Sullivan v. Burkin

Massachusetts Supreme Judicial Court
460 N.E.2d 572 (1984)

ELI5:

Rule of Law:

Prospectively, the estate of a decedent, for the purposes of calculating a surviving spouse's statutory elective share, shall include the value of assets held in an inter vivos trust created by the deceased spouse over which they alone retained a general power of appointment.

Facts:

Ernest G. Sullivan and Mary A. Sullivan were a married couple who had been separated for many years.
In 1973, Ernest Sullivan created an inter vivos trust, transferring real estate into it and naming himself as the sole trustee.
The terms of the trust provided that Ernest would receive all income and could withdraw principal for his own benefit at any time.
Ernest also retained the absolute power to revoke the trust.
The trust designated George F. Cronin, Sr., and Harold J. Cronin as the beneficiaries of the trust assets upon Ernest's death.
Ernest Sullivan died in 1981, and his will explicitly stated his intent to leave nothing to his wife, Mary.
Ernest's will contained a 'pour-over' provision, directing that the residue of his probate estate be transferred to the inter vivos trust.

Procedural Posture:

Mary A. Sullivan (plaintiff) filed a complaint in the Probate Court for Suffolk County seeking to have assets from her late husband's inter vivos trust included in his estate.
The Probate Court judge rejected the claim and entered a judgment dismissing the complaint.
Mary A. Sullivan (appellant) appealed the dismissal to the Appeals Court.
A panel of the Appeals Court, recognizing the public significance of the issue, reported the case to the Supreme Judicial Court of Massachusetts for determination.

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Issue:

Does a surviving spouse's statutory right to claim a share of a deceased spouse's estate extend to assets held in a revocable inter vivos trust created by the deceased spouse, over which the deceased spouse retained sole control as trustee and beneficiary during his lifetime?

Opinions:

Majority - Wilkins, J.

No. Under existing precedent, a surviving spouse's right to a statutory share of the deceased's estate does not extend to assets held in a valid inter vivos trust, even where the deceased spouse retained substantial powers over the trust. First, the court determined the trust was a valid inter vivos trust and not an invalid testamentary disposition, because the settlor's retention of extensive powers—including being sole trustee, receiving income, invading principal, and the power to revoke—does not invalidate a trust. Second, the court applied the long-standing rule from Kerwin v. Donaghy, which holds that a person has an absolute right to dispose of their personal property during their lifetime, even for the sole purpose of disinheriting a spouse. Because the legal bar had reasonably relied on this rule for decades, the court declined to apply a new rule retroactively to this case. However, the court announced a new rule for all inter vivos trusts created or amended after the date of this opinion. Prospectively, assets of an inter vivos trust created by a deceased spouse over which they alone held a general power of appointment will be treated as part of the decedent's estate for calculating the surviving spouse's elective share, reasoning it is illogical and inequitable for a surviving spouse to have fewer rights to such assets than a divorced spouse would under modern divorce law.

Analysis:

This decision marks a significant change in Massachusetts law by prospectively overruling the long-standing precedent of Kerwin v. Donaghy. The court modernized its approach to the spousal elective share by effectively creating an 'augmented estate' concept, similar to that in the Uniform Probate Code, which includes assets in revocable trusts. By adopting an objective test based on the decedent's control over trust assets (a general power of appointment), the court moved away from subjective inquiries into the settlor's motive or intent to disinherit. This ruling provides greater protection for surviving spouses against disinheritance through the use of will substitutes and aligns the rights of surviving spouses more closely with those of divorcing spouses.

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