, as well as expand upon current trust law.

While many of the new provisions have been enacted to somewhat streamline the estate administration process, we anticipate that the new and expanded rules relating to trustee duties could have a substantive impact on estate planning. Under the MUTC, trustees must now keep the qualified beneficiaries of a trust reasonably informed of trust administration. A qualified beneficiary is a person or entity who or which is entitled to a distribution of trust income or principal, or would be entitled to trust income or principal if the trust were to terminate today. Unlike prior law, this expanded definition of beneficiaries could include contingent beneficiaries under a trust.

Further, within the later of 30 days after accepting trusteeship, or the date on which the trust becomes irrevocable, a trustee is now required to inform the qualified beneficiaries, in writing, of the trustee’s name and address. In addition, a trustee must now send statements of account to current beneficiaries at least annually and at the termination of the trust. While the new trustee duties may seem onerous, it is permissible to draft a trust instrument in which the grantor directs that these requirements be modified.

In addition, the grantor of a trust may, by the terms of the trust instrument, allow his or her agent, appointed under a duly executed power of attorney, to revoke or amend the trust, and distribute trust property, if these powers are available to the grantor pursuant to the terms of the trust. The agent must also be expressly authorized to exercise such powers by the grantor’s power of attorney instrument.

Finally, the MUPC allows for a simplified estate administration process in many cases. Under prior law, estates not exceeding $15,000.00 could potentially utilize the simplified process. Under the MUPC, the threshold has been raised to $25,000.00.