The Massachusetts Uniform Probate Code (MUPC): A New Law Substantially Effecting Inheritance, Wills, Trusts, and Estate Administration
© Attorney Douglas R. Peterson 2013
On March 31, 2012 the “Uniform Probate Code”, an extensive and important piece of legislation which has been decades in the making, finally became effective. The law is referred to as “Uniform” because it makes Massachusetts law, at least on the surface, look more like the laws of other states in areas of probate and trust administration, guardianships and conservatorships. The provisions for guardianships and conservatorships went into effect on July 1, 2009 and the rest of the act was so extensive that it’s effective date was extended for two and one-half years to permit the judges, administrators and other court personnel as well as practicing lawyers to ready themselves. Most of the changes are embodied in a new Chapter 190B of the Massachusetts General laws. However, this new law contains in excess of three dozen sections repealing all or portions of existing Chapters of the General Laws. Because only portions of many chapters are repealed, it is still not possible to find all the applicable statutes in one convenient location even after this massive overhaul. Although one purpose of the law is to make estate administration quicker and easier for uncontested cases, the new law is still rife with possibilities for conflict and litigation.
Among many other things, this new law effects the requirements for wills, the ability to disinherit children, spousal rights, how intestate shares are calculated and distributed where there is no will, as well as the laws concerning durable powers of attorney. It is interesting to note that conspicuous by its absence from this extensive legislation was an update on the law concerning spousal rights where one spouse attempts to disinherit the other. That piece of legislation somehow got sidetracked from the Uniform Probate Code process and bogged down. As it stands, the old law in that area applies except as to wills existing at the time of the marriage. Given the importance of the issue to Medicaid planning and the ability of the State to seek estate recovery for benefits paid, we expect this will be enacted sometime soon. Additional details on some of the more important changes follow.
II. New Uniform Probate Code Increases Inheritance Rights of Surviving Spouses
Beginning with dates of death after the effective date of the law, the inheritance rights of surviving spouses in Massachusetts will be increased substantially. Under the old law the rights of the surviving spouse to inherit where there is no will were dependent upon the size of the probate estate and whether or not the decedent left issue (children, grandchildren, great grandchildren, etc) or other kin. Where the probate estate was less than $200,000 and the decedent left no issue, the spouse inherited it all, but if there were surviving issue, the spouse inherited only one-half of the estate. If the probate estate exceeded $200,000 and there were no kin besides the spouse (highly unlikely), he or she inherited the entire estate, but if there are issue surviving, one-half the estate, or if there are no issue but are other kin surviving, inherited the first $200,000 plus one-half of the excess over $200,000.
Under the new law the surviving spouse is entitled to the entire estate if (i) no descendant or parent of the decedent survives the decedent; or (ii) all of the decedent’s surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent. The spouse is entitled to the first $200,000, plus ¾ of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent. If all of the decedent’s surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent or if one or more of the decedent’s surviving descendants are not descendants of the surviving spouse, the amount is the first $100,000 plus ½ of any balance of the intestate estate.
In other words, if all the surviving issue of the decedent are also issue of the surviving spouse (issue of the marriage), the surviving spouse inherits it all. If either the decedent or the surviving spouse has issue from other marriages or relationships (e.g. stepchildren), the amount is the first $100,000 and one half the balance. If there are no descendants of the deceased spouse, the surviving spouse also inherits all, unless there is a parent of the deceased spouse, in which case the amount is the first $200,000 plus ¾ of the balance of the estate.
This law has been so long in coming about, and is viewed as a victory for those seeking the goal of providing 100% inheritance in the case where the spouses had only children of their one marriage. However, over time that goal has been outstripped by the changes in marital patterns where more people now have children by multiple marriages or non marital relationships or are not even legally married. In the case of either spouse having a child by another marriage or relationship, the marital share is cut in half. The old law provided no such reduction if the surviving spouse had such a child. A well drawn will takes the estate out of the operation this law. The Uniform Probate Code does not touch upon the law regarding a spouse’s right to take a share of the estate contrary to the provisions of the decedent’s will, with the sole exception of provisions dealing with wills existing before the marriage takes place. Under the old law, the marriage revoked the will. Under these new provisions the surviving spouse is entitled to her normal intestate share of any portion of the estate not going under the will to issue of the decedent born before the marriage UNLESS 1) it appears from the will that it was made in contemplation of the marriage to the spouse; or 2) the will contains a general provision that it remain in effect notwithstanding any subsequent marriage; or 3) the testator provided for the spouse by transfer outside the will and an intent that the transfer be in lieu of a testamentary provision is shown by the testator’s statements or is reasonably inferred from the amount of the transfer or other evidence. The implications of this for prenuptial planning should not go unnoticed. In many instances a new will may be more important than a prenuptial agreement.
