Distributions, discretion and "per stirpes" under Massachusetts law

How discretion is judged

G.L. c. 203E, § 814(a) provides that, notwithstanding the broad discretion the terms of a trust grant a trustee — including terms such as "absolute", "sole" or "uncontrolled" — the trustee exercises a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries. Unless the terms expressly indicate otherwise, a beneficiary other than a settlor who is also a trustee may make discretionary distributions for the trustee's personal benefit only under an ascertainable standard, and no trustee makes discretionary distributions to satisfy a legal obligation of support the trustee personally owes another person (§ 814(b)); a majority of the remaining trustees whose power is not so limited may exercise the power instead, and where every trustee's power is so limited the court may appoint a special fiduciary to exercise it (§ 814(c)). Those limits do not apply while the settlor may revoke or amend the trust, or to a power held by a settlor's spouse who is trustee of a trust for which a marital deduction was previously allowed (§ 814(d)).

Timing: the contest period, the creditors' year and the reserve

Upon the death of the settlor of a trust that was revocable at the death, G.L. c. 203E, § 604(b) provides that the trustee may distribute the trust property in accordance with the terms of the trust without liability unless the trustee knows of a pending proceeding contesting the trust's validity, or a potential contestant has notified the trustee of a possible contest and a proceeding is commenced within 60 days after the notification was sent. A contest is commenced within the earlier of 1 year after the death or 60 days after the trustee sent the person a copy of the trust instrument and the notice the statute describes (§ 604(a)); a beneficiary of a trust determined to have been invalid is liable to return any distribution received (§ 604(c)).

After the death, and subject to the settlor's right to direct the source of payment, the property of a trust that was revocable at the death is subject to the settlor's creditors, the funeral expenses and the statutory allowances to a surviving spouse and children to the extent the probate estate is inadequate (G.L. c. 203E, § 505(a)(3)); the trustee of a trust the decedent's creditors can reach answers only a creditor's action commenced against the trustee or the personal representative within 1 year after the date of death (G.L. c. 190B, § 3-803(a), (b)). On an event terminating or partially terminating the trust, the trustee proceeds expeditiously to distribute, subject to the right to retain a reasonable reserve for debts, expenses and taxes (G.L. c. 203E, § 817(b)); where the trust property totals less than $200,000, the trustee may terminate the trust after notice to the qualified beneficiaries on concluding that its value is insufficient to justify the cost of administration (§ 414(a)).

What "per stirpes" means in Massachusetts

Massachusetts's intestacy statute passes an estate to the decedent's descendants per capita at each generation (G.L. c. 190B, § 2-103(1)): equal shares at the nearest generation with a surviving descendant — one for each survivor there and one for each deceased member who left surviving descendants — with the deceased members' shares combined and divided the same way among their surviving descendants (§ 2-106(b)). The probate code gives an instrument's words their own meanings. Where a governing instrument calls for distribution "by representation" or "per stirpes", the property is divided into equal shares for the surviving children of the designated ancestor and the deceased children who left surviving descendants, each deceased child's share dividing in the same manner at each succeeding generation (§ 2-709(c)); "per capita at each generation" in an instrument has the generation-by-generation meaning (§ 2-709(b)). The trust's own words decide which rule applies; the distribution calculator models the arithmetic.

The statutes, verbatim

• Representation; per capita at each generation; per stirpes

  G.L. c. 190B, § 2-709 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Limitation on action contesting validity of revocable trust; distribution of trust property

  G.L. c. 203E, § 604 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Discretionary powers; tax savings

  G.L. c. 203E, § 814 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Distribution upon termination

  G.L. c. 203E, § 817 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

Can a Massachusetts trustee distribute right after the settlor's death?

Upon the death of the settlor of a trust revocable at the death, the trustee may distribute in accordance with the terms, without liability unless the trustee knows of a pending contest or a potential contestant's notification is followed by a proceeding within 60 days after it was sent (G.L. c. 203E, § 604(b)). The personal representative, and the trustee of a trust the decedent's creditors can reach, answer only a creditor's action commenced within 1 year after the date of death (G.L. c. 190B, § 3-803(a), (b)).

What does "per stirpes" mean in Massachusetts?

Where a governing instrument calls for distribution "by representation" or "per stirpes", G.L. c. 190B, § 2-709(c) divides the property into equal shares for the surviving children of the designated ancestor and the deceased children who left surviving descendants, each deceased child's share dividing the same way at each succeeding generation. Massachusetts's intestacy statute uses a different division, per capita at each generation (§§ 2-103, 2-106); how a particular trust's words read is a question for a licensed Massachusetts attorney of your choosing.

May a Massachusetts trustee keep a reserve before distributing?

Yes. On an event terminating or partially terminating the trust, the trustee proceeds expeditiously to distribute the trust property to the persons entitled to it, subject to the right to retain a reasonable reserve for the payment of debts, expenses and taxes (G.L. c. 203E, § 817(b)).

General information about Massachusetts law, not legal advice.