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Trustees: Indefinite Reference

Trusts and Trustees

Prior to the passage of the Indefinite Reference Statute (G.L.c. 184, §25), a deed to persons as "trustees" without a reference to the place of recording or the terms of the trust rendered the title hopelessly unmarketable. Cleval v. Sullivan, 258 Mass. 348 (1927). The statute was enacted to correct this inequity and in this way created a shield, not a sword, making an otherwise bad title good. The Indefinite Reference Statutes states, in relevant part:

No indefinite reference in a recorded instrument shall subject any person not an immediate party thereto to any interest in real estate, legal or equitable, nor put any such person on inquiry with respect to such interest, nor be a cloud on or otherwise adversely affect the title of any such person acquiring the real estate under such recorded instrument if he is not otherwise subject to it or on notice of it. An indefinite reference means * * * (3) a description of a person as trustee or an indication that a person is acting as trustee, unless the instrument containing the description or indication either sets forth the terms of the trust or specifies a recorded instrument which sets forth its terms and the place in the public records where such instrument is recorded * * * *

Note that the statute by its terms is applicable only as to a "person not an immediate party to" the instrument. The grantees in a deed that describes them as trustees are parties to the instrument containing the indefinite reference and the title they take as trustees they hold in that capacity, indefinite reference or not.[1]

1 The Indefinite Reference Statute protects third parties from being bound by the terms of a trust that they cannot find; the statute does not transform a title taken by a person as a trustee to his individual use.