Monthly Archives: January 2019

BBA Endorses Uniform Law on Trust Decanting

Let’s get one thing out of the way up-front: This blog post has nothing to do with wine.

Rather, let’s talk about trust decanting, or the fiduciary exercise of broad discretionary powers of distribution to create new trusts for one or more beneficiaries of an existing trust. In other words, the distribution of assets from one trust into a second trust, just as wine may be decanted from a bottle into another vessel.

It’s a form of trust modification that’s available to fiduciaries now in Massachusetts. Decanting can be a useful strategy for changing the outdated terms of an otherwise-irrevocable trust—for example, to provide for a beneficiary who becomes disabled after the settlor executes the original trust—but it can also defeat a settlor’s intent, so rules are needed to prevent such abuse.

However, the law on decanting in Massachusetts—what can and can’t be done, under what circumstances—is far from clear.

This situation has confounded practitioners, who don’t know whether a specific modification is proper until the courts weigh in—and who may therefore refrain from taking certain appropriate steps out of fear of litigation. It also poses traps for the unwary and creates an incentive for settlors and testators to establish trusts elsewhere, in a state such as New Hampshire whose trusts law is more modern and can thus provide greater assurance.

Of course, this issue is not new to the BBA. In 2013, we filed an amicus brief to the SJC in Richard Morse, Trustee v. Jonathan A. Kraft, et al. That case addressed, for the first time in Massachusetts, a trustee’s power to transfer the assets of one irrevocable trust to another for the same class of beneficiaries. The BBA’s brief argued in favor of this power to decant, and urged the Court to recognize that it is inherently held by trustees.

The SJC did rule favorably with respect to Morse’s petition—recognizing the authority of trustees to decant where the terms of a particular trust and the surrounding circumstances indicate that decanting is consistent with the trust settlor’s intent—but declined to recognize decanting as an inherent trustee power, essentially preserving the current limbo.

Since that decision, the BBA has hosted numerous CLE and other events on the topic, and next month we will host an event titled “Decanting, Non-Judicial Settlement Agreements and Other Trust Amendment Alternatives.”

Into this uncertainty stepped the independent Standing Committee on Massachusetts Legislation Relating to Wills, Trusts, Estates and Fiduciary Administration (which you may remember from its work on the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA). That group of trust experts—which includes Stacy Mullaney of Fiduciary Trust, BBA Trusts & Estates Section Co- Chair, and Brad Bedingfield of Hemenway & Barnes, Trusts & Estates Section Public Policy Committee Co-Chair—spent more than year poring over the Uniform Law Commission’s model language to develop a Massachusetts-specific version of the Uniform Trust Decanting Act (UTDA), which was designed to create a national framework for practitioners facing questions of how best to accomplish trust decanting.

Last month, on the recommendation of the Trusts & Estates Section, the BBA Council endorsed their work, and we will now make the case to the Legislature that they should adopt this UTDA as part of the existing Massachusetts Uniform Trust Code, joining the other half of the states that have taken similar steps to date—enacting either UTDA or their own decanting statutes.

This proposed Act represents a piece of legislation (now filed by Senator Cynthia Stone Creem) that has been deeply vetted, fits a known need, and will ensure that practitioners in the Commonwealth have at least the same level of statutory clarity on this issue as those in the majority of other states throughout the country. If it’s enacted, Massachusetts practitioners will be free to continue to decant trusts under common law, if that makes the best sense for a client or situation; they will, however, have an alternative and clear guidance concerning how to decant properly in accordance with the statute.

—Michael Avitzur
Government Relations Director
Boston Bar Association

Court Adopts Uniform Trial Court Limited Assistance Representation Rule Incorporating BBA Section Comments

As you know, we regularly collect and submit comments on proposed new and amended rules and court orders from our Section Steering Committees, who offer insights from the viewpoint of a particular practice area. The courts have a strong history of listening and responding to the concerns and suggestions of the Sections, and their insights are often reflected in the final iterations of the rules.

Late last year, the Court released a final version of the Uniform Trial Court Rule on Limited Assistance Representation (LAR) that incorporated feedback from our Business and Commercial Litigation Section (BCLS) Steering Committee. The Rule will become effective on February 1, 2019, and can be read in full here.

Early last year, Chief Justice of the Trial Court Paula M. Carey solicited comments on the proposed Uniform Trial Court Rule on LAR. An LAR Rules Committee was formed in 2017 and charged with drafting the proposal, intended to provide consistency across departments, improving the service for both lawyers wishing to provide LAR and litigants wishing to secure LAR services. When creating the proposal, the Committee considered the Supreme Judicial Court (SJC) LAR Order as well as existing Orders from other Trial Court Departments.

The BCLS Steering Committee comments began by noting that committee members believed “the Trial Court’s embrace of limited assistance representation is an important development in the delivery of affordable legal services in non-criminal cases,” noting that the Section had previously reviewed and offered favorable comments on the Superior Court’s LAR order the previous year. The comments commended the Court for continuing those efforts and highlighted a few points in the proposed rule that departed from the existing rules in ways potentially worth clarifying.

