Probate Matters: Donald Desmarais Individually and as Executror(ix) of the Estate of Howard Loring vs. Stephen Price Individually and as trustee of Charles Loring Trust

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COMMONWEALTH OF MASSACHUSETTS -

ESSEX, ss. SUPERIOR COURT
DOCKET NO. ESCV2013-00497
DONALD DESMARAIS, Individually and as
Executor of the Estate of Howard Loring,
Plaintiff
IN THE SUPER!OR COURT
v. FOR THE COUNTY OF ESSEX
STEPHEN PRICE, Individually and as Trustee of MAR 29 2018
the Charles Loring Trust, ,
Defendant lon Gti ie
erendan CLERK

Consolidated With
COMMONWEALTH OF MASSACHUSETTS

ESSEX, ss. PROBATE & FAMILY COURT
No. ES08P2645EA

IN RE: Charles Loring Trust

DEFENDANT’S MEMORANDUM IN PARTIAL OPPOSITION TO MOTION
OF PLAINTIFF HOWARD LORING ESTATE TO HAVE THE PROBATE
CASE AND SUPERIOR COURT CASE TO BE HEARD AT ONE TRIAL
AND
DEFENDANT’S CROSS-MOTION TO BIFURCATE TRIAL OF
EQUITABLE COUNTS FROM THE TRIAL OF PROBATE ACCOUNT

Now comes the Defendant, Stephen Price, and partially opposes Plaintifi’s Motion to
Have Probate and Superior Court Case heard at one trial and cross-moves this Honorable Court
to bifurcate the trial of the identical Probate and Superior Court Complaints from the trial, if any,
on the Personal Representative’s First and Final Account in this consolidated matter, such that
the counts for breach of fiduciary duty and unjust enrichment be tried in a bench trial, and then,

if the Plaintiff is successful on either count and can therefore demonstrate standing to object tothe Dr. Price’s accounting’, to thereafter have a second bench trial regarding the accounting, for
the reasons set forth herein.

A. In The Context Of A Testamentary Supplemental Needs Truist With A Value, Net

Of Expenses, Of More Than $600,000, And Where The Plaintiff’s Request For
Distribution Of $29,047.60 Had Been Withdrawn In August 2012 While Howard
Loring Had Moved Out Of The Plaintiff's Rest Home on July 5, 2012, To A Nursing
Home Where He Died In September 2012, The Plaintiff’s Objections To Fiduciary
Fees And Other Alleged Waste Should Not Be Tried As A Trial Of His Entire First
and Final Account, To Which All Remaining Beneficiaries Have Assented; Even If
The Plaintiff Could Succeed On Claims Of Waste, It Would Have No Effect On The
Question Of Whether Distributions Should Have Been Made From The Trust
Which Had More Than Sufficient Assets For Howard.

Howard Loring’s estate is not a remainder beneficiary of Charles Loring’s Will, and this
Honorable Court has dismissed the Plaintiff's clams for (a) interference with Desmarais’s
inheritance, and (b) misrepresentation/fraud. During Howard’s life and prior to distribution to the
remainder beneficiaries, there were more than sufficient funds (over $600,000.00) to cover the
amount of expenses that the Plaintiff was demanding while Howard Loring was alive
($29,047.60, and even that was withdrawn); whether there were some minor improper
expenditures in the accounting (to which all beneficiaries have assented) is immaterial and
irrelevant to the two claims that at least potentially would entitle the Plaintiff to monetary relief,

ie., the claim for breach of fiduciary duty and unjust enrichment. The Defendant was Trustee of

a testamentary supplemental needs trust which explicitly prohibited any distributions which

! As argued herein, if the Plaintiff is unsuccessful in proving that Dr. Price breached his fiduciary duty
and/or cannot prove unjust enrichment, the Plaintiff definitely has no standing to challenge Dr. Price’s
accounting because Howard Loring was not a remainder beneficiary. If the Plaintiff is not entitled to
damages by way of the breach of fiduciary claim or the unjust enrichment claim, the Plaintiff is not
entitled to any of the remainder funds, therefore any alleged discrepancies or impropricties with the
accounting would not affect the Plaintiff in any way. But more importantly, even if the Plaintiff is
successful on those two claims, he stills lacks standing because the claim for accounting is irrelevant as to
the crux of the Plaintiff's complaint because alleged accounting improprieties or fees taken were not the
cause of the lack of distributions, and there were ample trust funds available at the time requests were
made.would have affected Howard Loring’s eligibility for private or public assistance programs? and if
the prohibitions didn’t apply Charles Loring’s Will gave the Defendant “absolute discretion”
over whether to make distributions. (Excerpt of Charles R. Loring’s Will attached as Exhibit 1).
The reason there were no distributions to Howard Loring (the sole allegation of the breach of
fiduciary duty claim and the related unjust enrichment claim) was not that accounting
improprieties caused a depletion of funds rendering the Defendant unable to make payments to
Howard Loring. Rather, the Defendant-Trustee did not make any distributions because he was
complying with the terms of the supplemental needs trust in attempting to ascertain Howard
Loring’s financial situation, and Howard’s attorney-in-fact Donald Desmarais, who was also the
owner of the rest home that stood to gain from said distributions, concealed and misrepresented
Howard’s financial resources even though his attorney acknowledged that he understood “you
will need additional information prior to making a distribution to Mr. Loring” (emphasis added;
letter attached as Exhibit 8).

Less than a year after the death of Howard’s son Charles Ray Loring, Howard’s attorney
(Andrea Lehtonen) was provided with a draft inventory showing personal assets of over
$500,000.00 and real estate estimated at almost $200,000.00. (Attached as Exhibit 3). No
requests for distributions were made until counsel for Desmarais Pall Kalmansson requested

$10,000.00 by letter dated August 2, 2010.4 (Attached as Exhibit 4). Kalmansson referred to

? Where a beneficiary’s eligibility for assistance programs are at issue, distributions can still be made to
the beneficiary, but the types of distributions are restricted, and, generally, it prohibits distributions to
cover housing expenses and large cash distributions directly to the beneficiary.

