In re Macmackin Nominee Realty Trust

• Citation: 122 N.E.3d 1,95 Mass.App.Ct. 144
• Decision Date: 10 April 2019
• Docket Number: No. 17-P-1573,17-P-1573
• Parties: In the MATTER OF the MACMACKIN NOMINEE REALTY TRUST.
• Court: Appeals Court of Massachusetts

95 Mass.App.Ct. 144

122 N.E.3d 1

In the MATTER OF the MACMACKIN NOMINEE REALTY TRUST.

No. 17-P-1573

Appeals Court of Massachusetts, Dukes..

Argued October 2, 2018

Decided April 10, 2019

Daniel C. Perry, New Bedford, for the respondents.

Eric L. Peters for the petitioner.

Present: Massing, Neyman, & Ditkoff, JJ.

NEYMAN, J.

In this appeal, we are asked to review a decree issued by a judge of the Probate and Family Court terminating a nominee trust under the Massachusetts Uniform Trust Code (MUTC), G. L. c. 203E. We conclude that termination was warranted pursuant to § 412 (a ) of the MUTC, and thus affirm.

Background. The present case involved six vacant lots located "adjacent to and between" two summer cottages on Martha's Vineyard. For many decades, the cottages and the lots were owned by, or held in trust for the benefit of, members of the MacMackin family, including Alice MacMackin (Alice) and her husband Stuart MacMackin (Stuart). Alice and Stuart had two daughters, Cynthia¹ and Janet. Cynthia married Ivo Meisner (Ivo) in 1967 and they had two sons, Eerik and Ian (collectively, the Meisners). Cynthia and Ivo divorced in 2006. Janet married James Wansack and they had three children, Andrew, Heather, and Karen (collectively, the Wansacks).

While Alice and Stuart were alive, the cottages and lots were used as a family compound.² Stuart died in 1983, and Alice died in 2009.

Following Alice's death, disputes arose between the Meisners and the Wansacks over the vacant lots and two cottages. In 2015, the sides resolved the quarrel over the two cottages by a settlement agreement, through which Janet purchased the Meisners' interest in both cottages. However, the dispute over the vacant lots, which were held in the nominee trust discussed infra, lingered and triggered the present litigation. We begin with a brief overview of the legal instruments related to the disposition of the vacant lots.

1. Stuart's will and testamentary trust. Under the terms of his will, Stuart established a testamentary trust and devised to this trust the cottages and vacant lots. His will expressed his "wish if practicable that these summer homes and lots be kept undivided in the family and used as they are now for as long as that is possible and practicable." His will further expressed his desire, "if that be practicable under the circumstances," that, upon the death of Cynthia and Janet, the testamentary trust continue and the cottages and lots be maintained for the benefit of his grandchildren.³ Despite these provisions, the parties did not dispute that upon Stuart's death in 1983, the vacant lots passed directly to Alice and were not governed by the provisions of Stuart's will or testamentary trust.⁴ The cottages, however, remained in the testamentary trust until Janet purchased the Meisners' interest in both cottages in 2015.

2. MacMackin Nominee Realty Trust. On December 23, 1994, Alice and Ivo,⁵ as trustees, created the MacMackin Nominee Realty Trust⁶ (MacMackin trust),⁷ to which Alice transferred the vacant lots.⁸ The vacant lots were the only assets of the MacMackin trust, which was never otherwise funded, apart from a nominal ten dollars.

The MacMackin trust provided that the trustees held any trust property for the sole benefit of the beneficiaries and acted only as directed by all of the beneficiaries. The trust further provided that it may be terminated at any time by agreement of all of the beneficiaries but, in any event, shall terminate twenty years after the death of Alice or Ivo, whichever is later. The operative schedule of beneficiaries specified that the Wansacks together held fifty percent of the beneficial interest, while Cynthia's two sons and Ivo held the other fifty percent.⁹ Janet and Cynthia paid the taxes on the vacant lots until 2001, thereafter Stuart's testamentary trust paid the taxes through 2013, and Cynthia and Janet subsequently shared the tax payments until the summer of 2015. The judge found that the combined yearly real estate taxes for the vacant lots was $ 6,447.

3. Petition to terminate the MacMackin trust. As discussed supra, Janet purchased the Meisners' interest in the two cottages, at which time they were deeded to Janet and the testamentary trust was terminated.¹⁰ However, the Wansacks and Meisners wrangled over the appropriate disposition of the vacant lots held in the MacMackin trust. Their ongoing dispute led to the present litigation. Specifically, Ivo, in his capacity as trustee and beneficiary of the MacMackin trust, and with the assent of his sons, filed a petition in the Probate and Family Court to terminate the trust. The petition alleged that termination was proper under G. L. c. 203E, §§ 411, 412, and 414. In an attachment to the petition, Ivo asserted that the MacMackin trust "no longer serves any useful purpose, ... lacks any financial assets to meet the requirements of administration, ... [and] should be dissolved and the ownership thereof converted to tenancies in common, in the respective percentages of the beneficiaries." The Wansacks opposed the termination of the trust and any sale or development of the vacant lots.

