USA – MASSACHUSETTS Law and Practice Contributed by: Patricia M. Annino, Rimon, P.C.
income/capital gains rate calculations should be con - sidered prior to making a gift of appreciated assets. 2.7 Transfer of Assets: Digital Assets Massachusetts has not yet adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), but a bill has been proposed to establish the Massachusetts Fiduciary Access to Digital Assets Act. This bill provides a framework to address how fiduciaries should access and manage a person’s digital assets in the event of incapacity or death. The Massachusetts Supreme Court, in Ajemian v Yahoo , Inc held that the Stored Communications Act does not prohibit Yahoo from disclosing the contents of a decedent’s email, and that Yahoo is permitted but not required to disclose the email contents to the personal representative of the estate. Individuals may include digital asset clauses within their estate planning docu - ments that specifically address fiduciary access. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Trusts are commonly used in Massachusetts to mini - mise taxes, avoid probate, manage assets, maintain privacy and confidentiality, control a beneficiary’s access to assets, protect assets and for charitable planning. Types of Trusts and Foundations A variety of trusts are typically used for estate plan - ning in Massachusetts, including revocable trusts, irrevocable trusts, special needs trusts, certain self- settled special needs trusts used in public benefits planning, testamentary trusts (used for MassHealth planning), pet trusts, trusts for minors, spousal lifetime access trusts, grantor-retained annuity trusts, quali - fied personal residence trusts, private foundations and charitable split-interest trusts. Rules Against Perpetuities The Massachusetts common law rule against perpe - tuities provides that an interest in property is not valid unless it must vest no later than 21 years after some life in being at the creation of the interest, or within 90
years after its creation. Massachusetts adopted the Uniform Statutory Rule Against Perpetuities, which applies to property interests and powers created after 30 June 1999. Decanting of Trusts The decanting of trusts is increasingly common in Massachusetts. Decanting may be permitted by stat - ute, by the terms of the original trust, or by court- created law. Massachusetts has no general decanting statute; authority to decant derives from the govern - ing instrument and common law. The Supreme Judi - cial Court has ruled that it is permissible to transfer assets from one trust to another as long as the new trust serves the same purposes as the original trust, and the trustee can act without court approval. The decanting authority does not have to be granted expressly and may be inferred from the entirety of the powers given to the trustee by the settlor. The settlor’s intent is important. As in other jurisdictions, decanting may be used for many reasons, including to clarify ambiguities or cor - rect errors in the trust, provide protection for changes in beneficiary status, such as special needs, asset protection, merging or separating of trusts, expanding business powers, modifying trustee succession provi - sions, and adapting to changes in law and tax law. In a recent case, Ferri v Powell - Ferri , the Massachusetts Supreme Judicial Court approved a trust decanting which removed vested withdrawal rights for a benefi - ciary in an active divorce action (thereby protecting the asset from being a countable marital asset), relying on two key facts – the independent trustees decanted without notifying the beneficiary, and an affidavit of the settlor’s intent. The “Nominee Trust” Massachusetts has a unique trust, known as a “nomi - nee trust”, which frequently holds title to real estate. It is not a true trust. It is a principal/agent relation - ship. The beneficial owners are listed on a separate schedule of beneficiaries (which is not recorded in the Registry of Deeds). The trustee cannot act without the beneficiary’s authority. The listed owner on the schedule may be an individual or individuals, a trust or an entity.
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