3 Desmarais repeatedly makes erroneous arguments, based on inapposite cases, that the Defendant was
prohibited from considering Howard Loring’s other resources. He relies on cases where the trust says
distributions may be made for the beneficiary’s “comfort,” “maintenance,” and/or “support,” where as
Charles Loring’s Will contains no such language and only allows distributions for supplemental needs.
See discussion, infra.

4 Kalmansson also said, “Mr. Loring and I have reviewed his eligibility for governmental benefits and
have determined that he is not receiving any such benefits.” However, this simple statement that he was

3Howard’s “insufficient funds to pay for his expenses” at the Plaintiff's rest home, but
Kalmansson and Desmarais concealed the fact that in addition to a bank account and regular
income from social security and the Rose Loring Trust, Howard had an investment account of
$45,000 (attached as Exhibit 5), and in June 2010 the trustees of the Rose Loring Trust (not a
supplemental needs trust) had a approved principal distributions totaling $40,000 to be paid in 5
installments beginning on August 2, 2010, the very date of his letter. (Excerpt of Rose Loring
Trust records attached as Exhibit 6).

Counsel for Dr. Price responded by letter dated September 1, 2010, indicating the terms of
the trust required that Dr. Price first ascertain Howard’s complete financial picture and reiterated
expenditures would need to be for supplemental needs as defined by the trust. (Attached as
Exhibit 7). On September 27, 2010, Kalmansson replied, “I understand you will need additional
information prior to making a distribution to Mr. Loring.” (Attached as Exhibit 8).

No further communications occurred between the parties’ attorneys until Kalmansson
sent a letter on December 13, 2011, stating in pertinent part: “At this time, Mr. Loring has
exhausted his resources and will need financial assistance to pay for his care at his long term
residence James Manor Rest Home in Fitchburg.” (Attached as Exhibit 2). He referenced a
James Manor Rest Home bill, a bank statement and income tax return, but no enclosures were
actually provided, as Attorney Lacey explained in his response letter. Moreover, neither the bank
statement nor Kalmansson’s letter revealed that Howard still had an annuity with a value of
$32,000, (statement attached as Exhibit 9), and that Howard had recently received $10,000 and
had ongoing eligibility for the Rose Loring Trust, which had a total value of approximately

$375,000 at the time, of which $178,000 was specifically for Howard Loring (Trust Records

currently receiving benefits does not address the complicated question of whether Howard may be eligible
for benefits, now or in the future, which was essential information the Defendant needed.

4attached as Exhibit 10); in fact, in all of the many letters exchanged between parties over 3 years,
Desmarais and his attorneys never disclosed either of these assets. Attorney Lacey responded to
Kalmansson’s letter on January 19, 2012, which fairly comprehensively addressed the
information the trustee needed and the analysis the Trustee needed to follow, including the
Trustee’s suspicion that the Plaintiff was not fully disclosing Howard’s resources and financial
arrangements with the Plaintiff. (Attached as Exhibit 11). Moreover, Attorney Lacey noted at the
end of the letter that Kalmansson had not actually included the enclosures he referenced.°

By letter dated July 13, 2012, counsel for Desmarais requested payment of $29,047.60
for various expenses (attached as Exhibit 13), and, furthermore, counsel for Desmarais concealed
that he had made the same request to the Rose Loring Trust (attached as Exhibit 14) that Howard
had moved out of Desmarais’s rest home and had been admitted to Hillcrest Nursing Home on
July 5, 2012, where he stayed until his death on September 29, 2012. (Hospital Record and Death
Certificate attached as Exhibit 15 and 16, respectively). By letter dated July 30, 2012, counsel for
Dr. Price indicated the trust balance was $489,389.26° (attached as Exhibit 17), which is an
amount that obviously was substantially greater than the amount being requested by Desmarais’s
attorney two weeks earlier. By letter dated August 10, 2012, Desmarais informed the
Defendant/Trustee that the expenses requested in the July 13 letter had been paid, but Desmarais
did not explain how they were paid; in reality, the Rose Loring Trust. (Attached as Exhibit 18).
Desmarais made no further specific requests for distributions from the Trustee before Howard’s

death on September 29, 2012, but through discovery it has been learned that the Rose Loring

5 The enclosures, even if they had been provided, are misleading; handwriting on the bank statement
indicates that the $10,000 distribution from the “Rose Trust” was a “one-time” distribution. (Attached as
Exhibit 12).

6 The balance was actually significantly higher at that time, as clarified in the inventory and account filed
in 2012 and 2013.Trust made additional distributions of approximately $16,500 in 2012 (attached as Exhibit 6),
and later paid $60,000 in 2015 in settlement of litigation with the Rose Loring Trust.

Clearly then, potential improper accounting issues, trustee’s or attorney fees or other
expenses, did not dwindle the trust balance below an amount that would allow for payment of
any requested amount, such as the $10,000 requested in 2010 or the $29,047.60 requested in
2012, which was later withdrawn. Rather, the concealment and over misrepresentation of
material financial information provided by Desmarais, was the reason that Dr. Price did not make
distributions to Howard. Desmarais’s repeated assertions that the Trustee was not permitted to
consider Howard’s resources are clearly false, and the Defendant-Trustee had a duty to ascertain
Howard’s finances prior to exercising his discretion and making distributions. Charles Loring’s
Will contains explicit non-discretionary prohibitions on non-supplemental distributions, based on
an evaluation of whether Howard could otherwise be eligible for private or public assistance
programs.

Even if these non-discretionary prohibitions on distributions did not impact Howard,
Charles Loring’s Will also vested “absolute discretion” in the Defendant-Trustee. In
Massachusetts, there are two types of discretionary trusts, the first being trusts that include
language that the trust is intended for the “comfort, maintenance and support” of the life
beneficiary. Holyoke Nat’l Bank v. Wilson, 350 Mass. 223, 229 (1965). “This language reveals
the unequivocal intention that [the life beneficiary’s] living expenses are to be borne exclusively
by the trust income and principal.” /d. The Charles Ray Loring trust was not this type of trust.

The second type of discretionary trust is one whose language indicates “a contrary
intention” — i.e., that the trust should not exclusively pay for the beneficiary’s living expenses.

