Creating a trust in Massachusetts requires a clear intention to establish such an arrangement. The settlor, or person establishing the trust, must manifest this intention, which is typically evaluated as a question of fact. As noted by the Massachusetts Supreme Judicial Court, ‘[W]hether a trust is created depends primarily upon the manifestation by the parties of an intention to create a trust and that is ordinarily a question of fact.’ Russell v. Myers, 316 Mass. 669, 672 (1944). This intention can be shown through various forms such as written documents, physical acts, or even spoken words.
Written Documents
One of the most common ways to manifest the intention to create a trust is through a written document. This can take the form of an inter vivos trust, which is created during the settlor’s lifetime, or a testamentary trust, which takes effect upon the settlor’s death, typically through their will. Although it might seem that written documents should clearly indicate the intent to create a trust, this is not always the case.
Physical Acts
In some cases, a trust can be manifested through physical acts. In Russell v. Myers, 316 Mass. 669 (1944), a husband transferred funds to his wife, which she deposited into joint accounts with her sister. After the wife’s death, the husband sought to reclaim the funds, arguing that they had been held in trust for him. However, the Supreme Judicial Court found no evidence that a trust had been intended, holding that, absent proof of such intention, the funds were presumed to be used at the discretion of the recipient. Russell v. Myers, 316 Mass. at 673.
Spoken Words: Oral Trusts
Massachusetts courts have recognized that trusts can be established through spoken words, or oral trusts. In Cooney v. Montana, 347 Mass. 29 (1964), a decedent named his sister as the beneficiary of a life insurance policy, but informed her that the proceeds were intended for his two daughters and stepdaughter. Following his death, the daughters’ guardians sued to enforce the oral trust.
In evaluating whether an express trust had been created, the court acknowledged that parol evidence could be used to prove the existence of a trust. The court also made it clear that ‘no particular form of words is necessary’ to create a trust, but the words used must unequivocally show an intention to have one person hold property for the benefit of another. Cooney v. Montana, 347 Mass. at 34–35. The court emphasized that the absence of the word ‘trust’ does not preclude the finding of one, and that the surrounding circumstances play a critical role in determining whether an enforceable trust was established.
In this case, the court ultimately found that an express trust had been created. Factors such as the decedent’s purpose in obtaining the life insurance policy, his intention to provide for his daughters and stepdaughter, and the nature of his discussions with his sister were considered in reaching this conclusion. Cooney v. Montana, 347 Mass. at 35–36.
However, while oral trusts are recognized, there are limits. For instance, under G.L. c. 203, § 1, any trust involving real property must be in writing to be valid. This written document must be signed by the party creating the trust.
Conclusion
The creation of a trust in Massachusetts hinges on a clear demonstration of the settlor’s intent, which can be expressed in various forms—whether through a written document, physical actions, or spoken words. However, specific formalities, such as the requirement of a written instrument for trusts involving real property, must also be observed. Massachusetts law, as reflected in court decisions and statutes, continues to shape the nuanced requirements for creating and enforcing trusts. Understanding these principles is crucial for anyone looking to establish a trust in the Commonwealth.
As always, it is advisable to consult with a legal professional to ensure that the necessary steps are followed and that the trust complies with all applicable legal requirements.
