Bongaards v. Millen

• Decision Date: 04 June 2002
• Docket Number: 99-P-1631
• Citation: 55 Mass. App. Ct. 51
• Parties: GEORGE BONGAARDS vs. NINA MILLEN(FN1) & others.(FN2) Docket No.: 99-MASSACHUSETTS COURT OF APPEALS County: Suffolk
• Court: Appeals Court of Massachusetts

GEORGE BONGAARDS vs NINA MILLEN¹ & others.²

Docket No.: 99-P-1631

MASSACHUSETTS COURT OF APPEALS

County: Suffolk

November 13, 2001.

June 4, 2002

Trust, Validity, Revocable trust, Real estate trust, Beneficiary, Termination, Savings bank account. Husband and Wife

Complaint for declaration of trust filed in the Suffolk Division of the Probate and Family Court Department on June 10, 1997.

The case was heard by Nancy Gould, J., on a motion for summary judgment.

Francis T. Mayo (George T. Andrews with him) for the plaintiff.

Susan E. Stenger (Harry S. Miller with her) for the defendants.

Present: Jacobs, Mason, & Kantrowitz, JJ.

JACOBS, J.

In her last will, Jean Bongaards stated that she had intentionally made no provision for her husband, George Bongaards. Following Jean's death, George filed a complaint for declaratory judgment in the Probate and Family Court seeking a determination that real estate purportedly held in trust by her be treated as a part of her estate for purposes of his spousal claim under G. L. c. 191, § 15.³ After a hearing on the parties' cross motions for summary judgment, the judge ruled, in effect, that the real estate was trust property not subject to a spousal claim, and entered judgment in favor of the defendants.⁴

Background. In 1978, Josephine D'Amore, Jean's mother, created the 291 Commonwealth Avenue Trust and at the same time conveyed to the trust real estate in Boston consisting of an apartment building at that address. D'Amore then also declared herself the sole trustee and beneficiary of the trust during her life. Upon D'Amore's death, Jean would, if she accepted, become the sole trustee and the sole beneficiary during her life. About a year later, in 1979, D'Amore purported to convey the real estate to Jean by a deed signed by D'Amore as an individual, and running to Jean as an individual. The 1979 deed, which made no reference to the trust, was drafted by an attorney different from the one who had drafted the 1978 deed and trust. D'Amore died in July, 1979. Jean and the plaintiff continued to live in one of the apartments, as they had since their marriage in 1965, and Jean managed the property until her death in July, 1996. About ten days before she died, Jean executed an acceptance of appointment as trustee, a confirmatory deed of the real estate to herself as trustee, and an appointment of the remainder in trust in favor of her sister, Nina Millen.

Discussion. On appeal, the plaintiff argues several grounds in support of his claim that the real estate was not trust property. Additionally, he seeks a spousal share of a bank savings account (see note 4, supra).

1. Validity of the trust. Article II of the trust provides: "The original beneficiaries of this Trust are the persons listed as beneficiaries in the Schedule of Beneficiaries this day executed by them and the Trustee and filed with the Trustee; and the interests of the beneficiaries are as stated in said Schedule." The plaintiff asserts the trust was void ab initio for the lack of a beneficiary, noting that only D'Amore, as trustee, signed the schedule of beneficiaries, and that the trust instrument required the beneficiaries to execute that schedule. The schedule had been signed by D'Amore contemporaneously with the trust and clearly identified the beneficiaries by name or description and their respective interests.⁵ The provision for beneficiary signatures may not be read as a condition precedent to the validity of the schedule. The uncontroverted fact is that the schedule came into existence at the same time as the trust instrument and was signed by the person who was the settlor, sole trustee and only present beneficiary of the trust. Accordingly, the absence of beneficiary signatures relied upon by the plaintiff may not be equated with a lack of beneficiaries or a failure of contemporaneous identification. See 2 Scott & Fratcher, Trusts §§ 112 & 112.1 (4th ed. 1988). Compare Arlington Trust Co. v. Caimi, 414 Mass. 839, 848 (1993) (where the settlor never identified any beneficiary in writing, as required by the declaration of trust, the trust "never came into existence and the attempted conveyance fail[ed] for lack of a cognizable recipient"). At most, and to the extent Jean Bongaards may be regarded as an "original" beneficiary of the trust, the absence of her signature on the schedule is a purely technical failing and, at most, suggests that she then may have been unaware of her status under the trust. "[T]here is no principle of general application that knowledge or consent of the cestui que trust at the time is necessary to the validity of a declaration of trust." Stuart v. Sargent, 283 Mass. 536, 542 (1933). See Aronian v. Asadoorian, 315 Mass. 274, 276-278 (1943); Cohen v. Newton Sav. Bank, 320 Mass. 90, 93 (1946).