Holyoke, 350 Mass. at 228. These types of trusts use qualifying language such as “[when] inwr

need” or “if necessary[.]” Jd. In addition to their duty to inquire as to the life beneficiary’s needs,
trustees of this second type of discretionary trust are required to ascertain whether the
beneficiary has other resources that might fund the beneficiary’s needs. Boston Safe Deposit &
Trust Co, v. Boynton, 15 Mass. App. Ct. 103, 105-108 (1983) (finding “that the trustee is
required, under the terms of the trust, to consider [the life beneficiary’s] other resources,
including the resources distributed to her children, in determining whether and to what extent she
is entitled to receive payments from the principal of the trust”); Gorman v. Stein, 1 Mass. App.
Ct. 244, 250-251 (1973) (affirming as proper trustee’s denial of beneficiary’s request for
additional funds because “[iJn deciding on the requests for additional payments, the trustees
could also take into account the plaintiff's financial condition”); Corkery v. Dorsey, 223 Mass.
97, 102-103 (1916) (finding that trustee abused discretion in distributing entire corpus to life
beneficiary because trustee did not determine that beneficiary was both “deserving” and “in need
of aid” as required by terms of trust); compare Harootian v. Douvadjion, 80 Mass. App. Ct. 565,
569 (2011) (“Without the requisite qualifying language in [the settlor’s] trust, [the life
beneficiary] was not required to use her own assets before invading the trust principal to pay for
her support”). That a trustee must determine the beneficiary’s needs and resources under this
second type of discretionary trust is a long-standing principal. See, e.g., Stevens v. Winship, 18
Mass. 318, 326, 327 (1823) (“It could not prove that the personal property and the income of the
real estate were insufficient for the comfortable support of the devisee, unless the amount of the
personal property and of debts due to the estate had been also shown. For aught we know, she
might have received payment of debts sufficient for her support.”). The trust here was this
second type of trust, which required Dr. Price to obtain Howard’s full financial information prior

to making any distributions.If the Plaintiff is not successful on his claims for breach of fiduciary duty and unjust
enrichment, and is thereby found not to be owed any money from the trust or estate, he would
lack standing to object to the accounting of those funds because whatever the outcome of that
challenge, it would have no effect on the Plaintiff as he would not be entitled to funds even if
improprieties were discovered in the accounting, If a party is not affected in any way by the
potential outcome of a claim, that party lacks standing to pursue the claim. Care & Prot. of
Sharlene, 445 Mass. 756, 771 (2006) (“The essence of standing, as it pertains to a private person,
is whether the person has alleged a personal stake in the outcome of a controversy”); Now v.
Exec. Office of HHS, 2013 Mass. App. Unpub. LEXIS 975, *4 (“Without a demonstrated interest
in the outcome of this litigation, the estate lacks standing to prosecute it”).

The reason the Plaintiff would not have an interest in the results of a challenge to the
accounting is that if there are indeed proven improprieties in the accounting, since both Howard
Loring and Rena Loring, the life beneficiaries of the trust, are deceased, any adjustment to the
accounting that might result in additional trust funds to distribute would be distributed to the
remainder beneficiaries of the trust, who are Barbara Burgess Maier, the Salvation Army, and
Dr. Price.’ Notably, if the Defendant’s management of trust resources was so outrageously
defective (Plaintiff uses the term “plundering”), Barbara Burgess Maier and the Salvation Anny
would be similarly outraged.

In fact, it is not even clear that the Plaintiff currently has standing to object to the

accounting, regardless of whether the Plaintiff is ultimately successful on the claims for breach

7 The Salvation Army assent to the accounting was filed in June 2013, and Barbara Burgess Maier has
assented (see attached Exhibit 19), and her written assent will be filed with the probate court imminently.
Although the Attorney General’s Office, which oversees charitable interests, has not indicated a position
as to the accounting, the fact that the Salvation Army has already assented appears to make it likely that
the Attorney General’s Office would not pursue any objections to the accounting.

8of fiduciary duty and unjust enrichment. Howard Loring, while alive, as a life beneficiary, would
have had standing regarding the accounting.

B. It Was Proper to Consolidate the Probate Matter and the Superior Court Matter
and Bifurcation is not Inconsistent with the Request to Consolidate

It was appropriate for Dr. Price’s prior counsel to request consolidation of the Probate
Court case and the Superior Court case, and it is not inconsistent for Dr. Price to request
bifurcation on the remaining claims of breach of fiduciary duty and unjust enrichment, to be tried
prior to trial on the accounting, because it would maximize judicial economy, particularly where
trial on the accounting could be potentially moot if Dr. Price successfully defends against the
first two claims, or the Court otherwise determines that the Plaintiff lacks standing altogether to
pursue an accounting claim.

At the time prior counsel requested consolidation, the Plaintiff had filed a complaint and
two petitions in the probate court, one petition for an accounting and the other for removal of
trustee. The probate court complaint was dated March 8, 2013. The Plaintiff had also filed a very
similar complaint in the Superior Court, which was dated March 29, 2013. The factual
allegations in both complaints are almost identical. The Probate Court Complaint contains four
counts: Count I, Petition to Compel Trust Distributions; Count I, Breach of Fiduciary Duty and
Loyalty; Count II, Declaratory Judgment; and, Count IV, Equitable Count of Money Had and
Received. The Superior Court Complaint contains five counts: Count I, Interference with an
Inheritance; Count II, Misrepresentation; Count III, Breach of Fiduciary Duty; Count IV,
Declaratory Judgment; and, Count V, Unjust Enrichment/Money Had and Received. However,
the Superior Court dismissed Counts J and II on Defendant’s Motion for Summary Judgment.

Given the overlap between the two complaints, specifically the central counts of breach

of fiduciary duty, declaratory judgment and unjust enrichment/money had and received, andgiven the nearly identical relief requested, it was proper to request that the cases be consolidated,
especially now that the two counts which were only in the Superior Court Complaint (fraud and
interference with inheritance) have now been dismissed. Moreover, both complaints request as
relief the removal of Dr. Price as trustee and an order that he be compelled to account. Because
the request for an accounting was already requested in both complaints, as were the claims for
fiduciary duty and unjust enrichment, the combination of those claims was not caused by the
request for consolidation. Consolidation merely merged the nearly identical claims in the Probate
Court action and in the Superior Court action together, so that the nearly identical claims could
be heard in one Court. Moreover, subsequent to the Complaints, Dr. Price filed his First and
Final Account on June 5, 2013.

