USA – MASSACHUSETTS Law and Practice Contributed by: Patricia M. Annino, Rimon, P.C.
the trust property; (iii) to enforce and defend claims; (iv) of impartiality; and (v) of loyalty. It is important to note that under case law even the broadest discretionary powers in a trust are subject to judicial review. 6.4 Fiduciary Investment See 6.3 Fiduciary Regulation pertaining to the Massa - chusetts Prudent Investor Act. The law provides that the prudent investor rule may be expanded, restricted, eliminated or altered by the terms of the trust. Typi - cally, in a trust, broad investment powers are included to address diversification and asset selection chal - lenges. Trustees are generally required to promptly dispose of unsuitable investments and diversify assets in accordance with the Prudent Investor Act. The trust can provide that a trustee can opt out of this require - ment and that is very helpful when there are unique assets such as a closely held business in a trust. If the intent is to retain risky assets, the trust document should specify that. Massachusetts law does not dis - allow any particular asset class. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship A person’s domicile or legal residence is their true home or main residence. A person can have multi - ple homes but only one domicile. According to the Massachusetts Department of Revenue, the legal residence is usually where someone maintains the most important family, social, economic, political and religious ties, and it depends on all the facts and cir - cumstances of each case, including good faith. Other factors include where vehicles are registered, voter registration, address used on a driver’s licence, loca - tion of bank accounts, brokerage accounts and credit card accounts, and the governing law in estate plan - ning documents (health-care proxy, durable power of attorney, will, trust, etc). Domicile for estate tax purposes is determined by the facts and circumstances of the taxpayer’s life, taking into account subjective intent.
Each person keeps their present domicile until a new domicile is established. A new domicile may be acquired by abandoning the current domicile, estab - lishing a residence at a new place and intending to make the new residence one’s home permanently or for an indefinite time, with no certain present intent to return to the previous home. The burden of proving that a taxpayer has changed their domicile lies with the person asserting the change. For Massachusetts income tax purposes, a taxpayer is considered a full-year resident of Massachusetts if the taxpayer has a home in Massachusetts for the entire tax year or, for someone domiciled elsewhere, maintenance of a permanent place of abode in Mas - sachusetts and spends more than 183 days of the taxable year in Massachusetts (days spent in Mas - sachusetts while on active duty with the US armed forces do not count). A taxpayer is considered a part-time resident if the taxpayer moves to Massachusetts during the tax year and becomes a resident or moves out of Massachu - setts during the tax year and ends their status as a resident. A taxpayer is a non-resident if they are neither a full- year nor a part-year resident. 7.2 Expeditious Citizenship There is no expeditious means for an individual to obtain citizenship in Massachusetts. 8. Planning for Minors, Adults with Disabilities and Elders 8.1 Special Planning Mechanisms Massachusetts has enacted the Uniform Transfers to Minors Act by which a custodian may make discre - tionary distributions to or for the benefit of a minor until the minor reaches the age of 21. There are no special Massachusetts trusts for minors. Disabled persons may be entitled to both federal and Massachusetts government assistance programme
770 CHAMBERS.COM
Powered by FlippingBook