SJC Decision in Bird Provides Reassurance & Protection for Fiduciaries Acting in Good FaithPress Release
Throughout the year, the Boston Bar Association (BBA) receives many proposals for amicus briefs. All proposals for BBA amicus briefs are fully vetted to determine what if any value the BBA’s voice can add to the questions before the court. Extremely selective about weighing in with an amicus brief, the BBA takes pride in the quality of its briefs, all of which are drafted by dedicated volunteers. In today’s decision by the Supreme Judicial Court in Rachel A. Bird Anderson vs. BNY Mellon, N.A. trustee and others, the BBA is delighted to report that the SJC answered the questions posed by the BBA’s amicus brief filed in this case. A BBA news release issued on May 1, 2012 illustrates the underlying problems in Bird.
Amid controversy, confusion and uncertainty over the retroactivity of a 2009 amendment, the BBA amicus brief, filed on April 30, 2012 urged the SJC to answer two specific questions:
Is the retroactive application of Chapter 524 to instruments executed prior to 1958 constitutional?
If so, what are the consequences for actions taken by fiduciaries in reliance on Chapter 524 prior to the SJC’s determination that such an application is constitutional?
In its BIRD decision released today the SJC provided the clarity and assurances the BBA was seeking:
“On balance, the retroactive application of the 2009 amendment to the plaintiff is not reasonable,” says the decision. The decision goes on to provide even greater clarity:
“Although our discussion has focused on the factual situation before us, what we have said presumably applies to others who, like the plaintiff, have significant interests in pre-1958 trusts or other grants or devises, subject only to divestment by predeceasing an existing beneficiary or to dilution through the birth of others. Because of the uncertainty whether the 2009 amendment could constitutionally be applied retroactively, we think it is appropriate to clarify that our decision does not make unreasonable any distributions to adopted beneficiaries made in reliance on the 2009 amendment between July 1, 2010, and the date of this opinion, nor does it make unreasonable a trustee’s declination to make such distributions. Although “[b]eneficiaries of a trust are entitled to the protection of the courts where there is a clear abuse of discretion or where the exercise of judgment by a fiduciary is clearly inconsistent with a due appreciation of his responsibilities as a fiduciary,” McMahon v. Krapf, 323 Mass. 118, 124 (1948), in light of the uncertain state of the law, neither of the above- mentioned actions would be an abuse of discretion or clearly inconsistent with a trustee’s responsibilities.”
The BBA deeply appreciates the work of its Amicus Committee for bringing to light issues that have an impact on the entire bar.