Thursday, May. 21, 2009
Take action: Delay effective date of Chapter 524, the "New Adopted Children's Rights Law"
Trustees can be held personally liable for incorrect distributions made to the wrong beneficiary
On Jan. 15, Gov. Deval Patrick signed into law Chapter 524 of the Acts of 2008. This new law changed the clearly understood rule of construction that applied to terms like "child," "grandchild" and "issue" in wills, trusts and similar instruments executed before Aug. 26, 1958. When the Legislature modernized the law in 1958 to presume that adopted persons are included in such terms
unless the instrument plainly states otherwise
― it made the law effective only to instruments executed after its effective date.
Chapter 524, effective April 15, 2009, provides quite simply, "Section 8 of chapter 210 of the General Laws [which contains the presumption including adopted persons in terms like "child," "grandchild" and "issue"] shall apply to all grants, trust settlements, entails, devises or bequests executed at any time, but this section shall not affect distributions made before May 1, 2009 under testamentary instruments executed before September 1, 1969." Click here for the text of Chapter 524.
Trustees are now working aggressively to review all the pre-1958 trusts they administered to determine whether there are adopted persons who should now be included as beneficiaries entitled to current distributions. This includes not only reviewing trust instruments, but talking with family members and reviewing family relationships. Trustees can be held personally liable for distributions made to the wrong beneficiary after May 1, 2009.
The Massachusetts Bar Association is working closely with the Boston Bar Association and the Massachusetts Bankers Association in an effort to postpone the effective date of Chapter 524. Senate Judiciary Chair Cynthia Stone Creem (D-Newton) has filed an MBA amendment to the Senate budget (#126) listed below, that would postpone the effective date until July 1, 2010, to allow for more time to correct the problems created by the passage of Chapter 524. Unfortunately, the amendment does not affect any distributions made from April 15, 2009 until the date the FY 2010 budget might be signed into law (most likely July 1, 2009). We ask that you support Sen. Creem's amendment #126, and to contact your local senators now to urge them to support the amendment on the Senate floor.Your senator's phone number can be found at:
To help understand and learn more about the issue, click here to review the full memorandum on Chapter 524 prepared by Mark J. Bloostein at Ropes and Gray LLP.
For further information, contact MBA General Counsel Martin W. Healy at [e-mail mhealy].
Amendment # 126 introduced by Sen. Cynthia Stone Creem
CHAPTER 524 OF THE ACTS OF 2008
Sen. Creem moved that the bill be amended by adding the following new sections:-SECTION __. Chapter 524 of the acts of 2008 is hereby amended by adding the following section:- "Section 2. This act shall take effect on July 1, 2010. SECTION __. This act shall take effect as of July 1, 2010; provided, however, that nothing in this act shall affect the validity of any action taken pursuant to chapter 524 of the acts of 2008 between April 15, 2009 and the passage of this act.