Tools to determine intent and keep the peace
Fiduciaries have a lot of authority; the proverbial buck stops
with them. And with all that discretion, not to mention all that
fiduciary duty, fiduciaries must have all the answers, right?
Aren't they the omniscient wizards of wills and trusts?
Believe it or not, trustees and personal representatives do not
have all the answers. Neither do their wise counsel. Sometimes an
instrument is clear as mud. Or it is internally inconsistent. Or
the beneficiaries have different opinions about what a fiduciary
should or should not do.
When questions about the interpretation of an instrument persist,
petitions (or sometimes complaints) for instructions and complaints
for declaratory judgment utilize the probate court's equity
jurisdiction to solve issues that may or may not be adversarial.
While a petition for instructions takes a neutral position, a
complaint for a declaratory judgment defines a controversy and then
advocates for a specific resolution.
A petition for instructions asks the court, "what do we do?" A
fiduciary typically files the petition, seeking specific direction
from the court in the form of a judgment. The judgment resolves the
legal question and provides guidance to the fiduciary, successor
fiduciaries and beneficiaries.
The judgment also should insulate a fiduciary from liability for
actions the fiduciary takes in accordance with the judgment. A
petition for instructions and the resulting judgment take some of
the guesswork out of fulfilling fiduciary obligations and thus
should help avoid, or at least minimize, conflicts with
beneficiaries and the potential claims for breach of fiduciary duty
that can arise from those conflicts.
In addition to how to interpret an ambiguous instrument, questions
asked by a petition for instructions can include how to make
distributions, how to value assets, whether or not there is
authority to take action, how to apply or interpret relevant law,
and whether adopted issue have the same rights as biological issue.
A petition for instructions must address a present issue. It cannot
request direction on a future duty, hypothetical action or
ratification of the fiduciary's past conduct.
A petition for instructions is specifically permitted by the
Massachusetts Uniform Trust Code (MUTC). G.L.c. 203E, §§ 302-04. It
must be served upon all interested parties. A citation may also
direct publication of the proceedings. In many cases, the fiduciary
may seek and/or the court may require the appointment of a guardian
ad litem to represent the interests of minors,
incapacitated or unascertained beneficiaries. Virtual
representation under the MUTC may minimize the need for a guardian
ad litem in some circumstances.
A petition for instructions can provide a context for interested
parties, usually differing beneficiaries or factions of
beneficiaries, to litigate if they seek to take a position on the
issues. Often, once the petition tees up the issues, a fiduciary
can watch from the sidelines as beneficiaries with opposing legal
For example, a will may be ambiguous about the distribution of a
share of a beneficiary who predeceased the testator. A literal
reading of one sentence seems to indicate the share passes to the
testator's surviving siblings and a literal reading of another
sentence seems to indicate the share passes to the issue of the
surviving siblings. Everyone agrees that the drafting is poor and
ambiguous. Rather than make a distribution that may or may not be
consistent with the testator's intent or that may or may not anger
the siblings or the issue of the siblings, the personal
representative should file a petition for instructions. The
siblings or issue of the siblings' can then decide whether or not
to advocate in a favor of one interpretation and potentially
litigate against those who have a different interpretation.
Litigation of the issues raised by a petition for instructions is
governed by the interplay of the Supplemental Rules of the Probate
and Family Court and the Massachusetts Rules of Civil Procedure.
Interested parties often choose not to appear, agreeing that an
instrument is ambiguous and willing to let the court decide
whatever the court decides. Or interested parties may file an
appearance, answer and engage in discovery, particularly if the
issue concerns a settlor's or testator's intent. Interested parties
may file counterclaim or cross-claim for a declaratory judgment
asserting his/her/their view of the appropriate outcome.
The petitioner is typically eager to obtain a judgment as soon as
possible. The petitioner often must coordinate the advancement of
the case since the fiduciary is often most interested in an
expeditious resolution. If no interested parties appear, the
petitioner should request a status or pretrial conference to
ascertain how the court wishes to advance and adjudicate the
matter. A court may request legal memorandum from the petitioner on
the issues. While the petitioner will not take a position on the
matter, the petitioner can explain the pending issues and relevant
law. The petition should try to ensure that a judgment is
comprehensive, answering the questions raised and providing
sufficient analysis so that the judgment is defensible to
interested parties and successor fiduciaries.
If interested parties appear in the action, they may file
cross-motions for judgment on the pleadings or cross-motions for
summary judgment. If material facts are in dispute, as is often the
case in matters of intent, an evidentiary hearing may be necessary
in order for the court to issue the requested instructions.
Like other cases, settlement may be appropriate in order to
minimize fees and achieve a modicum of harmony among interested
parties. A fiduciary will almost always seek to have the settlement
agreement entered as a judgment to minimize liability and to
provide explanation to others, known and unknown, who have an
interest in the matter. Any settlement should be consistent with
the settlor's or testator's likely intent, agreeable to a
sufficient number of interested parties, particularly those who
have appeared, and within the scope of the fiduciary's
A petitioner's fee may be paid from the estate or the trust.
Respondent's fees are with the court's discretion as "justice and
equity" permit under G.L.c. 215, §45. An award of fees to a
respondent is unlikely given that although respondents in a
petition for instruction may disagree on the outcome, they
generally agree of the necessity of the proceedings.
Unlike a petition for instructions, complaint for a declaratory
judgment provides a context for a fiduciary or another interested
party to take a definitive position on a matter concerning
interpretation of a trust or will. Under G.L. c. 234, §1, a
declaratory judgment seeks a binding declaration of a "right, duty,
status and other legal relations thereby, either before or after a
breach or violation thereof has occurred." A complaint for
declaratory judgment in the probate court may address similar
issues as a petition for instructions, but the complaint for
declaratory judgment defines a present or anticipated controversy
and advocates for a specific resolution.
A fiduciary may file a complaint for declaratory judgment in order
to preempt more adversarial litigation, such as a potential breach
of fiduciary duty claim that may be brewing among unhappy
beneficiaries. The declaration would settle the controversy and
remove uncertainty for all interested parties. If the fiduciary
acts in accordance with the declaration, the fiduciary would be
insulated from liability.
While a complaint for declaratory judgment is an adversarial
proceeding, it is often considered the least adversarial type of
lawsuit. Nevertheless, it may create conflicts between fiduciaries
and beneficiaries or between factions of beneficiaries. The
complaint provides a context for differing parties to litigate,
sometimes very assertively. Defendants typically file a
counterclaim seeking a declaration consistent with their view of
the issues. The litigation may require discovery and a trial,
particularly if intent is at issue. A declaratory judgment action
certainly can be settled if a sufficient number of interested
parties assent. The parties will typical seek to memorialize the
settlement as a judgment in order to settle the controversy now and
in the future.
In probate matters, rightly so, courts are most concerned with
honoring the intent of settlors and testators. Wills and trusts
typically provide the window into that intent. But when they don't,
petitions for instructions and complaints for declaratory judgment
provide fiduciaries and beneficiaries tools that help ensure
precise interpretation of instruments and, perhaps more
importantly, help all interested parties, particularly trustees and
personal representatives, sleep a little better at night.