After a trial, the judge issued written findings in which he concluded that Alice and Stuart wanted to create a place for family gatherings, but that Alice, the settlor of the MacMackin trust, did not anticipate one daughter's family "buying out" the other daughter's family interest in both cottages "for a significant purchase price." The judge further found that, upon the "sale of the cottages to Janet Wansack, the Meisners no longer have cause or desire to vest any funds into the preservation of the vacant lots (i.e., payment of real estate taxes) and therefore, the [MacMackin trust] would be rendered unproductive and uneconomical." Citing to §§ 411 and 412 of the MUTC, the judge determined that "[t]he material purpose for which the [MacMackin trust] was created, to facilitate a family compound, is no longer viable and therefore, continuation of the [MacMackin trust] is not necessary to achieve any material purpose of the [MacMackin trust]."¹¹ Through an amended decree, the judge ordered termination of the MacMackin trust and distribution of the three lots closest to the cottages to the Wansacks and the other three lots to the Meisners, according to their beneficial interests. The judge also awarded $ 21,385.28 in legal fees and costs to Ivo pursuant to G. L. c. 215, § 45, noting that he, the judge, had taken into consideration the written settlement offer extended by Ivo before trial. The Wansacks have appealed from the amended decree.

Discussion. The Wansacks contend on appeal that the judge erred in terminating the MacMackin trust because (1) Stuart and Alice did in fact anticipate one daughter's family purchasing the other daughter's family interest in the cottages, and (2) Stuart and Alice intended to conserve the lots in their natural state. They maintain that the vacant lots were always intended to protect the privacy and enjoyment of the cottages, preserving privacy is a material purpose of the MacMackin trust, termination would violate the purpose of the trust and flout Alice's and Stuart's intent on maintaining a family compound, and thus the MacMackin trust should continue pursuant to its terms.

The Meisners respond that (1) the evidence at trial showed that Alice only intended that both families share equal ownership in the cottages and vacant lots, and (2) there was no conservation purpose to the MacMackin trust. They further contend that now that the Wansacks own both cottages, the vacant lots provide no benefit to the Meisners, and continuation of the MacMackin trust would be impracticable or wasteful as it no longer serves any useful purpose. We agree with the position articulated by the Meisners, and hold that the judge properly terminated the MacMackin trust under G. L. c. 203E, § 412 (a ).

1. Termination of the MacMackin trust. a. Applicability of the MUTC. In determining whether the judge properly terminated the MacMackin trust, we first look to the plain language of the trust instrument. See Ferri v. Powell-Ferri, 476 Mass. 651, 654, 72 N.E.3d 541 (2017). As discussed infra, the MacMackin trust provides that it may be terminated (1) by agreement of all of the beneficiaries, or (2) twenty years after the later of the death of Alice or Ivo. Neither condition for termination had been met when Ivo filed his petition to terminate the trust.

Having determined that the MacMackin trust could not be terminated pursuant to its own terms, we next consider whether there was another legal basis for termination. This requires us to consider whether the MUTC applies to the present case. For the reasons delineated below, we conclude that it does.

First, both parties conducted their analysis under the MUTC, and neither disputes its applicability to the MacMackin trust. Indeed, the Wansacks contend that, as "it is undisputed that the [MacMackin] trust was created by Alice MacMackin for donative purposes, chapter 203E appears to govern its administration." We agree.

The MUTC, effective July 8, 2012, provides distinct statutory bases for termination of trusts in certain circumstances. See G. L. c. 203E, §§ 410 - 412, 414. Although the MUTC states the general rule that the terms of a trust prevail over any provision of the MUTC, a specific exception to that rule is "the power of the court to modify or terminate a trust under sections 410 to 416, inclusive."

G. L. c. 203E, § 105 (b ) (4). Pursuant to its enabling legislation, "[e]xcept as otherwise provided in this act," the MUTC's provisions "shall apply to all trusts created before, on or after the effective date of this act." St. 2012, c. 140, § 66 (a ) (1). Furthermore, the MUTC provides, in relevant part, that "[t]his chapter applies to express trusts, charitable or non-charitable, of a donative nature." G. L. c. 203E, § 102. See Passero v. Fitzsimmons, 92 Mass. App. Ct. 76, 79-81, 81 N.E.3d 814 (2017) (MUTC governed...