For example, the comments expressed concern about the requirement that the attorney “ensure that a prospective client fully understands the agreement and that the client gives informed consent.” Members were not sure how counsel could “ensure” that a client “fully understand” the agreement and suggested instead it a more objective test, like reviewing the document together. The final comment removes the “ensure” language and instead reads: “The attorney shall review the written agreement with the client before it is signed and obtain the client’s informed consent.”

Members additionally raised concern about the language addressing instances when a lawyer may have exceeded the scope of the assistance described in the Notice of Limited Appearance. The proposed rule provides: “[I]f an LAR attorney files a pleading, motion or other document and/or argues a legal issue outside the scope of a filed Notice of Limited Appearance, then the court may consider the LAR attorney to have entered a general appearance.” Members were worried “that counsel would feel constrained not to raise relevant, helpful, but unforeseen issues—which they had not identified in their Notice of Limited Appearance—out of a concern that they could then be deemed to have appeared generally.” The new rule clarifies this provision, easing the concern expressed in the comments, and now notes that if an Attorney files or argues something outside the scope of the filed Notice of Limited Appearance, the court may require a new Notice to be filed, and if the attorney fails to do so after that, the court may consider the attorney to have entered a general appearance.

            Next, the comments raised two minor clarifying suggestions related to paragraph 5: the mentioned Notice of Withdrawal should be “court-approved,” and that there should be a reference to “service. The final rule incorporates both of these suggestions, now reading: “[u]pon completion of all events or issues for which an LAR attorney has filed a Notice of Limited Appearance, s/he shall serve and a Notice of Withdrawal of Limited Appearance on a form approved by the Chief Justice of the Trial Court.”

            Finally, members addressed the “non-punitive remedy” outlined in Paragraph 5, finding the new proposal a bit draconian compared to the previous standing orders, and noting that members thought that the bar to an award of fees or costs should be set higher than in the proposed rule. The proposal read that “if any other party incurs costs or is otherwise prejudiced by the attorney’s failure to file a Notice of Withdrawal, then upon motion the court may order a non-punitive remedy, including compensation for fees and costs reasonably incurred.” The final rule remains much the same but adds that “…upon motion the court for good cause may order a non-punitive remedy…”(emphasis added). 

You can read the full BCLS Comments here.

As always, we are very appreciative of the hard work and expertise offered by the Committee Members, especially committee co-chairs Stephen Riden of Beck, Reed, Riden and Daniel Tighe of Donnelly, Conroy & Gelhaar, who presented the comments to our BBA Executive Committee before their submission. We’re also thrilled that the court adopted many of the suggestions.

To read more about the impact of past BBA Comments check out:

Busy BBA Sections Submit Comments on Five Proposed Rule Changes and New Rules

BBA Government Relations Year in Review: Part II

Comments Update: Final Trial Court Rule on Attorney Portal Use Reflects Revisions Suggested by BBA Section Comments

—Alexa Daniel
Legislative and Public Policy Manager
Boston Bar Association

BBA Council Endorses Proposed ABA Resolution on Zero-Tolerance Policy

UPDATE: We’re pleased to report that the ABA adopted this resolution at their mid-year meeting in January.

December was a busy month for the BBA Council. In addition to adopting a position on Massachusetts trust and estates legislation, which you can read about here, the Board also endorsed a proposed ABA Resolution related to federal immigration policies and practices.  This proposal will be voted on by the ABA House of Delegates at the Mid-Year meeting at the end of this month.

The Resolution

The Resolution and accompanying report were drafted in response to concerns over the US Attorney General’s “zero-tolerance policy,” which, as the accompanying report states, “mandates the prosecution for illegal entry of everyone apprehended at our southern borders between ports of entry, including asylum seekers,” and “Operation Streamline,” under which “en masse hearings combine the initial appearance, preliminary hearing, plea, and sentencing into one single proceeding that can last less than one minute per defendant.” The resolution reads in full:

  • RESOLVED, That the American Bar Association calls upon the Attorney General to rescind the policy of prosecuting all individuals who enter the United States without authorization at the southern border for the misdemeanor offense of illegal entry pursuant to 8 U.S.C. §1325, end the practice of expedited mass prosecution of immigrants, and allow for an individualized determination in deciding whether to file criminal charges.
  • FURTHER RESOLVED, That the American Bar Association urges the federal judiciary to take appropriate measures to assure that every defendant charged with the misdemeanor offense of illegal entry is represented by counsel who has had an adequate opportunity to consult with the defendant, and that any guilty plea is knowing, intelligent, and voluntary.
  • FURTHER RESOLVED, That the American Bar Association urges Congress to provide sufficient funding for the judiciary to enable it to take the above measures and sufficient funding to assure that each defendant receives effective assistance of counsel.
  • FURTHER RESOLVED, That the American Bar Association urges the Attorney General to exercise prosecutorial discretion and refrain from prosecuting asylum seekers for the offense of illegal entry.

