Old Colony Trust Co. v. Rodd

• Decision Date: 09 January 1970
• Citation: 356 Mass. 584,254 N.E.2d 886
• Parties: OLD COLONY TRUST COMPANY, Trustee, v. Margaret L. RODD.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 886

254 N.E.2d 886

356 Mass. 584

OLD COLONY TRUST COMPANY, Trustee, v. Margaret L. RODD.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Nov. 5, 1969.

Decided Jan. 9, 1970.

John J. Graham, Boston, for respondent.

Haskel Cohn, Patricia Ann Metzer, Boston, with him, for petitioner.

Before SPALDING, CUTTER, KIRK and REARDON, JJ.

KIRK, Justice.

The respondent, a life beneficiary of a trust created by the will of George A. Sanderson, filed specifications of objection to the allowance of the fortieth and forty-first accounts of the petitioner as trustee under the will. After a hearing, the probate judge entered two decrees allowing the accounts. The respondent appeals, challenging the adequacy of the amounts paid to her by the trustee, the reasonableness of the trustee's accounting procedure, and the amount of its fees. Her attorney appeals from the denial of his petition to be allowed counsel fees from the trust assets.

Item 8 of Sanderson's will directed the trustee to pay over during the lives of designated beneficiaries 'such part of the income or principal as may be necessary in its judgment for the comfortable support of any one or more of said persons, provided that in the judgment of said trustee any one or more of said persons shall need assistance and shall be worthy of the same, it being my intention hereby to carry out as far as possible the wishes of my wife's father * * * as expressed to me on many occasions, namely, that he wished to see to the comfortable support and maintenance of his descendants.' The life beneficiaries of the fund were named persons (descendants of the testator's wife's father) 'and the children or grandchildren of any of the above named persons who may be living at the time of my decease and born prior to my decease' with one named exception, not here material. Item 8 further directed the trustee, at the death of the last survivor of the life beneficiaries, to transfer free of all trusts whatever remained of the fund 'in such proportions as said trustee will decide will accomplish the most good, unto such charities in said Boston, said Berlin * * * (in Massachusetts) and Kingston * * * (in Rhode Island) as said trustee shall select.'

We summarize the report of material facts made by the judge. The periods covered by the contested accounts are from November, 1963, through November, 1965. The book value of the trust, comprised of securities, is approximately $220,000, plus $30,000 in accumulated income to which a further accumulation of $3,500 in unexpended income was added during the accounting periods under consideration. The market value of the securities is approximately $423,000. During the accounting periods there were fifteen potential beneficiaries of the trust, three of whom were over eighty years of age, two between seventy-five and eighty, five between sixty and seventy-five, and the remaining five between forty and sixty. The trustee each year sent a questionnaire to each potential beneficiary in order to determine which if any of them required assistance. In instances where answers to the questionnaire were incomplete, the trustee made no further inquiry of the applicant in order to make an accurate determination of his net worth. The total paid to ten beneficiaries who requested assistance was $7,836 for the fortieth accounting period and $10,850 for the next period. One of the beneficiaries, who died during the accounting periods, who owned a home without a mortgage and had no other assets, was paid $100 a month, and $1,100 for hospital and medical expenses. Two other elderly beneficiaries, with incomes of $2,540 and $3,000, received monthly payments of from $35 to $50. Another elderly beneficiary, with an annual income of $1,985, received $50 a month plus $752.70 for the payment of medical bills. Two other beneficiaries had medical and dental bills paid. An army colonel, fifty years of age, married, and stationed in Europe, with an annual salary of $13,800, exclusive of allowances, received two payments of $500 toward the educational expenses of one of his two daughters. A married woman, age forty-six, whose husband's salary was $10,000 a year, received $500 and $1,500, in the fortieth and forty-first accounting periods, respectively, toward the educational expenses of her two children, seventeen and eighteen years of age. Another married woman, age forty-five, whose husband, a college professor, earned an annual salary of $16,500, received $500 and $1,250 in the fortieth and forty-first accounting periods, respectively, for educational expenses of her two children sixteen and eighteen years of age.

The respondent, age forty-seven, is single, with no dependents. She has no resources other than her salary. During the fortieth accounting period she was employed full time, and earned a gross salary of $4,625. The trustee paid her Federal income taxes, various personal bills, and an allowance of $65 a month, for a total of $2,074. In the forty-first accounting period she earned $5,292. The trustee again paid her Federal income taxes and various personal bills. For the last seven months of the period, her allowance was raised to $115 a month; the total disbursement to her for the year was $2,131.

The trustee charged a fee of five per cent of the income of the trust, and three-tenths of one per cent of the principal.

1. The judge found no facts to support the respondent's objections to the trustee's accounting procedure, investment practice, or the amount of its fees. We agree. The trustee was not obliged to adhere strictly to the accounting form supplied by the Probate Court. General Laws c. 206, § 2, requires only a reasonable and orderly statement of the account, and does not require rigid adherence to any method of accounting. Hutchinson v. King, 339 Mass. 41, 157 N.E.2d 525. The respondent also argues that the trustee's filing of the two accounts at the same time, some five months after the close of the forty-first accounting period, violated G.L. c. 206, § 1. That section provides that a trustee 'shall render an account * * * at least once a year * * * until his trust is fulfilled; but the court may at his request excuse him from rendering an account in any year, if satisfied that it is not necessary or...