SENATE DOCKET, NO. 1203        FILED ON: 1/18/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 683

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Cynthia S. Creem

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relating to the payment of interest on pecuniary legacies and pecuniary distributions under a trust instrument.

_______________

PETITION OF:

SENATE DOCKET, NO. 1203        FILED ON: 1/18/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 683

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 732 OF 2011-2012.]

The Commonwealth of Massachusetts

_______________

In the Year Two Thousand Thirteen

_______________

An Act relating to the payment of interest on pecuniary legacies and pecuniary distributions under a trust instrument.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

                SECTION 1. Chapter 197 of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by striking out section 20 and inserting in place thereof the following section:-

                Section 20. The rate of interest upon pecuniary legacies under a will or trust shall be the Federal short term rate (for Annual Period for Compounding purposes) determined by the Secretary of the Treasury in accordance with Section 1274(d) of the Internal Revenue Code, as amended and then in effect, for the month during which interest first becomes payable, rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, such rate shall be increased to the next highest full percent). Such rate of interest, once established, shall apply per annum (without compounding) until a pecuniary legacy or pecuniary distribution is paid in full, regardless of any subsequent change in the Federal short-term rate. Unless otherwise provided in the will or trust, interest shall be payable from the date of the expiration of the period within which creditors may bring actions against an executor or administrator as provided in Section 9, or six months from the date upon which the distribution is required by the trust, except in the case of a trust subject to the claims of creditors as provided in Section 9, in which event interest shall be payable from the expiration of the longer of the two periods of time specified in this sentence.

                SECTION 2.  Chapter 190B of the General Laws is hereby amended by striking out section 3-904 and inserting in place thereof the following section:-

                Section 3-904.  The rate of interest upon pecuniary legacies under a will or trust shall be the Federal short term rate (for Annual Period for Compounding purposes) determined by the Secretary of the Treasury in accordance with Section 1274(d) of the Internal Revenue Code, as amended and then in effect, for the month during which interest first becomes payable, rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, such rate shall be increased to the next highest full percent). Such rate of interest, once established, shall apply per annum (without compounding) until a pecuniary legacy or pecuniary distribution is paid in full, regardless of any subsequent change in the Federal short-term rate. Unless otherwise provided in the will or trust, interest shall be payable from the date of the expiration of the period within which creditors may bring actions against an executor or administrator as provided in Section 9, or six months from the date upon which the distribution is required by the trust, except in the case of a trust subject to the claims of creditors as provided in Section 9, in which event interest shall be payable from the expiration of the longer of the two periods of time specified in this sentence.

                SECTION 3. The provisions of this act shall apply to estates of persons dying on or after the effective date of this act.