The present request for bifurcation is therefore not inconsistent and is merely proposing a
logical order of trying the case that will save the time, expense, and judicial resources of
conducting a lengthy trial on a multi-year accounting if the Plaintiff cannot prove his other
claims first, or otherwise demonstrate standing. Moreover, any factual findings and rulings of
law made by the Court in a trial on the breach and unjust enrichment claims would be res
judicata on any subsequent trial on the accounting. With both matters being bench trials, there is
no danger of inconsistent factual findings.*

CONCLUSION

Because it will not affect the Plaintiff one way or another if there are or are not
accounting improprieties proven, the Plaintiff lacks standing to move forward on the claim for
accounting, regardless of whether the Plaintiff can prove its other claims. At best, the claim for

an accounting should be bifurcated and set aside until after the Plaintiff's claims for breach of

8 Although given due consideration by the Defendant, he is not requesting a jury trial on any of the
remaining issues, and it appears the Plaintiff has not requested a jury trial on any remaining issues either.

10fiduciary duty and unjust enrichment are tried, and, depending on the outcome of those claims
and a determination by the Court of whether the Plaintiff even has standing on the accounting
claim, that claim should either be tried separately or dismissed.

Wherefore, this Court should deny the Plaintiff's motion to try the equity complaints with
the probate accounting and grant this motion to bifurcate the two trials.

Respectfully submitted,
Dr. Stephen Price
By his attorneys,

Gon Lr Cond

es R. Knudsen BBO # 567358
es M. Moynihan BBO #673516
Knudsen, Burbridge & Manchur, PC
401 Edgewater Place, Suite 140
Wakefield, MA 01880
jtk@kbmlawfirm.com
jmm@kbmlawfirm.com
Tel: (781) 246-3030
Fax: (781) 246-3050

Dated: February 23, 2018

CERTIFICATE OF SERVICE

Thereby certify that I have served via first class mail the above document to the
following, on the 23th day of February, 2018:

Steven M. LaFortune, Sr., Esq.
LaFortune & LaFortune

12 Essex Street

Andover, MA 01810

fie Lo

iEXHIBIT 1O - O

ene g

sheet

TG ay

LAST WILL AND TESTAMENT
or

ene a

I, Chores Raymond Loriig, , a resident of and domiciled in the
Commonwealth, of Massachusetts; quake, publish -and- declare this to.be.my Sast Will and
Testament, revoldng al wills aid-cadictly at any time-heretofore made by fie, ° :

VIRST: I direct that the expenses of my last illness and funeral, the expenses of
tho administration of my estate, and all estate, inheritance and stmiler taxes payable with Tespect

to property included in my estate, whether or not Passing under this will, and any interest or
Penalties thereon, shall be Paid out of my Tesiduary estate, without apportionment and with no
right of reimbursement from any recipient of any such property.

SECOND: I authorize my Executor, in addition to any rights conferred by law
and in the sole discretion of my Executor, and without the consent of any court having
jurisdiction over my estate, ta disolaim or Tenounce, in wholé or in part or with respect to
Spesific amounts, parts, fractional shares or assets, any legacy, devise, or interest in or privilege
OF Power over any tnist or other disposition provided for my benefit under the will or other
instrument of any person ‘at any time within nine months after the date vf the transfer (whether
by reason of such person's death or otherwise) which creatéd an interest in me.

conservator, guardian, Conumhittee, execistor; ‘or administrator, delivered to my Executor and filed

Trustee hereinafter named, IN TRUST, ta hold the same in a separate trust, to manage, idvest

ead reinvest the sume, and to dispose of the net income therefrom and Plincipel thereof, as
follows: :

(a) The trust assets shall be held, IN TRUST, forthe beneSt of my percats, Rean
A. Loring and Howard C, Loring (hereinafter referred to ag the "beneficiarics"), The Trustee
shall hotd, manage, invest and reinvest the trust assets, shall collect the income therefiqm and,

LO BO

000003O

principal of this trust as the ‘Trustee shall deem advisable, in the absolute discretion of the
Trustee, subject to the limitatfous. set forth below, Any income not so Paid or applied shall be ac-
cumulated and added to the principal of this trust at least annualty. a

may be cligible and that, where Bppropriate and to the extent possible, the Trustee shall endeavor
to maximize the collection of such benefits or assistance for the ‘benefit of the beneficiaries.

No judgo or court shall have the Power to order the invasion of principal in
contravention of the provisions of paragraphs (b) and (¢) above.

eneficiaiies enjay the therapeutic benofits
of education, vocational training, hebbies, vacations, modes of transportation, equipment,
visitation with family and fiiends, and other needs and/or luxuries the beneficiaries may have to

ChE,
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Paragraphs of sis. Article, the Trotep spay use the principal. and income of this trust for these
types of purposes and such other Purposes, as the Trustee may deem appropriate,

The beneficiaries shall not have any right or power to assign, encuraber, direct, .
distribute or authorize distribution fram this truat. . \
There is no requirement of equality of distribution between the two beneficiaries,
: 1
Upon the death of both Beneficiaries, all remaining principal and income of this
trust shall be paid and distribated free of taxes to the following in the Forcentages indicated:

1; Stephen Price, MLD.
74 Chebacca Road
South Hamilton, MA 01982

000004EXHIBIT 2EXHIBIT

144

The Law Offices of Pall G. Kalmansson

Professional Corporation
Attorneys at Law
435 Main Street, Suite 2050, P.O, Box 7360
‘Fitchburg, Massachusetts 01420
70) 343-7772
FAX (978) 343-7495,
EMAILslalmanssanlaw@verlzan.nel

Pall G. Xnb i, Esa, Wendy ). Latino, Paralegal
ah: Ketenaszon, Fag Kathy fictansont Parsleest
Wendy ¥, Jefferson, Paralegal

December 13, 2011

Lacey, Brian
Walters & Lacey

7 Federal St
Danvers, Ma 01923

Re: Estate of Charles Raymond. ‘Loving
Dear Attorney Lacey

As you know, I represent Howard Loring, in the above estate.

