Massachusetts Appeals Court Reviews Life Estates in New Case

A life estate is an interest in real property for the duration of a person’s life, that person is known as the “life tenant.” The life estate ends at death and ownership of the property then passes to a “remainderman.” In the case below, the Massachusetts Appeals Court discusses what happens when the remainderman predeceases the life tenant.

In the Massachusetts Appeals court case of Dell’Olio v. Assistant Secretary of the Office of Medicaid No.18-P-1489 (2019), the testator, Andrew Dell’Olio, who died in 1956, owned two adjacent triple deckers in Cambridge. His one-page will devised the property to various family members as life tenants, and after their deaths, to his grandchildren. The relevant portion of the will is stated as follows:

“All the real estate and more specifically number 27 Berkshire Street, Cambridge, Mass., and number 27 Plymouth Street, Cambridge, Massachusetts in the County of Middlesex, I leave to my wife Emilia Dell’Olio for the duration of her life, during which time she is to collect all rents from which she is to pay all bills for the upkeep of the buildings, except that she is not to collect from my son Richard Dell’Olio and my daughter Louise Camara, each of which is to have one flat free of rent so long as said Emilia Dell’Olio lives. Upon the death of my wife the aforementioned property is to pass to my son Richard Dell’Olio and my daughter Louise Camara for their lives and upon their death to their children in fee, each child to share and share alike. The Children are not to take by right of representation. In the event that either my son or daughter dies the widow or widower whichever the case may be is to have the same rights as their spouse until the said property vests in my grandchildren. I further direct that all life tenants are to keep the property in good repair at all times.”

The oldest granddaughter, Emily, was eight years old at the time of his death. Emily suffered from a mental disability and was institutionalized. Her care was subsidized by MassHealth and by the time of her death in 2008, the cost was $1.2 million dollars. Where Emily died before the life tenant, the question arose: When did Emily’s remainder interest vest?

• If Emily’s remainder interest had vested at the time of the grandfather’s death and was not contingent upon her surviving the life tenant, her interest would devolve to her heirs at law and be subject to her creditors (this was MassHealth’s position).
• If the vesting of Emily’s remainder interest was contingent upon her surviving the life tenant, it would have been extinguished upon her death and her share would go to the other grandchildren (this was the surviving grandchildren’s position).

This case was brought by three of the surviving grandchildren on a Petition to Partition in the Probate and Family Court. After a hearing on summary judgment, the Probate and Family Court held in favor of the family. MassHealth appealed.

In its analysis, the Appeals Court reviewed a fundamental rule of law – a presumption that all devises and bequests vest upon the death of a testator. The Court stated that a will generally intends to give vested interests and that this is strengthened when the provision is for the benefit of a direct descendant. However, this presumption can be overcome if the will includes specific language stating that vesting should be postponed until the death of the life tenant.

The Court then discussed the difference between vesting “in interest” and vesting “in possession.” If the remainder interests created by the will are not made contingent on future events, they are said to vest “in interest” upon the death of the testator. Once the remainder has gained the right to occupy and enjoy the property, they are said to vest “in possession.”

The grandchildren argued that where the grandfather’s will contained some language regarding vesting after the death of the life tenant i.e. “until said property vests in my grandchildren” that was sufficient to prove that Emily’s interest would not vest until the death of the life tenant and her share would be extinguished at her death, resulting in a greater share for the grandchildren. MassHealth argued that the language in the will was not enough to overcome the strong presumption that Emily was granted a vested interest at the time of her grandfather’s death.

Lastly, the Court pointed to the grandfather’s intent to keep the properties available as a family homestead. If, for example, Emily had children, and the Court agreed that Emily’s interest did not vest until the death of the life tenant, her children would inherit nothing. This would be inconsistent with the grandfather’s intent in his will.

The Court concluded that the surviving grandchildren did not make a sufficient showing to overcome the strong presumption that Emily was granted a vested interest when her grandfather died and that for her estate to inherit was consistent with the intent in his will. Therefore, the decision of the Probate and Family Court was reversed, paving the way for MassHealth to recover from Emily’s estate.