Trusts, Estates, Adopted Children, and Unintended Consequences

We’ve all had experiences where intentions and results are not always the same thing.  Assuming good faith, laws sometimes have unintended consequences.

Last year, legislation dealing with adopted children and trust instruments was passed that became known as Chapter 524 of the Acts of 2008. At the Boston Bar Association, warning bells went off among our Trusts and Estates Section.

A bit of background. . . What once seemed like a benign piece of narrowly written legislation had been filed numerous times over the years – without garnering much attention.  Public hearings were held and the bill would sometimes make its way out of committee or be put into a study order for further review.

During the last legislative session, this same bill finally found its way to a different committee whose jurisdiction seemingly had nothing to do with trusts and estates law. Following a public hearing, this bill received a favorable report from the committee.  The bill made its way through the process and eventually got signed into law by the Governor.

This sounds fine, but almost 10 months after the public hearing and the committee’s action, the bill was amended to include a group of people I’d find it hard to believe were contemplated by the original bill.

Much to the dismay of trusts and estates practioners, the new law actually changed the clearly understood rule of construction that applied to terms like “child,” “grandchild” and “issue” in wills, trusts and similar instruments executed before August 26, 1958.  (In 1958, the Legislature modernized our law to presume that adopted persons are included in these terms unless the instrument plainly states otherwise, and made the law applicable only to instruments executed after its effective date.)

Caught by surprise, the trusts and estates bar and banks and other professional trustees were left scrambling to review all pre-1958 trusts to determine which ones were affected by this sweeping change.

After analyzing the substance and implications of Chapter 524, the BBA and others began to work on a repeal of this new law.  The best we could do in the short term was secure a postponement of its implementation until July 1, 2010.  While this was a small victory, the process has begun again.

The BBA and others are still working on this issue. Amendment 367, filed in the House budget, will not only repeal chapter 524 but also create a retroactive, blanket immunity for trustees who either acted (or failed to act) in relation to it.

In the midst of a week of potentially tough votes, legislators are contemplating almost 870 amendments dealing with spending, revenue and reform.  Let’s hope that Amendment 367 will be adopted.

-Kathleen Joyce

Government Relations Director

Boston Bar Association

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