2. Effect of the 1979 deed. The plaintiff argues that the conveyance of the real estate in 1979 effectively terminated the trust as it transferred the only trust asset.⁶ He also cites circumstances he believes indicate that D'Amore intended to convey the property to Jean as an individual.⁷

The reason for the 1979 deed is not readily apparent from the record.⁸ On its face, the deed contains critical facts which are inconsistent with the 1978 deed conveying the property to the trust. The 1979 deed is signed by D'Amore individually, and not in her capacity as trustee. There is no description of the property as trust property. It states that D'Amore's title is derived not from the prior recorded deed to the trust in 1978, but from a 1962 deed to D'Amore which she cited as the origin of her title when conveying the property to herself as trustee. There is nothing in the 1979 deed indicating that the property was being conveyed free of the trust, nor is there any indication that D'Amore was then aware she had previously placed the property in trust. Signing the deed as an individual, and not as trustee, D'Amore could bind only herself and not the trust. See Rogaris v. Albert, 431 Mass. 833, 835-836 (2000), and cases cited. Because she previously conveyed the property to the trust in 1978, and the 1979 deed purported to convey title from the same source (i.e., the 1962 deed), the 1979 deed could convey nothing, and thus was a nullity. See Daly v. Donovan, 258 Mass. 226, 227 (1927) ("The grantor, however, not having title, her deed conveyed nothing").⁹

3. Management of the property. The plaintiff asserts that Jean treated the property as her own over some sixteen years, thereby confirming that it was not trust property. Although Jean did not, when D'Amore died, formally assume office as a successor trustee,¹⁰ there is no indication in the record that Jean maintained the property in a manner inconsistent with her duties as trustee. The indicia of individual ownership relied upon by the plaintiff relate merely to Jean's failure to identify herself as trustee or to identify the property as trust property, and are not reflective of any substantive failure to preserve the property for the future beneficiaries.¹¹ Also, many of the asserted indicia cannot be distinguished from the use of the property to which Jean was entitled as the beneficiary of a life estate. As such, she was "entitled to receive all of the net income of the Trust as shall be earned from year to year." Because there is no evidence that Jean failed to conform to her duties as trustee even though she had not formally accepted those duties, and no evidence that she wrongly acquired or retained for herself any assets or income, the property was not diverted from the trust.¹²

4. Extension of Sullivan v. Burkin. The plaintiff argues that Jean held such complete control over the trust property that it should be included in her estate under the principle of Sullivan v. Burkin, 390 Mass. 864 (1984).¹³ That case held that "the estate of a decedent, for the purposes of G. L. c. 191, § 15, shall include the value of assets held in an inter vivos trust created by the deceased spouse as to which the deceased spouse alone retained the power during his or her life to direct the disposition of those trust assets for his or her benefit, as, for example, by the exercise of a power of appointment or by revocation of the trust." Id. at 867. Significantly, however, the court expressly limited its holding to inter vivos trusts "created or amended after the date of this opinion." Ibid. The trust before us came into existence in 1978 and therefore is not governed by that decision.¹⁴ Instead, the trust is controlled by the case law prior to Sullivan v. Burkin, which placed the assets of an inter vivos trust beyond the reach of a spousal claim under G. L. c. 191, § 15, even when the deceased spouse had created the trust and alone had retained dispositive power over the trust assets. See id. at 870-871, and authorities cited.

Nevertheless, because the issue of the applicability of Sullivan v. Burkin, based on Jean's extensive control over the disposition of the trust property¹⁵ has been fully briefed, we make the following observations. Sullivan v. Burkin indicated that "[t]here may be a different rule if some or all of the trust assets were conveyed to such a trust by a third person." Id. at 873, citing Theodore v. Theodore, 356 Mass. 297, 299-300 (1969) (wife could not claim shares in trusts created by her husband who, although he had named himself as trustee, retaining control during his lifetime with full powers to revoke, amend, or alter the trusts, had not transferred or conveyed any of his property to the trusts, but was administering property placed in those trusts by others). The court also recognized that a "general power of appointment over assets in a trust created by a third person is said to present a different situation." Sullivan v. Burkin, supra at 873, citing a then-draft provision in the Restatement (Second) of Property: Donative Transfers, which now reads:

"Appointive assets are treated as owned assets of a deceased...