‘pended to supplement and not
supplant any government benefits he toay be entitled to. 1 understand also that you will need
Specific information regarding Howard’s financial picture including assets and income.

Tam therefore enclosing copies of Howard Loring's income tax return for 2010 showing his

limited income and a copy of a recent bank statement showing that Howard has very little
remaining In ossets, ,

Tam also enclosing a copy of the October billing at James Menor, I would like to arrange for this

invoice to be paid on a monthly basis, Mr, Loring will also need assistance with his medications,
‘1 will forward additional information on this as I receive it.‘Thank you in advance for your assistance on this matter, Ifyou have any questions or wish to
speak to me, please do not hesitate to call.

Sincerely,

vite fog
Pall G. Kalmansson, Esq,
PGK yjl
c,
Cc: Howard LoringEXHIBIT 3WALTERSL = jfesesres shasmsr sam
CONTACT BRIAN LACEY:

TELEPI
ACEY LLP Tearax permit TELEPHONE: 617-939-3312

‘ COM EMAIL: BLACEYESt ILCOM
ATTORNEYS AT LAW NOAA ene!

Beian E, Lacey, Esq.
Meirwya I. Walters, Esq.

Angie E, Burgess
Paralegal

Tuly 12, 2009

Andrea Lehtonen, Esq.
35 Main Street, No. 2560
Fitchburg, MA 01420

Re: — Estate of Charles Raymond Loring

Dear Ms. Lehtonen:

This office represents Stephen Price, M.D., the executor of the above estate. I understand that
you represent Mr. Howard Loring, the deccased’s father. We did speak by phone recently regarding
the estate’s status and did exchange some correspondence late last year regarding the estate. The late
Mr. Loring’s will contained terms of trust that benefit Howard Loring for his lifetime. The trust though
restricts the terms for his benefit to “supplemental needs” purposes.

As I told you recently, Dr. Price is selling the estate’s realty this summer, has marshaled its
other assets and should be ready to fund the trust this autumn. Depending upon the completion of a
needed septic system, the closing might even happen prior to the end of this month. Also, we have a
draft Inventory, a copy of which I am attaching for your review. The only information missing pertains
to Mr. Loring’s intellectual property, the value of which currently is largely unascertainable. It is
being catalogued though at the present. We are negotiating a custody and loan agreement with Gordon
College’s Music Department pertaining to same.

Consistent with his duties as trustee, Dr. Price would like to make regular and appropriate
inquiry and investigation of Mr. Loring’s needs. Mr. Loring, however, has expressed unwillingness to
deal with him. As such, at any time that you may become aware of any of Mr. Loring’s needs that Dr.
Price can assist with the trust’s assets, then Dr. Price would welcome such information.

Please telephone or email with any questions or comments. We would be happy to provide you
with as copy of the will and trust if you should need it. .

Thank you.

Very truly yours,
WALTERSLACEY LLP

www, WaltersLacey.comEstate of Charles Raymond Loring III
2 SCHEDULE OF PERSONAL ESTATE IN DETAIL
Values as of date of death - September 6, 2008

Essex Probate Docket No.: ESO8P2645EA

Automoblies 1.2000 Chevolet Truck $ 2,000.00
Reg. No. 9074Kn
2. 1998 Buick Riviera $ 2,500.00
Reg. No. 5985XP

Recording/ Includes: recording studio, $ 4,742.63
Electronic computer keyboard,
Equipment and microphone
Printer $ 70.00
Household $ 6,765.00
Furniture
Carpets 2 carpets $ 1,000.00
Antiques 1, China Plates $ 157.50
2. Grandfather Clock and
Small Table $ 1,500.00
3. China Pictures $ 3,000.00
4, Antique Books $ 560.00
5. Silver Items $ 15,000.00
Miscellaneous —_1. Guitar $ 125.00
2. Settee $ 100.00
3. Nikon Camera $ 320.00
4, Movie Camera $ 500.00
5. Digital Still Camera $ 100.00
6. Radio $ 100.00
7. Generator $ 300.00
8. Snowblower $ 200.00
9. Video Screen $ 130.00
Bank of America 1. CD - 9958 $ 146,681.76
2. Checking Acct $ 181,575.00
TD Bank North 3. Checking Acct $ 6,000.00
Tricontinental 4. Stock $ 700.35
Fidelity 5. Acct. #172-017728 $ 85,236.27
Fidelity 6. Acct, #x36-625388 $ 32,779.30
American Century 7. Investment Fund $ 11,472.87

ING 8. Investment Fund $2,223.771 Estate of Charles Raymond Loring III
SCHEDULE OF REAL ESTATE IN DETAIL
Values as of date of death - September 6, 2008

Single Family Home located at

Georgetown, Massachusetts, as described in a deed
tecorded with Essex Registry of Deeds,

Book Page

Fair Market Value as of September 6, 2008. $195,000.00EXHIBIT 4EAHIBIT

The Law Offices of Pall G. Kalmansson

Professional Corporation
Attorneys ot Law
435 Maln Street, Suite 2050, P.O. Sox 7360
Fitchburg, Massachuselts 01420
(970) 443-7272
: FAX (970) 243.7495
EMAlLkalmantsaninw@verlzannet

Poll G. Kalmansson, Esq. Wendy }, Latino, Paralegal
on Eos teyhatnear rategal
Wendy ¥.Sefferson, Paralegal

August 2, 2010
File no. /
Meirwyn Walters
‘Walters & Lacey, LLP
Suite 26, Chestnut Green
Seven Federal Street
Danvers, MA 01923

Re: Loring, Charles Raymond est of
Dear Attorney Walters,

Thank you for your letter of May 18, 2010, L understand that you will forward the :
Inventory and Accounting as soon as itis prepared.

Howard Loting is currently residing at the James Manor Rest Home, in Fitchburg,
Massachusetis. He is concemed that Le has insufficient funds to pay for his expenses
there, Mc. Loring requests that the sum of $10,000 be distributed to him from the trust to
meet these expenses, Please advise as to when this can be completed.

