If you are thinking about changes to your will or trust, it helps to have the assistance of an experienced estate planner to ensure your wishes are fulfilled when the estate is distributed. A recent Massachusetts Appeals Court decision (15-P-99) demonstrates the confusion and litigation that can occur among family members following a death and the transfer of property. In this action, three siblings filed suit against their brother and his wife after they took ownership of one of the properties previously owned by their parents. The plaintiff-siblings alleged that their parents intended the property to be shared by all four siblings.
The patriarch of the family died in 1997, leaving the property to his wife, the mother of the children who are parties to the litigation. The mother requested the siblings contribute to the maintenance of the property, but none of the plaintiffs volunteered. The plaintiffs instead suggested that a part of the property be sold to cover the expenses. The defendant-brother refused this proposal. In 1998, the mother transferred a part of the property to him for $2,000. Following this, the brother created a trust to hold the property, which listed all four children as beneficiaries. All of the siblings signed a schedule of beneficiaries as proof they knew of the trust and its purpose. Unfortunately for the plaintiffs, the mother never transferred the property to the trust, and the trust remained unfunded. The plaintiff-siblings were unaware of this failure to transfer. Since the city was notified of the trust and directed to bill the trust for property taxes, the children assumed the trust was funded. In 2002, the mother transferred the remainder of the property to the brother for $20,000, but the brother did not let the siblings know this exchange occurred. In 2005, suspicious of her brother’s intentions, one of the plaintiff-siblings wrote to the Probate and Family Court regarding the brother’s efforts to become the guardian of their mother.
At the jury trial, the plaintiffs ran into many hurdles during the entirety of the trial. The siblings claimed their brother, through fraud, deceit, or a breach of fiduciary duties, took the income from a property that was to be divided among all of them. The brother moved for a directed verdict at the close of the plaintiff’s case, arguing his siblings missed the statute of limitations. The court granted the motion, concluding the plaintiffs knew or should have known they were harmed three years before the lawsuit was filed. The court also granted the brother’s motion for a directed verdict on the contract claim, ruling that no evidence of an agreement had been admitted. The trial court allowed the claim for promissory estoppel to be submitted to the jury, since it had a six-year statute of limitations. The jury found for the plaintiffs and awarded $200,000 in damages; however, the court then granted the brother’s motion for a judgment notwithstanding the verdict because no evidence of an unambiguous promise was admitted during the trial. The siblings appealed.
The trial court based its directed verdict regarding the statute of limitations on the sister’s letter. The trial court found that the letter demonstrated that the siblings knew or should have known about the mother’s transfer of property to the brother. The siblings argued that the statute of limitations did not begin until 2006, when they had actual knowledge of their brother taking title to the whole property. The appellate court disagreed, aligning with the trial court’s determination. In the 2005 letter to the Probate Court, the sister specifically noted that her brother convinced her mother to sign over control of the entire estate. This, along with a 2004 email inquiring about the status of the property, resulted in the finding and affirmation that the siblings knew or should have known the property exchange occurred. The appellate court also ruled that the trial court was correct in finding the brother did not have a fiduciary duty to his siblings. A fiduciary obligation would have extended the statute of limitations, but the appellate court, citing Massachusetts case law, ruled that a fiduciary duty does not exist between family members simply because they are family, even in matters of real estate, finance, or business.
The siblings also argued on appeal that the JNOV on the promissory claim should not have occurred because the trial court focused on the wrong type of promise. The siblings argued that the brother functioned as a quasi-trustee, based on his promises to maintain the family property by providing physical maintenance and paying taxes. While the appellate court understood the plaintiffs’ point of view, the court ultimately upheld the JNOV based on the lack of detrimental reliance. There was no promise to share in the profits generated by the property, and the trust was not properly funded. The appellate court affirmed the lower court’s directed verdict and allowed the judgment notwithstanding the verdict to stand.
The Massachusetts estate planning attorneys at Karsner & Meehan can help you draft or revise your document. Contact our office today at 508-822-6600 for a free, confidential consultation.
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