  The report accompanying the proposed resolution explains why the ABA Commission on Immigration and other groups are so concerned about this policy and practice , focusing specifically on the “significant due process” and public safety issues. The report first points to the conclusion drawn by several former U.S. Attorneys that devoting prosecution resources to the mandatory prosecution of misdemeanor improper entry actually detracts from public safety by leading to a dramatic decrease in prosecutions for other serious crimes. These crimes include drugs and weapon smuggling, human trafficking, and environmental crimes. In a letter to the Attorney General on this issue, a bipartisan group of former U.S. Attorneys stated: “Under your Zero Tolerance policy, firearms cases, violent crime cases, financial fraud cases, and cases involving public safety on Indian reservations all take a back seat to these lesser, weaker misdemeanor cases.”  

The report next discusses the significant due process concerns presented by Operation Streamline, which began as a pilot in the Del Rio border sector in 2005, continued sporadically until 2018, and then was expanded across the southern border of the U.S. by the zero-tolerance policy. While the stated purpose of the practice is to deter entry without authorization, there is no evidence that that the policy has had that effect.  This practice raises significant due process concerns, as the use of en masse hearings mean that Federal public defenders typically only have a few minutes to meet, interview, and prepare each client prior to the court proceedings and questions by the judge are also often predominantly done en masse.

            More specifically, these concerns have led the drafters of the report to worry that the guilty pleas procured in these hearings may not even be valid as “under the rush of these proceedings, a defense attorney has only a brief opportunity to meet his or her clients — in a public setting — immediately prior to a scheduled guilty plea hearing to discuss the charges and the decision whether to plead guilty.” Additionally, this makes it difficult or impossible for defense attorneys to fulfill their duty of providing effective assistance of counsel, as they do not have the time required to adequately evaluate the evidence, investigate the veracity of the allegations, and consider any potential defenses. And it’s not only the counsel and clients who suffer from these policies, the report highlights that judges and magistrates are put in an untenable position by having to preside over these group proceedings, since they must determine before accepting a guilty plea, that it was made knowingly, voluntarily, and intelligently.  

            Finally, the report highlights specific concerns related to asylum seekers. The mandatory prosecution of everyone, including those seeking asylum, deprives prosecutors of the discretion to consider cases on the merits, “contrary to accepted norms concerning the sound exercise of prosecutorial discretion.”

Read the full proposed resolution and report here.

BBA Background

                As you likely know by now, the BBA has recently adopted a Statement of Principles Concerning Immigration and Related Issues, which includes four key principles and a full report of the background and reasoning behind them. The document was intended not only as an expression of the BBA’s positions and core values in this area but also as a guide in responding to future immigration questions and challenges. In this instance, the principles most relevant for analyzing the zero-tolerance policy and Operation Streamline are Principle 3 and Principle 4.

Principle 3 calls for the protection and enforcement of due process and equal protections rights for all. The report specifically states:

“Those well-settled principles—that immigrants, including those who have entered the country without documentation, are entitled to the protections of the Due Process and the Equal Protection Clauses—should serve as the foundation for the BBA’s approach to addressing immigration issues.”

Principle 4 provides that “[e]very person should have the full and meaningful ability to exercise their rights and to access justice through the legal system regardless of immigration or citizenship status, level of income, or economic circumstance.” And the report specifically references Operation Streamline in the provision related to “Access to Counsel and Individualized Hearing:”

“Furthermore, when defendants in immigration proceedings seek to assert their rights and privileges, they must be afforded the right to an individualized hearing of the unique facts of their case. … [G]roup hearings and other shortcuts in immigration proceedings have been imposed, particularly along the southwest border, in which ‘a single attorney can represent dozens of defendants at a time, [and] might not be able to speak confidentially with each client or might have a conflict of interest among clients.’ In such cases, judges may take as little as 25 seconds to hear the case of each defendant. Such proceedings cannot be viewed as offering meaningful access to counsel, due process, or justice. [citations omitted]”

            Asylum-seekers are also entitled to due process in pursuing their claims before federal immigration officials.  The BBA used the immigration principles to speak on this issue just a few months ago, expressing concern about newly-imposed limits on their ability to do so, and saying:  “While not all individuals who arrive at our border are eligible for asylum, under law each and every one must be afforded a meaningful opportunity to have their claim for asylum heard.” The extent to which these policies hinder the ability of asylum-seekers to have their claims heard is therefore deeply troubling.

Finally, the BBA has a long history of supporting adequate funding for the judiciary, making it a priority of our state budget campaign each year, so it’s only natural that we urge for adequate funding for the federal judiciary, in order to accommodate the resolution’s call for a right to effective representation by counsel for every defendant charged with the misdemeanor offense of illegal entry.

Next Steps

At the end of this month, the ABA hosts its Mid-Year Meeting where the House of Delegates will vote on a range of proposed resolutions, including this one. Our ABA Delegates, both former BBA Presidents, Mary Ryan, of Nutter McClennen & Fish, and  Lisa Arowood, of  Arrowood LLP, have and will continue to communicate our support for the proposal and urge for its adoption. We’ll be sure to keep you posted on whether this important resolution is adopted and other developments in this space!

—Alexa Daniel
Legislative and Public Policy Manager
Boston Bar Association