By: Emily Beekman, Don J.J. Cordell & Meghan McCullen
Ciani v. MacGrath
For the first time, the Supreme Judicial Court (SJC) has held that the Massachusetts elective share statute entitles a surviving spouse to a life estate in real property (real estate). The SJC’s holding was issued on January 8, 2019 in the case of Ciani v. MacGrath.
Leighton v. Hallstrom
A recent Appeals Court case highlights the hazards of relying on the pre-printed probate forms in Massachusetts Probate Court practice and suggests that the forms should be edited by hand as a particular situation may warrant.
SJC Rules That the Massachusetts Elective Share Statute Entitles a Surviving Spouse to a Life Estate in Real Property
Ciani v. MacGrath
The January 8, 2019 Ciani v. MacGrath ruling clarifies that the surviving spouse’s rights in the deceased spouse’s real estate is not limited to cash income generated from the property (e.g. rental income) but an actual property ownership interest with all of its attendant rights and obligations, including the right to partition.
As the SJC described, the elective share statute (G.L. c. 191, § 15) is “intended to prevent spousal disinheritance, whether by inadvertence or design.” This means that if one spouse purposefully or accidentally disinherits the other spouse, the surviving spouse has the right, within a limited period of time, to file an election with the probate court to waive the terms of the deceased spouse’s will and elect to take a share of the deceased spouse’s estate.
The statute specifies the extent to which the surviving spouse may obtain rights in the decedent’s estate, which depends on various circumstances (e.g. whether the decedent had children, siblings, etc.). In the Ciani case, the statute provided that the surviving spouse’s elective share was to be one-third of the decedent’s personal property and one-third of his real estate, with the first $25,000 paid outright, plus an “income” interest in one-third of the balance of the real estate and personal property. The issue for the courts (the probate court and then the SJC), however, was the meaning of the word “income” as it applied to the real estate.
Raymond Ciani died with a will in 2015. He was survived by his wife, Susan, and four adult children from a first marriage, one of whom was also named as the personal representative of his estate. Raymond did not provide for Susan in his will. Rather, his will left his estate to his first wife (who had predeceased him), otherwise to his four adult children. The estate was worth approximately $675,000, including three parcels of real estate.
After Raymond died, Susan remained in the marital home and made a timely election of her elective share. She also filed petitions for partition seeking to force the sale of all of the real estate, in which she alleged that she owned her one-third interest as a “life estate” in that portion of each of the properties pursuant to her elective share. (A life estate is a property ownership interest for the duration of a person's life; this person is the “life tenant.” The life tenant has the right, during her life, to possess and occupy the property, to receive all of the income generated by the property, and to exercise other rights of a property owner. Upon the life tenant’s death, the life estate terminates, and the ownership of the property passes to one or more other persons, referred to as the “remainderman.”)
The dispute arose because Raymond’s children claimed that Susan did not have a “life estate” interest in the real estate under the elective share statute and thus could not force a sale via the partition process. The children argued that as used in the statute, the term “income” was limited to cash generated by the real estate, such as rental income. (There was no dispute that Susan’s one-third interest in the decedent’s personal property (e.g. bank and investment account assets), less the $25,000 paid outright, was to be held in trust and that Susan was entitled to the income generated from those assets.) And so the children sought dismissal of Susan’s petitions to partition since, they argued, only a party with an actual ownership interest in real estate, such as a life tenant, may bring such an action, and Susan did not have an ownership interest.
The SJC disagreed with the children and ruled in Susan’s favor, holding that Susan did indeed receive a life estate interest as a part of her elective share, and the children owned the remainder interest. In so ruling, the SJC acknowledged that the statute was “unwieldy and perplexing in most instances,” and so it undertook a detailed examination of the statute’s provisions and legislative history to arrive at its conclusion. For example, the Court explained that per the statute, the surviving spouse’s “income” interest in real estate is to be “vested,” and this vesting language shows that the Legislature’s intent was for the surviving spouse to have an actual property ownership interest and not just an interest in the income produced by the real estate. Also, vesting language is not used relative to non-real estate assets, and so personal property and real property are to be treated differently. Further, since the statute provides that the interest in the real estate is to be “for life,” the ownership form must necessarily be a life estate.
The ruling is important because as the owner of a property interest in the real estate, Susan was entitled to clearly defined rights and obligations, including the right to petition for the real estate’s partition. She would not have had these property rights with a mere interest in the income produced by the property, which as the SJC noted, “is not an ownership interest at all.”