Mr. Loring and I have reviewed his eligibility for governmental benefits and have

deteomined that he is not receiving any such benefits. Thus the receipt of funds ftom the
trust will not negatively affect him.

If you bave any questions please do nat hesitate to call. Thank you.

Yours very truly,

age —

Pall G. Kalmansson, Esq.
PGK/wjl
Ce: Howard LoringEXHIBIT 5_Peta seit

= Portfolio Progress

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‘Mew current aocount ‘information online with My Financial

5] ae aanmiynattnats toa

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Portfolio Value on September 30,2040 $42,941.04

a nn Or a Nagtigbe Gow att

M50,

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wees otal Ponto Value
eee i Ending Portion Value.

~ BR hed inane
Total Assets
“Total Lables

“eggganssa 100 MBgULAD 100 HUQHLOL 100

“Total Portola Value”
2008: Momingstar, Ine. Al Righis Reserved,

- Last Pétiod “This Period

$83,985.59 100% $45,901.12 1008 $42,941.04 100%
$n - $000 $000
 $89,20559 | gasgo.d2 $42,884.04 -EXHIBIT 6The Rose Loring Trust under will was executed by Rose Loring for the benefit of her brother Edward, Edward’s
wife Madeleine, Constance Loring [niece of the donor] and Howard Loring [nephew of the donor]. Upon the
death of the last survivor of said class, the Trust will terminate and distribute per stirpes to the then living issue of ~
the Donor’s late brother Charles R. Loring. The issue of Charles R. Loing consisted of the aforementioned
Constance Loring Murray and Howard Loring. Constance passed away on October 11, 2001 and was survived by
two daughters: Eileén Murray and Charlotte Chapin. Howard Loring passed away on September 29, 2012 and
was predeceased by his only child, Ray Loring. The Bank was appointed Co-Trustee under the agreement and
has served in that capacity for the duration of the Trust. This Trust terminated upon Howard Loring’s death in
2012 and should have distributed to Charlotte Chapin and Eileen Murray. However, given the circumstances,
only the shares from which Charlotte and Eileen were entitled to receive income were distributed to them. The
remaining share‘has been retained in trust until Mr. Desmarais’s complaint is adjudicated.

The dispositive provisions of this trust required that net income be paid to Howard Loring, Eileen Murray and
‘Charlotte Chapin. Further, the document provided that the trustees may pay to or for the benefit of any
beneficiary such part or parts or the whole of the principal from which such beneficiary is entitled to reccive the
income as the trustees in their discretion shall deem for the best interest of such beneficiary. It goes on to require
that any payments made from principal shall reduce Proportionately subsequent payments of income and final
payments of principal to such beneficiary or beneficiary’s issue. With that in mind, Howard’s interest after the
last distribution made for his benefit was 40.8987%. Charlotte and Eileen each held 29.5507% interests.

Donald Desmarais was appointed as Howard Loring’s POA in November of 2002. Howard also resided at James
Manor Rest Home which is owned and operated by Mr. Desmarais. In 2010 and 2011, Mr. Desmarais mailed
discretionary principal requests directly to US Trust. Both requests were reviewed and subsequently approved.
In 2012, Mr. Desmarais mailed two requests for Howard through an attorney, Steven LaFortune. Again, the
requests were reviewed and approved; however, the fees charged by Mr. Desmarais were not approved as an
attorney was not required to make the requests on behalf. ‘of Howard, In Mr. Desmarais’s complaint he alleges

- that US Trust unreasonably refused to make distributions for some of his expenses; however, the following
distributions were made from the principal portfolio to Howard or for his benefit:

$40,000 8/2/10, 8/15/10, 09/15/10, LO/15/10 & 11/15/10 [5 pmts of $8,000; request submitted by D.
Desmarais to for medical and living expenses]

$10,000 8/10/20) | [request submitted by D, Desmarais for medical and living expenses]

$29,047.60 7/25/2012 [request filed by Steven Lafortune: Rest home, Meds, Pre-paid Burial]

$2,500 9/17/2012 [Bed hold at James Manor during HL’s stay at skilled nursing facility]

$12,714.46 10/24/2012 [Kindred Nursing — skilled nursing facility]

$126.41 10/24/2012 [UMASS Memorial Med Group]

SL1S6 12/12/2012 [Health Alliance Hospital]

[ S95 star

A total of $95,544.47 was distributed to Howard in addition to the income he was entitled to receive. All
expenses relating to Howard’s medical expenses, skilled nursing care, rest home lodging and pre-paid burial
expenses were paid for by the Trust. Mr. Desmarais further alleges in his complaint that there are outstanding
expenses incurred by Howard during his lifetime; however, the only outstanding expenses that have been
submitted to the Bank for approval are the attorney expenses which, as explained previously, were reviewed and
not approved in the Bank’s discretion as trustee. Keep in mind that the value of this trust remained steadily
somewhere between $325,000 and $375,000 during the time period in which Howard made requests. Considering
the amounts involved and the value of the Trust, the Bank exercised the utmost care and fulfilled its fiduciary
duty to both current and future interests in evaluating these requests.

It should be noted that at the death of Howard, after paying all of his outstanding medical and living expenses, the
shares of Eileen Murray and Charlotte Chapin were terminated and distributed to them outright and free of trust
per an approved ODAM. ‘The remaining trust assets represent the share fram which Howard was entitled to

_ receive income at his death.

Trustee's Doc # 01707Barrett, Frances
— —

_ _ —
From: TrustWeb@BankofAmerica.com

Sent: Wednesday, June 16, 2010 3:20 PM

To: Barrett, Frances

Subject: Online Discretionary Request

Importance: High

A pending discretionary request has been approved [APPROVED-E] for account 80-02-200-5864592 LORING
ROSE TR U/W

Requested Amount : 40000.00
Approved Amount : 40000.00
Customers : HOWARD C LORING

The date of transaction 6/16/2010 2:19:43 PM

Sent automatically by TrustWeb, please do not respond.

