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SJC Limits One-Year Deadline on Challenges to Trusts Invalidity Claims

By Harry S. Margolis

In the case of Matthew Sacks, et al., vs. Nancy Dissinger, et al. (SJC-13105, December 29, 2021) the Supreme Judicial Court clarifies the application of the one-year statute of limitations on challenges trusts, ruling that it does not apply to claims of intentional interference and unjust enrichment.

The Tragic Background

Jeffrey Sacks, who was one of five children Aaron and Sheila Sacks, died in 2012 after a two-year battle with a brain tumor. He had decided to to decline further treatment. His son, Matthew, and two of his sisters supported his decision. His mother, who had had a stroke and was suffering from some dementia, was “[d]istraught over her son’s end-of-life decision, [and] she blamed grandson Matthew and daughters Donna and Joan for supporting it.  Sheila considered them complicit in Jeffrey’s ‘murder.’  Nancy, another of Aaron and Sheila’s children, encouraged this belief in their mother.”

As a result, Sheila along with her daughter, Nancy, convinced Aaron to change his trust to pass only to his four daughters, disinheriting Matthew and his sister, Rebecca, who under the original version of the trust would have have inherited his father’s one fifth share. Aaron died in 2017 at age 96 and the trust continued for Sheila’s benefit until she died 2019. After her death, Matthew and Rebecca sued for rescission of their grandfather’s 2012 trust amendment and against their grandmother’s estate and their aunts for intentional interference of their relationship with their grandfather and for unjust enrichment. They subsequently dropped their rescission claim.

The One-Year Statute of Limitations

Massachusetts law requires that any action to challenge “the validity of a trust that was revocable at the settlor’s death [be brought] within . . . [one] year after the settlor’s death.” M. G. L. c. 203E, § 604 (a) (1). This would seem to bar this lawsuit because Matthew and Rebecca brought their claim two years after their grandfather died. They argued, “however, that their claims of intentional interference and unjust enrichment [were] not trust contests but rather distinct causes of action.  The Superior Court judge rejected this argument, holding that, although the plaintiffs’ claims were not pleaded as challenges to the validity of the trust, they remained, in substance, trust contests.” It dismissed the lawsuit.

Validity vs. Tort

In this decision, the Supreme Judicial Court disagrees with the lower court and revives Matthew and Rebecca’s claim. The question, the Court says, is whether or not Matthew and Rebecca are challenging the validity of their grandfather’s trust, which would be barred by the one-year statute of limitations, or are bringing another type of claim which would not be time-barred. Its analysis follows that for wills, where the Court has “recognized the distinction between contests, which seek to determine the validity of a legal instrument, and other causes of action, which do not.”

      We understand a trust contest, then, as an action where the underlying facts are assessed for their effect on all or part of a trust (e.g., invalidity), while a noncontest is an action where the underlying facts are assessed for their effect on a person (e.g., harm).  The ultimate object of a contest is a determination of a trust’s validity, not the personal liability or even culpability of the settlors, beneficiaries, or trustees. 

Using this analysis, the Court first determines that a claim of intentional interference with an expectancy “derives from the harm one person causes another:  to prevail, a plaintiff must show that a defendant intentionally interfered through unlawful means with the plaintiff’s legally protected interest by acting on the would-be donor continuously ‘until the time the expectancy would have been realized.'” In this case, the Court reasons, Matthew and Rebecca’s

claim for intentional interference does not challenge the nature or validity of the trust, but rather seeks a determination of the harm caused by Sheila and Nancy.  Moreover, the plaintiffs’ intentional interference claim is predicated upon the amendment’s effectiveness:  without such amendment being given effect, the plaintiffs would suffer no harm flowing from its enforcement.

In other words, it’s only because the trust amendment was valid, that Matthew and Rebecca can bring their claim against their grandmother’s estate and their aunt — they are not questioning its validity.

How is a Trust Different from a Will?

The Court then distinguishes trust cases from those involving wills because in the case of Brignati v. Medenwald, 315 Mass. 636, 637-638 (1944), it had ruled that in the probate context a claim of intentional interference against a will would indeed fall under the same statute of limitations as a challenge to the will’s validity. The difference is that the probate process gives heirs the opportunity to bring their tort cases as well as any challenges they may have a will’s validity. This is not the case for trusts.

[O]ur holding in Brignati was based on the universal nature of the probate process to which wills are uniquely subject.  While wills and trusts are treated similarly when objects of contests, they arrive at being such objects in different ways.  Unlike trusts, the property of which is often distributed without a formal declaration of the trust’s validity by a court, virtually every will subject to the jurisdiction of the Commonwealth must be declared valid before any transfers of property may occur pursuant to the will.

. . .

    Moreover, although trusts are common will substitutes, we decline to extend Brignati’s line of reasoning to the instant case.  Not only are trusts not probated, but also would-be beneficiaries are far less likely to learn of their exclusion from a trust.  While a decedent’s heirs-at-law and devisees are required to receive notice of the probate of a will, G. L. c. 190B, §§ 3-306, 3-403, only qualified beneficiaries — who represent a subset of beneficiaries and certainly do not include family members who have been excluded — may be entitled to information about a trust, G. L. c. 203E, § 103. 

The Court concludes:

      Because an intentional interference with an expectancy claim inquires into one person’s (harmful) effect on another — not one person’s effect on the trust’s validity — and because undue influence can support such a tort claim distinct from a contest in these circumstances, we conclude that the intentional interference claim here is not subject to § 604’s one-year deadline.  Instead, it is subject to the three-year statute of limitations prescribed by G. L. c. 260, § 2A.

The Court also revives Matthew and Rebecca’s claim for unjust enrichment, reasoning that like their intentional infliction claim, it does not challenge the validity of the trust and should be subject to the three-year statute of limitations for tort claims.

Conclusion

This is an unfortunate case. Clearly Sheila was distraught over her son’s death and blamed her grandson. Nancy apparently supported her feelings and together they prevailed upon Aaron to change his estate plan. So, for Matthew and Rebecca, the loss of their father was compounded by their disinheritance by their grandparents. This decision only revives their lawsuit, giving them the opportunity to attempt to prove their case. We don’t know what the ultimate outcome may be, other than the fact that the disinheritance of Matthew and Rebecca has led to extensive litigation and no doubt a breakdown of family relationships.

In some ways, this case is similar to that of In the Matter of the Colecchia Family Irrevocable Trust, which I described in a previous blog post, where efforts to reduce the inheritance of some family members in favor of others gave rise to litigation that was dismissed by the trial court and revived, at least in part, on appeal. The moral of these cases may well be to beware treating family members differently in your estate plan. While under American law, no heirs have rights to inheritance and everyone is entitled to give their property to whomever they choose, in practice the results may be different. At least, unequal distributions can lead to costly litigation which may well deplete the estate to the ultimate benefit of only the lawyers.

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