What if there is a will, but the decedent has attempted to disinherit the spouse by leaving the spouse nothing or a token bequest? Many people assume incorrectly that they can disinherit their spouse simply by drawing a will that excludes them and may even try to draft their own will to do so.
In Massachusetts the spouse has the right to waive the will and elect to inherit what is often called the statutory forced share. However, the statutory forced share is significantly less than the amount that the spouse would be entitled to by inheritance if there were no will. If there are surviving issue, the amount is one-third but only $25,000 outright and an income or life interest in the balance of the third over $25,000. If there are no issue surviving but other kin, the amount is the first $25,000 outright plus an income or life interest in one-half of the balance. If there are no issue or other kin surviving, the spouse gets the first $25,000 and one-half of the balance of the estate outright. The spousal waiver of the will must be properly exercised within 6 months of the probating of the will. If the waiver is elected, and the spouse will receive an income interest in a portion of the estate, those who would inherit under the will receive nothing until after the death of the surviving spouse. It is not unusual for such cases to be settled along other lines.
It is possible to escape the operation of all of these statutes by successfully avoiding probate. However, in Massachusetts it has been held that assets held in a revocable trust are included as part of the probate estate in determining the rights of a surviving spouse. It is also quite likely that new legislation affecting the statutory forced share will redefine the “probate” estate for purposes of determining the surviving spouse’s rights. These rights are also prime subjects of negotiation in prenuptial agreements. Section 505 A (3) under the Uniform Trust Code signed into law on July 8, 2012 with regard to revocable trusts only provides that ‘After the death of a Settlor, and subject to the Settlor’s right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the Settlor’s death shall be subject to claims of the Settlor’s creditors, the expenses of the Settlor’s funeral and disposal of remains and statutory allowances to a surviving spouse and children to the extent the Settlor’s probate estate is inadequate to satisfy those claims, expenses and allowances.” This does not extend to inheritance rights or to rights under the forced statutory share, and it remains to be seen if this provision has changed the existing law by excluding such interests from its scope.
We probably see far less of the statutory forced share in practice today because of the prevalence of divorce ending unsuccessful marriages before death and an increase in prenuptial agreements prior to subsequent marriages. We are likely to see even less of it in view of the new provisions that apply where a will is executed before the marriage, except perhaps in Medicaid cases. If a divorce is pending and not final at the time of death, it abates and the surviving spouse has all statutory rights unless they have been bargained away by a valid contract (such as a prenuptial agreement or separation agreement) that can be enforced against the surviving spouse.
II. The New Uniform Probate Code Changes Intestate Shares of Descendants
Under the new law the intestate shares of descendants will be calculated differently where there has been a death in the nearest generation of survivors. Under the old law, if a person dies unmarried but with children surviving, the estate will be split equally between the children. If a child has predeceased leaving children surviving, those children would take in equal shares the share their parent would have inherited had he or she survived. This is called a per stirpes distribution scheme. Under the new law, the share of the deceased child will be divided among and distributed to all of the grandchildren whose parent/heir predeceased, equally. This is referred to as distribution per capita at each generation. Supposedly this new default distribution scheme for intestate estates was put into the law because the individuals who worked on the law felt that this is what most people prefer, although no scientific poll or survey was conducted to arrive at this conclusion. In comments written in some of the literature generated to support this bill, estate planning lawyers were criticized for never discussing the matter in detail with their clients and using the old per stirpes scheme in most of their wills and trusts. We have always explained and discussed with clients the intestate distribution scheme and other alternatives including the new default as well as class gifts and other more sophisticated plans. Our experience over many years has been that well over 90% of clients preferred the per stirpes scheme contained in the old law. If you are unhappy with this new scheme, the solution is to have a will (or a trust) in place that leaves your estate the way you want it and not the way a few well intentioned lawyers and politicians felt they knew you most likely would prefer it. If you have a will, perhaps it is time to take it out and review it to reassure yourself that it makes the provision you desire. If it does not, or if you do not have a will and do not like the default scheme of distribution provided by this new law, you need to have a will (or trust) done that carries out your wishes.
