J. Green
HISTORY: A judge of the Housing Court, sitting by
designation in Superior Court initially denied the parties’ cross motions for
summary judgment because there were questions of fact concerning Mildred’s (grantor)
intent to deliver either the 1996 amendment or the 2005 amendment. The judge determined that the amendments were
effective because at the time she executed both amendments, she was both
grantor and sole trustee of the trust and delivery was automatic upon
completion of her signature. The plaintiff
trustee appeals from this summary judgment ordering her to convey property to
the defendant.
FACTS: Mildred, as grantor, established a revocable inter vivos trust on April 1, 1992,
under a trust agreement. The trust named
Mildred as sole trustee of the trust, and named her daughter, Barbara A.
McEachern (Barbara) as the successor trustee in the event of Mildred’s
resignation or incapacity.
Under
article III, pars. A-D, the trustee was to distribute the trust estate
proportionally among four beneficiaries upon Mildred’s death. The last paragraph of this article expressly
stated that Mildred intentionally left out her son, the defendant, Thomas P.
Budnick. Mildred reserved the right to
make changes while she was still living and competent at any time and from time
to time by an instrument in writing, signed and acknowledged by Grantor and
delivered to the Trustee under article II, par. D of the trust agreement.
In 1996,
Mildred hired an attorney to prepare a written amendment to the trust
agreement, which deleted the last paragraph of article III (…that the grantor
intentionally made no provision for Thomas).
It was replaced with her intention of distributing real estate property
to Thomas. She signed this amendment
before a notary public while at the Attorney’s office, but then asked for the
original document to hold “until she made up [her] mind as to whether or not
she wished to change the trust as it applied” to Thomas. She never returned the document to the
attorney, it was never recorded with the registry of deeds, and its current
location is unknown.
On July 7,
2005, Mildred asked the same attorney to prepare an amendment to the trust
agreement. Like the amendment in 1996,
the 2005 amendment replaced the last paragraph of article III of the trust
agreement with a paragraph distributing the same real estate property upon her
death. She signed this 2005 amendment in
front of a notary public while in the attorney’s office along with other
documents including a quitclaim deed conveying to the trust the property, a
health care proxy, and a new will under which Thomas was to receive whatever
vehicle Mildred owned at the time of her death.
Mildred told the attorney to record the deed conveying the property to
the trust but just like she did in 1996, she took the original executed 2005
amendment with her “until she made up her mind about adding Thomas to the
trust.” Since he had been
institutionalized for mental illness and served jail time as well, she was
still unsure.
Mildred
died February 27, 2007 and by December 5, 2008, Barbara tried to evict Thomas
from the property through Housing Court.
He stated he was the rightful owner under the trust as amended. The case was then transferred to Superior
Court and the appeal followed.
ISSUE: Does the execution of an amendment to a trust
instrument by a person who is both trustee and settlor of a trust automatically
constitute delivery of the instrument of amendment with no regard to evidence
proffered to demonstrate intent to complete delivery?
No. The parties are divided on the question of
delivery. Delivery of a written
instrument amending a trust (as a deed of conveyance) is a question of intent. See
Kirschbaum v. Wennett, 60 Mass. App. Ct. 807, 813 (2004). It does not necessarily refer to possession
of the instrument or to transfer the document hand to hand. A person’s intent is a question of fact, “to
be determined from his declarations, conduct and motive, and all the attending
circumstances.” Galotti v. United
States Trust Co., 335 Mass. 496, 501 (1957).
Whether the
1996 amendment or 2005 amendment was delivered cannot be found on the summary
judgment record. There is evidence that
Mildred expressed intent that each amendment not be effective until after she
gave it more thought even though she signed each one. Thomas argues that insisting on proof of
delivery is unnecessary because Mildred was both settlor of the trust and its
sole trustee.
Thomas’ argument ignores the
express terms of the trust stating that delivery is a necessary precondition to
any amendment of the trust. It also
emphasizes the trustee’s physical possession of the trust amendment instead of
intent to determine whether delivery occurred while ignoring the extrinsic
evidence from the circumstances in which both amendments were executed. Massachusetts recognizes that a deed or other
document may be placed in escrow (physically transferred from the grantor to
another party) under a condition where the delivery and the instrument’s
effectiveness depend on the satisfaction of one or more escrow conditions. See e.g., Foster v. Mansfield,
3 Met. 412, 415 (1841).
Thomas cites cases from other
jurisdictions, but none involved evidence of an expressed intention that
delivery not occur until a future event or satisfaction of some further
condition. There are circumstances where
a party may want to have documents prepared on a provisional basis, and then to
execute and acknowledge them, but have them held in escrow pending occurrence
of a future event. This future event may
never materialize and the escrow would either be given effect or not.
JUDGMENT: Reverse the judgment and remand for further
proceedings (MB)
