Massachusetts statutes guide the responsibilities and expectations of a trustee as well as the parts of the process the trustee must use for distribution. A trustee has broad powers over the administration of an estate. If the trustee mishandles her or his duties, the beneficiaries can be shortchanged. A recent Massachusetts estate planning decision (16-P-1314) deals with a depleted trust account, reviewing when a trustee commits a breach of trust, how much discretion they have, the compensation they are entitled to receive, and how and when they should be removed.
In this case, the father of both the plaintiff and one of the defendants in the lawsuit was the settlor of the trust, executed in February 1999. His estate was divided into four equal shares, with one share distributed through a separate trust to the plaintiff daughter and two of her three children. The rest of the shares were to be distributed to the remaining beneficiaries “free of all trusts.” The trustees administered those assets after the settlor’s death in 2001, leaving the daughter and her designated children as the sole remaining beneficiaries by 2008. However, no distributions were made to the plaintiff or her children until ordered by the judge in 2016. In the interim, the trustees used assets designated to the plaintiffs to pay the storage fees for items belonging to the plaintiff daughter found in the settlor’s home. The plaintiff daughter was made aware that her items were in a storage facility and that it was her responsibility to move them, but the trustee refused to give her the address of the storage facility.
Nothing further was said of the property until 2008, when the same trustee sent a letter advising she could not “cherry pick” and must accept the items altogether. Once more, the trustee refused to give her the location of the storage unit. Two similar letters were sent out after this, but nothing was addressed until the daughter filed the underlying case in 2013. By then, $50,000 of the assets out of the plaintiffs’ trust had been used to pay the storage fee over the 15-year span. Trust assets were also used to pay trustees’ fees, attorneys’ fees, and litigation expenses. The balance of the trust was reduced from $542,042 to $463,719, absent any actual distribution by the time the lawsuit was filed. During the litigation, the defendants continued to use the trust’s assets, reducing the assets to $250,000.