III. Limitation on a Parent’s Right to Disinherit Child
Also under the new law the right of a parent to disinherit a child is now limited by the provisions of section 2 -403 to be found in the new Chapter 190B of the Massachusetts General Laws. This is certainly bad news and additional consternation for anyone dealing with the pain of having raised a child who has thoroughly earned and richly deserves the distinction of being disinherited by their parent. This law creates a new class of “exempt” assets from a decedent’s personal property and provides an entitlement of the surviving spouse, if there is one, otherwise of all children jointly, to the tangible personal property up to a value of $10,000, and if the tangible personal property is insufficient in value to rise to that level, other assets (such as cash, etc.) to that value.
The new law provides: “The decedent’s surviving spouse is entitled from the estate to a value at date of death, not exceeding $10,000 in excess of any security interests therein, in household furniture, automobiles, furnishings, appliances, and personal effects. If there is no surviving spouse, the decedent’s children are entitled jointly to the same value. If encumbered chattels are selected and the value in excess of security interests, plus that of other exempt property, is less than $10,000, or if there is not $10,000 worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate, if any, to the extent necessary to make up the $10,000 value.” So far no one involved in the passage of this new law has taken credit for being the source of this truly awful idea of piling another layer of hurt upon people suffering with one of life’s more painful tribulations and another layer of difficulty on the administration of their estates.
Until the passage of this law, hailed by many as a great triumph in bringing Massachusetts probate laws into the twenty-first century, a person with a properly worded and executed will could totally disinherit a child from any interest in the estate, and at least could rest assured that they would have neither any claim to their personal affects which would be left to safer caring hands, nor any opportunity to cause contention and aggravation over the distribution of such items. Under this new law, not only will such children have to be notified, but will actually have to be located so as to sign off on their receipt of their due share of the exempt assets in some cases before the property can be distributed and in all cases before the estate can be closed. In situations where children have literally disappeared and are of parts unknown, this is going to put an additional burden on the executor or administrator to locate these children and delay the distribution of this property and the closing of the estate. How twenty-first century that is!
As far as the other side of the coin where children are disinherited undeservedly, the new law gives them nothing but an opportunity to get some personal effects and maybe a little revenge while they are at it.
This new law applies to wills signed before the law went into effect. It is the date of death that controls. There are some things a lawyer can do to either minimize or avoid the burdens created by this law such as getting creative about avoiding probate with tangible personal property. Anyone with a will that intentionally excludes a child should see their attorney to be updated on this problem before considering changing their domicile.
IV. Regarding Instructions on Last Wishes
The Uniform Probate Code provides that executors may carry out written instructions of the decedent relating to the decedent’s body, funeral and burial arrangements before they are even appointed by a probate court. This is a significant change from prior law and will result in some changes in practice when the law goes into effect. We have always advised that a will was usually a poor choice of place to outline such instructions because for the most part, no one would get around to sitting down to go over the will until after the funeral. Moreover, there was never any provision in the law to authorize someone who is merely a named but as yet unappointed executor to carry out such instructions. In cases of dispute, the law came down to issues of ownership of the decedent’s remains and standing as heirs and next of kin. From a practical standpoint, prepaid funeral arrangements have always been and will continue to be effective ways to have one’s wishes carried out and serve other purposes as well for Medicaid long term care eligibility. Nevertheless, this new provision does open up an opportunity for those who have unusually specific or controversial plans or whose plans may otherwise be expected to run into serious opposition from family members.
V. Estate Administration Procedures Totally Overhauled
Under the new law there are entirely new procedures for probating estates, both for cases with wills and intestate cases. There is informal administration available, quicker and easier. There is also formal administration available for disputed cases involving will contests and disagreement over who should serve as the “personal representative” (executor or administrator). There now is available unsupervised administration in an effort to speed up administration except where there a complications and/or disagreements, in which case supervised administration will be required. Virtually all of the court forms have been undergoing revision and are now in use.. The jurisdictional amount for a summary “voluntary” probate or administration has been increased from $15,000 to $25,000. In addition, non Massachusetts residents may now serve as voluntary administrators. The old requirement of having a non resident fiduciary file an appointment of a resident agent for service of process has been abolished.