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Partitioning Real Estate Owned By A Trust

Trustees sometimes face beneficiaries disagreeing about how to maintain real estate owned by a trust, such as a family vacation home.  But does a trustee have standing to bring a partition action to sell Massachusetts real estate?  Likely not.  

Under Massachusetts's partition statute, M.G.L. c. 241, § 1,  "[a]ny person, except a tenant by the entirety, owning a present undivided legal estate in land, not subject to redemption, shall be entitled to have partition in the manner hereinafter provided."  Based on this broad statutory language, "any person" can bring a partition action.  This presumably includes a trustee because he is "the legal title holder of trust property, and is therefore a "person . . . owning a present undivided legal estate in land.  It is the beneficiary who has only an equitable interest."  See Arthur L. Eno, Jr. et al., Partition, 28 Mass. Prac. § 17.23 (4th ed.). Two very old cases held that a trustee can petition for partition, and there have been no cases addressing or explicitly overruling these older cases.  See Phelps v. Townsley, 92 Mass. (10 Allen) 554, 555 (1865) and Winthrop v. Minot, 63 Mass. (9 Cush.) 405 (1852). 

Despite this nonrestrictive statutory language and old case law, however, three recent Massachusetts Land Court decisions have held that property held in trust is not subject to partition.  See Liporto v. Liporto, 2012 WL 5494612, at *4 (Land Ct. Nov. 13, 2012) ("To be sure, the defendants are correct that property owned by trust is not subject to partition.  See Rolland v. Hamilton, 314 Mass. 56, 60 (1943)"); Dowd v. Stebbins, 2009 WL 1915207, at *8 (Land. Ct. July 6, 2009) ("Trust property is not subject to partition, Rolland v. Hamilton, 314 Mass. 56, 60 (1943), G.L. c. 241, § 1.  A trust estate is not contemplated by G.L. c. 241, § 1."); Buell v. Rubin, 2005 WL 2995494, at *4 (Land Ct. Nov. 9, 2005) ("Properties owned in trust are not subject to partition, Rolland v. Hamilton, 314 Mass. 56, 60 (1943), nor are those held in partnership.").  

All of these cases cite an old Supreme Judicial Court case, Rolland v. Hamilton, 314 Mass. 56, 60 (1943), that recognized "[o]nly a legal estate is the subject of partition, G.L. c. 241, § 1, Devine v. Deckrow, 299 Mass. 28, 33 (1937), and if there is a trust this [partition] proceeding cannot be maintained."  The case cited by the Rolland court, Devine v. Deckrow, 299 Mass. 28, 33 (1937), stated that "the petitioner was not, as provided in G.L c. 241, § 1, the owner of a present undivided legal estate in the land in question and therefore had no standing to bring the petition for partition."  

Recent secondary sources recognize that trust property is not subject to partition.  See Francis T. Talty, et al., Persons Not Entitled to Partition, 5 Mass. Prac. § 16.4 (4th ed.) ("Only a legal estate is the subject of partition and if there is a trust a partition proceeding cannot be maintained."); Sean M. Dunphy, Who May Have Partition, 21 Mass. Prac. § 16.3 (2d ed.) ("If real estate is held in trust no partition is possible since only a present undivided legal estate in land is subject to partition.").   See also Arthur L. Eno, Jr. et al., Partition, 28 Mass. Prac. § 17.23, n.8 (4th ed.) (recognizing "Massachusetts case law is divided on the question of whether a trustee of property held in trust may bring an action for partition").

Based on recent case law, a trustee lacks standing to file a partition action concerning real estate owned by a trust.  Moreover, if there is a dispute between beneficiaries concerning the property, a beneficiary could argue that a partition action will not maximize the value of the real estate, thereby potentially exposing the trustee to liability. 

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