Trustee's Doc # 00064EXHIBIT 7Fane 5 INDIA STREBT, SUITE WO
We WatrersLacey LLP Oreancans  “Umapen ae
ATTORNEYS AT LAW Daervonn: 978-777-455 Conracr Buan Lacan:

TELEFAR: § JIB-777-9467 ‘Turron: 617-939-3512
EMMI: N@\wamaw.con,  Extalt: Waceyesa@aoLcon

Dean E, Lacey, Eaq.
Metrwyn 1, Walters, eq.

Emily G. Peteon
Parategul

September 1, 2010

Pall G, Kalmausson, Esq.
435, Main Street

P.O. Box 7360
Fitehourg, MA 01420

Re; Estate of Charles Raymond Loring

Dear Mr. Kntmannsson:

“This office represents Stephen Price, M.D., the executor of the above estate and the trustee under
the last Will's testamentary trust, ‘You recently requested in ‘\writing on-ydur’élient’s behalf'a distribution
bf $20,000 in'cashy; cars Ne a tte ee

The late Mr. Loring's Will contaiiied terms of trast that beiiefit bis father ducing his lifetime but
specifically for “supplemental needs” Purposes only. The trust's Article Third, paragraph b, states that
“It is the intent of the Testator to create a supplemental needs trust. The Testetor intends that the trast
assets be used to supplement, nat supplant, impair or diminish, any benefits or assistance of any Federal,
State, county, city or other governmental entity for which the bentficiaries may otherwise be el igible
--.", Further, Article Fourth, subsection c, state that “None of the income or principal of this Trust shall
be applied in such manner as to supplant, impair or diminish benefits or assistance of any Federal state,

county, city or other governmental entity for which the beneficiaries may otherwise be eligible or which
the beneficiaries may be receiving.”

The trust, in fact, illustrates Specifically the types of expenditures for his father's benefit that the
late Mr. Loring intended, Article Fourth, subscation (c) also states, in part, that “It is the desire of the
Testator that the beneficiaries enjoy the therapeutic benefits of education, vocational training, hobbies,
vacations, modes of transportation, equipment, visitation with family and fiends, and other needs and/or
luxuties the beneficiaries may have to enjoy life to the fullest.”

Hence, the trust’s terms do not permit Dr. Price to distribute cash as you have been requosted.
Consistent with the trust’s terms as cited above though, Dr. Price will be happy to assess and satisfy any
specific items or needs that your client may have. In order to ascertain that any particular distribution
complies with the trust, however, we would need to have'a full picture of Mr. Loring’s finaiicial status

including oll assets; means of iicome'ete. And we'would need to confirm that-making, the- distribution,

ww. WaltersLacey.com

EXHIBITSoptersber 1, 2010

T Page 2 of 2

would not affect ativersely Mr. Loring’s eligibility for governmental assistance or benefits, whether or
not he currently receives them. Finally, we would need to know what the monies are being utilized for.
Based on the trust language, we do not anticipate that the Trustee would simply distribute a large
amount of money. Distributions will need to be made toward various eligible expenses,

Very truly yours,

WALTERSLACEY LLP

Brian E. Lacey

Coz. Stephen Price, VLD.

° woww.WaltersLacey.comEXHIBIT 8The Law Offices of Pail G. Kalmansson
Professional Corporation
Attorneys at Law
445 Main Street, Suite 2050, P.O, Box 7360
Fitchburg, Massachusetts 01420
343-7772

EXHIBIT

(976)
FAX (970) 343-7495
EMAlLkalmanssonlaw@verizan.act

Pall G. Kalmansson, Esq. Wondy J, Lntino, Parategsl
Kathy Melanson, Parategat
Wendy V. Jefferson, Paralegal
September 27, 2010
File no. /

Brian E, Lacey

Walters & Lacey, LLP
Suite 26, Chestnut Green
Seven Federal Street
Danvers, MA 01923

Re: Loring, Charles Raymond est of
Dear Attomey Lacey,

Treesived your letter of September 1, 2010, Tunderstand you will need additional
information prior to making a distribution to Mr. Loring.

information on a daily basis from Mr, Demaris and
assistance you can give us would be appreciated,

PaliG, Kalmansson, Esq.
PGKAwj}
Cot Howard LoringEXHIBIT 9i

1 .
i : wee 2
I : Contract Information
: Anrulterts HOWARD COLE LOMING

, SLES" $8218.88 | Daye dgcourt Cpenge 00/25/03...

. vet mere chew ape} Depth Banelit a pqhy eletans omy

| é. Annual Effective Inlerest Rate

I -

i

1 Exo itinbta

i Total Change M1 Volve

: Curent Value. ss.

i "Changs f Sumendared

: vf Vitos tf Sutrenderod . => $4748.74

‘ + Surenctor Charge, $280.49

1 928,34

Account Activity Detall

oy/aq/a0%2 pata suman
‘Sunendor Chorge

+ RVG Ufa Feed

Tex ihhelding *

« Amolint ay» Gor Uatts

Tt Value

i
Pe theaEXHIBIT 10Account Name
LORING ROSE TR UAW

Account Number
80-02-200-5864592

8/10/2011

Market Value as of August 1, 2011 $375,599.00
Income Interest as of 8/10/11 - Pre Distribution Percentage of MV
Howard Loring §0.0000% $ 187,799.50
Charlotte Chapin 25.0000% $ 93,899.75
Eileen Murray 25.0000% $ 93,899.75
$375,599.00
Howard's Distribution 8/10/14 $10,000.00
Howard's New Share (50% FMV Less Disbursements) $177,799.50
Income Interest as of 8/10/11 - Post Distribution
Howard Loring 48.6324% $177,799.50
- Charlotte Chapin 25.6838% $93,899.75
_ Eileen Murray 25.6838% $93,899.75
100.0000% $365,599.00
Account Number Account Name 7125/2012
80-02-200-6864592  LORING ROSE TR UAV
Market Value as of July 25, 2012 $339,784.64
Income Interest as of 7/25/12 - Pre Distribution Percentage of MV
Howard Loring 48.6324% $ 165,245.43
Charlotte Chapin 25.6838% $ 87,269.61
Eileen Murray 25.6838% § 87,269.61
: $ 339,784.64
- Howard's Distribution 10/24/12 $29,047.60
Howard's New Share (48.6324% FMV Less Disbursements) $136,197.83
Income Interest as of 10/24/12 - Post Distribution
Howard Loring 43.8306% $136,197.83
Charlotte Chapin - 28.0847% $87,269.61
Eileen Murray 28.0847% $87,269.61
100.0000% $310,737.04
Account Number Account Name 9/17/2012
80-02-200-5864592 LORING ROSE TR U/W :
Market Value as of September 17, 2012 $347,317.26
Income Interest as of 9/17/12 - Pre Distribution Percentage of MV
Howard Loring 43.8306% $ 152,231.24
Charlotte Chapin 28.0847% $ 97,543.01
Eileen Murray 28.0847% $ 97,543.01
$ 347,317.26

