S. NANCY SIMCHES, trustee, 1Link to the text of the note vs. S. NANCY SIMCHES, trustee, 2Link to the text of the note & others. 3Link to the text of the note, 423 Mass. 683


Summary

The trustee established a QPR trust pursuant to I.R.C. § 2702 (1994) and transferred her vacation property into that trust. Under the trust instrument, if the trustee survived the 10-year period, the property would have been distributed to a nominee trust for the benefit of her grandchildren. In creating the QPR trust to minimize the tax burden on the transfer of the property, the trustee overlooked the fact that the generation-skipping transfer (GST) tax would apply to the transfer at the end of the trust term. Thus, the trustee filed an action to have the trust instrument reformed by substituting her children for the nominee trust as beneficiaries of the QPR trust. The court granted the trustee's request. The court held that reformation was justified by the doctrine of mistake. The trustee provided ample proof that a mistake was made as to the tax consequences of naming the nominee trust as the sole beneficiary and that she would have named her children instead had she understood the...