When Is a Trust Considered “Revocable” under Massachusetts Law, and Is It Unethical for a Governmental Lawyer Representing a State Agency to Misrepresent This Basic Information at a Fair Hearing?
Under current law, Massachusetts General Laws, Chapter 203E, Section 602, a trust is presumed to be revocable and amendable “[u]nless the terms of a trust expressly provide that the trust is irrevocable.” This law is part of the Massachusetts Uniform Trust Code, which took effect on July 8, 2012. Under Section 64 of the enactment of the Massachusetts Uniform Trust Code, “Subsection (a) of section 602 of chapter 203E of the General Laws shall not apply to trust instruments executed before the effective date of this act.” Thus, the current presumption that a trust is revocable does not apply to trusts executed before July 8, 2012. (This presumption and its effective date were elucidated clearly and unambiguously by Courtney J. Maloney, Esq. and Professor Charles E. Rounds, Jr. on pages 27 and 31 in their December 2014 Massachusetts Law Review article entitled The Massachusetts Uniform Trust Code: Context, Content, and Critique.)
Before July 8, 2012, the presumption about a trust was exactly the opposite; a trust was presumed to be irrevocable unless it stated that it was intended to be revocable. See, for example, Phelps v. State Street Trust Company, 330 Mass. 511 (1953), where the Supreme Judicial Court wrote: “The law of Massachusetts is plain that a valid trust, once created, cannot be revoked or altered except by the exercise of a reserved power to do so, which must be exercised in strict conformity to its terms.”
Unfortunately, it appears that this law was intentionally or negligently misrepresented at a recent fair hearing by Attorney Katherine M. “Katy” Schelong. See Appeal 1609134, where the hearing officer ruled that the new presumption of revocability in the law applied to a trust established on July 16, 1999, rendering all of its assets countable. That is exactly what Schelong’s memorandum had argued, as she had quoted from the new law twice (on pages 1 and 8) but had not bothered to mention its effective date. Thus, Schelong’s misrepresentation of law was not a minor one, was repeated for effect and had a direct result on the outcome of the case.
There have been hundreds of fair hearings regarding trusts in the past few years, and in many of them Schelong had made all sorts of nonsensical revocability arguments about the trusts she was attacking (see Do the Lawyers Representing the Office of Medicaid in Massachusetts Know What a Revocable Trust Is?), so it is beyond me why an experienced hearing officer would not have known about these presumptions of law. Perhaps the hearing officer’s lack of basic knowledge about trust law is due to the failure of the Director of the Board of Hearings to provide proper training, as she is required to do under Massachusetts General Laws, Chapter 118E, Section 48.
Still, the failure of the Director of the Board of Hearings to do her job effectively does not mean that a governmental lawyer representing a state agency should feel emboldened to see if she can get away with misstating the law. It is surprising that this lawyer would not have been shamed into stopping such tactics by her colleagues at the Office of Medicaid and the Office of the Attorney General, so perhaps the misrepresentation problem runs much deeper.