Trustee’s Doc # 00576EXHIBIT 11i

7 EXHIBIT
Isl
Wr WALTERSLACEY LLLP sonesscuesmurcnom a5tnomSmser Suresoe

Seven Papuan Steere’ Bosron, MA 02510
ATTORNEYS AT LAW Danvers, MA 01923 Contact Baan Lacty:
‘TRCPHONT: 978-777-4455 “VALRPHONE: 617-939-3312
‘Viussviax: 978-777-9467 “FRLYRAX: 617-523-7379

EMAIAM@WALTLAW.COM — Batali: TILACEYESQ@A0}..cont
Briua E. Lacey, Esq.

‘Meinwyn I. Walteru, Baq.

‘Thomas P. Hardison, Ea.
Of Counsel

Emily G, Peterson
Pasubegeal

Januaty 19, 2012

BY FIRST CLASS MAIL
AND BY EMAIL

Pall G. Kalmansson, Esq.
435 Main Street

P.O. Box 7360
Fitchburg, MA 01420

Re: — Extate of Charles Raymond Loring

Dear Mr. Kahnansson:

As you know, this firm tepresents Steplien Price as he is tritstee under the testamentary trust of
Charles Raymond Loring II dated November “13; 2001, We spoke recently by-phone tegarding ‘your.
December letter inquiting about'use of trust fimds for Mr. Howard Loring’s long term care residency
expenses,

I xeviewéd the matter with the trustee, I attach for your reference a copy of the will with
testamentary trust executed by Ray Loring and approved-by the Essex Probate Court. Please note that
Axticle Third govems the trust’s terms for distributions to or on behalf of Howard Loring as follows:

“(@) - The testator intends that the trust assets be used’to supplement, not supplent,

inipair or diminish, any benefits or assiStance of any Federal, staic, city, county or other

governmental entity for which the beneficiaries may otherwise be eligible or which the

beneficiaries may be receiving. Consistent with that intent, itis the desire of the-Testator

that, before expending any amounts from the net income and/or principal of this trust, the

‘Trustee shall consider the availability of all benefits of assistance governmental or private

assistance programs for which the beneficiaries may be eligible ...

“(c) None of the income or principal of this trust shall be applied in such manner as to

supplant, impair or diminish benefits or assistance'of ‘any Federal, state, county, city or

‘other governinental entity for which beneficiaries may othérwise be eligible or which the

beneficiaries may be Teceiving, The Trustee shall not make distribution to or for the

benefit of the beneficiaries if such distribution would reduce or eliminate any
governmental entitlement or payment, which the beneficiaries would otherwise receive.”

DANVERS ¢ BOSTON 9 NoaweLL
wow. Walters Lacey.comJnavary 19, 2012

Pape 2 of 2

Mr. Loring also illustrated in the trust instrument the types of matters for which the trustes could
expend funds for his father such as, amongst other matters:

“The therapeutic benefits of education, vocational training, hobbies, vacations, modes of
‘Tansportation, equipment, visitation with family end friends, ond other needs and/or
luxuries the beneficiaries may have to enjoy life to the fullest.”

The trust’s terms themselves prohibit any payments for purposes that otherwise would be funded
or aided by governmental assistance programs such as long-term care payments through MassEealth,
Dr. Price would be happy to review how he can provide funds for Mr. Loring’s benefit consistent with

the trust’s instructions such as by means of the types of payments illustrated above. The ‘Trust funds,
however, may not be disbursed in the manner and for the purposes which your letter seeks.

T know that Dr. Price has both visited Mr, Loring and written to him but has never received any
teply from him as to how he can help him, In fact, Mr. Loring directly disavowed to Dr, Price in person
any wish to receive such benefits from the trust. He stated that bis financial needs were completely

satisfied. Dr. Price certainly wishes to aid him though consistent with the direction allowed him in the
trust.

One issue that you may want to pursue on behalf of your client stems from information Dr. Price
received from Ray Loring before he died. Mr. Loring said that his father had invested a substantial
amount of money, northward of half a million dollars with Mr. Desmarais and the John Manor Rest
Home in return for their expressed commitment that he would remain a resident of the Home for his
lifetime. By your letter, it would appear that they are teaching that contractual agreement,

As well, it would appear appropriate for Mr. Loring to apply for all available federat and state
assistance including Medicaid, Your letter does not indicate whether he has done 50,

I nate that the letter you sent did not have topies of the referenced income tax return, James

Manor bill or bank statement. Although they are of somewhat limited televance, kindly provide those to
this office at your convenience.

Very tmily yours,

rom ©.

Brian E. Lacey, Esq.

Cc: Meirwyn I, Walters, Esq,
Stephen Price, MD.

Enclosures

wwyw.WaltersLacey.comEXHIBIT 12i
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Banllx

America’s Most Convenient Bank®
STATEMENT OF ACCOUNT

043588 06CD1301 4 100000

HOWARD € LORING OR Page: Lof3
DONALD DESMARAIS POA Statement, Period: Aug 18 2011-Sep 17 201)
PO BOX 2185 Cust Ref it: 8241305867-630-T-HHE

FITCHBURG MA 01420 Primary Account #: 824-1305867

Rose TRusr

TD Convenience Checking OnE TiMe

HOWARD G LORING OR Account 4 824-1305867
DONALD DESMARAISPOA Dist.
ACCOUNT SUMM