The SJC went on to explain that in the event that the properties were sold pursuant to a partition process (though a sale is not the only partition method), Susan was entitled to her share of the proceeds, or alternatively, a judge was permitted upon petition to appoint a trustee to manage and invest Susan’s share of the proceeds in trust and pay the annual trust income to Susan for her life.
By its own acknowledgment, the ruling leaves no doubt that the Massachusetts elective share is confusing and in need of update. This makes it all the more important for clients and their trusts and estates and family law attorneys to carefully consider its implications when undertaking estate planning for a surviving spouse.
Appeals Court Case Reminds Practitioners of Risks Associated with Reliance on Pre-Printed Probate Court Forms
Leighton v. Hallstrom
In Leighton v. Hallstrom (Mass. App. Ct. No. 17-P-1335, Nov. 7, 2018), the decedent, Robert H. Olson, died on February 7, 2015 without any immediate family and without creating a will. The decedent’s first cousin on his father’s side, Dorothy Leighton, filed a petition to appoint herself as the Personal Representative of Robert’s estate and also for a formal determination of his heirs, naming herself and two cousins as Robert’s heirs pursuant to the applicable statute. Thereafter, the defendant, Bengt Hallstrom of Sweden, came forward as a first cousin on the decedent’s mother’s side (he was not named on Leighton’s petition), which rendered him an heir under the law as well, and he filed a “Notice of Appearance” using a pre-printed probate form.
The standard form Notice of Appearance provides two options for filers: check a box indicating you are objecting to the proceeding, or check a box indicating that you are not. Because Hallstrom’s intention in filing the Notice of Appearance was to document his relationship to the decedent (as an heir) and not objecting to Leighton’s appointment as Personal Representative of the estate, he checked the second box but made no mention of his claim to be an heir along with his other cousins.
During the probate process, the guardian ad litem (GAL) appointed by the probate court to advocate on behalf of the heirs of the decedent concluded in its report that the “issue of determining heirs can be addressed during the course of the handling of the estate.” During that same time period, there was communication between the attorneys representing the defendant and the plaintiff regarding the ancestral evidence that Hallstrom was an heir of the decedent.
Despite Leighton’s petition that acknowledged the existence of additional heirs unknown to her, the GAL’s determination that further research was possibly required to confirm the heirs of the decedent, and the attorneys’ correspondence regarding the ancestral research, a magistrate issued the final decree on Leighton’s petition for her appointment and checked the box that indicated that the heirs were “as stated in the [p]etition” – which meant that Hallstrom was left out.
Subsequently, when Leighton filed a petition for order of complete settlement to close the estate, Hallstrom was again not listed as a beneficiary of the decedent’s estate, consistent with the magistrate’s decree. Hallstrom objected to the petition for complete settlement, claiming he was an heir and should receive a share of the estate. Leighton disagreed, arguing that a determination of heirs had already been adjudicated when the magistrate issued its decree and that Hallstrom had waived any objections when he filed his Notice of Appearance, which (per the standard form) made no mention of his claim to be an heir.
The Probate Court agreed with Leighton and allowed Leighton’s motion to strike Hallstrom’s objection, holding that the decree issued by the magistrate must be deemed ‘final’ unless Hallstrom timely appealed Leighton’s petition or filed a motion to vacate (M.G.L. ch. 190B, §3-412).
On appeal, the Appeals Court reversed the probate court’s decision and ruled that Hallstrom’s kinship was never actually adjudicated, and therefore he was not precluded from objecting to Leighton’s petition to close the estate. While the magistrate had checked the box on the decree that the heirs were as set forth in the petition, the Appeals Court stated that the decree adopted Leighton’s initial acknowledgement that additional heirs may be unknown, and it emphasized that rather than rely on the wording in the pre-printed probate form, Hallstrom should have tailored the Notice of Appearance form to make his intentions clear. The Appeals Court then remanded the case to the Probate Court to determine Robert’s heirs.
Notably, the Appeals Court also issued a rebuke to Leighton, writing that as the fiduciary representing the estate, she had a duty to determine the heirs and a duty “not to mislead him [Hallstrom] about how his claim was to be resolved.”
These cases highlights the importance of understanding Massachusetts probate forms and potential mishaps as a result of the failure to tailor the forms to your specific case. While significant measures have already been undertaken by the probate court to adopt comprehensive and uniform forms, careful and individualized drafting of the forms continues to be necessary.
Please feel free to contact the members of the Private Client Group at Casner & Edwards with any questions concerning the legal issues arising from these decisions or other questions that you might have.