Ventura v. Ventura

• Decision Date: 20 June 1990
• Citation: 555 N.E.2d 872,407 Mass. 724
• Parties: Edythe F. VENTURA et al. 1 v. Joseph VENTURA et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 872

555 N.E.2d 872

407 Mass. 724

Edythe F. VENTURA et al. ¹ v. Joseph VENTURA et al. ²

Supreme Judicial Court of Massachusetts,

Middlesex.

Argued Dec. 5, 1989.

Decided June 20, 1990.

Marcus E. Cohn, Beth A. O'Neill, Boston, with him, for Edythe F. Ventura.

Richard J. Plouffe, for Bernard Bradley and others, joined in a brief.

Judy A.S. Metcalf and Nelson P. Lovins, Woburn, for Joseph Ventura & another, submitted a brief.

Before LIACOS, C.J., and ABRAMS, NOLAN, O'CONNOR and GREANEY, JJ.

LIACOS, Chief Justice.

On March 6, 1967, Joseph V. Ventura executed a document entitled "Declaration of Trust of the J.V. Realty Trust" (trust instrument), which purported to hold in trust certain real estate for a term of twenty years. The document appointed Joseph V. Ventura as the sole trustee, and named as beneficiaries his future wife, Edythe F. Ventura, her son, Bernard Bradley, and his children, Joseph Ventura, Susan Ventura, Paul Ventura, and Diana Ventura. Joseph V. Ventura died testate on January 14, 1983. Edythe Ventura was appointed executrix of Ventura's estate and is the sole legatee under his will. Pursuant to the provisions of the trust instrument the Probate Court appointed Edythe Ventura successor trustee of the J.V. Realty Trust.

On July 8, 1987, Joseph and Paul Ventura (appellees) brought suit in Superior Court against their mother, Edythe F. Ventura, alleging, inter alia, that she had fraudulently conveyed certain property of the trust and that she had breached her fiduciary duty as trustee by failing to distribute trust assets and by failing to render an accounting. On February 9, 1988, Edythe Ventura, Bernard Bradley, Susan Ventura, and Diana Ventura (appellants) filed a complaint in the Probate Court seeking a declaration that: (1) the trust instrument was insufficient as matter of law to create a valid trust, and (2) any conveyances of trust property carried out by Edythe Ventura were consistent with her duties to dispose of the property under the law.

Both of these actions were assigned by the Chief Administrative Justice to be heard by a judge of the Superior Court who was designated to sit simultaneously as judge of the Superior Court and of the Probate and Family Court Departments. On April 22, 1988, the appellants filed a motion in the Superior Court for partial judgment on the pleadings seeking a determination that the trust was invalid and that a resulting trust arose in favor of the settlor, Joseph V. Ventura, and his successor in interest, Edythe F. Ventura. Mass.R.Civ.P. 12(c), 365 Mass. 754 (1974). In response to appellants' motion, the judge ruled that the trust instrument created a "valid inter vivos discretionary trust." He also found that the settlor "apparently ... did not anticipate that at the end of the twenty year term of the trust the trust res would not be exhausted," and held that a resulting trust in favor of the settlor's estate arose regarding remaining trust property. He reported his decision to the Appeals Court. We took the case on our own motion.

Our review is limited to two issues. First, we must determine whether the trust instrument created a valid trust. Second, we must declare the proper disposition of any of the property described in the trust instrument which remains unexhausted, regardless of our determination as to the validity of the trust.

1. Validity of the trust. The appellants claim that the trust instrument fails to describe the nature and extent of the beneficiaries' interest in the trust property with sufficient certainty. The trust must fail, they argue, because this lack of certainty invested the trustee with unbridled discretion to ignore the interests of the beneficiaries and thereby failed to satisfy the requirement that a trust create for its beneficiaries equitable rights in the trust property. We disagree.

"Whether a trust is created depends primarily upon the manifestation by the [settlor] of an intention to create a trust." Russell v. Meyers, 316 Mass. 669, 672, 56 N.E.2d 604 (1944). In order for a trust to be valid in the Commonwealth, it must "unequivocally show an intention that the legal estate be vested in one person to be held in some manner or for some purpose on behalf of another." Cooney v. Montana, 347 Mass. 29, 35, 196 N.E.2d 202 (1964). In the case of an express trust, such as is alleged in the present case, this intention to separate legal and equitable control over particular property should be "ascertained from the language of the whole [trust] instrument considered in the light of the attendant circumstances." Harrison v. Marcus, 396 Mass. 424, 429, 486 N.E.2d 710 (1985).

The trust instrument declares that the settlor, Joseph V. Ventura, holds title to several parcels of real estate as the sole trustee of the J.V. Realty Trust, and that he holds the real estate "upon the following trusts and with the following powers." The trust instrument states that the trustee, in order to "hold, manage and improve" all property subject to the trust, may sell, lease, convey and mortgage any and all property held by the trust. The trustee is also given the authority to enter into contracts regarding trust property, and to hire officers for the transaction of the business of the trust. In the case of the trustee's death, incapacity, or resignation, the trust instrument allows the appointment of a successor trustee by any court of competent jurisdiction. By the terms of the trust instrument, the trust is irrevocable, and will terminate after twenty years. However, the trust instrument entitles the trustee to exercise his authority as trustee even after the termination of the trust if necessary to wind up the affairs of the trust.

The trust instrument identifies the beneficiaries of the trust as "Edythe F. Ventura, wife of said trustee, Bernard Bradley, the son of the wife of said Joseph V. Ventura, Joseph V. Ventura, Jr., son of said trustee, Susan Ventura, daughter of said trustee, Paul Ventura, son of said trustee and Diana Ventura, daughter of said trustee." At the time the trust instrument was signed, all of the children of Joseph V. Ventura and Edythe F. Ventura were minors. The trust instrument entitles the beneficiaries to such income of the trust estate as the trustee shall declare "at such times as he deems meet and proper." The trustee's decision as to the amount of distributions of income is final. If any beneficiary dies during the term of the trust, then the "executors, administrators or assigns" of that beneficiary will succeed to all of his or her rights in the trust.

We are of opinion that the settlor, through the language of the trust instrument, has sufficiently manifested "an intention to create a trust." Russell v. Meyers, supra 316 Mass. at 672, 56 N.E.2d 604. The trust instrument clearly defines the res of the trust, the duration of the trust, the beneficiaries of the trust, the powers of the trustee over trust property and the trustee's duties in relation to the trust. The appellants, however, argue that, irrespective of the settlor's intention to create a trust, no legal trust was actually created because the trust instrument allows the trustee uncontrolled discretion in determining the extent of the beneficiaries' interest in the trust. The appellees respond that the trustee's discretion regarding the beneficiaries' interest is limited by the fiduciary obligations inherent in a trustee-beneficiary relationship. They claim that the trustee's discretion is not absolute because the trustee's fiduciary duty provides boundaries outside of which the trustee's discretion may not stray.

This court has recognized that "even very broad discretionary powers are to be exercised in accordance with fiduciary standards and with reasonable regard for usual fiduciary principles." Old Colony Trust Co. v. Silliman, 352 Mass. 6, 10, 223 N.E.2d 504 (1967). We have stated that "[a] fair reading of the whole of most trust instruments will reveal a 'judicially enforceable, external, and...