In a recent article by Burns & Levinson LLP, they caution trust and estate managers about the potential legal concerns when incorporating tainted real estate assets into an estate or trust. The article suggests that pooling potentially toxic properties with other assets might result in considerable legal risk.
They assert that the title of any contaminated property, once vested in a trust or estate, makes the estate or trust itself the “owner” within the stipulations of the Massachusetts Oil and Hazardous Material Release Prevention and Response Act, MGL c. 21E, Section 2. Unless key exemptions apply, under Section 5 (a) (1) of the same legislation, this could lead to sizable liability issues that could impact all the assets under the estate or trust.
Estate and trust managers are therefore advised to segregate possibly polluted real estate from other assets to circumvent potential legal ramifications. If a contaminated site is part of an estate or trust and title has vested, the estate or trust could bear substantial risk and liability under state and potentially even federal law.
This piece of advice is particularly significant for legal professionals working in corporate law firms and global corporations with significant real estate assets. It highlights the importance of detailed risk assessment and astute decision-making when handling contaminated properties within an estate or trust.
In conclusion, integrating any potentially contaminated site with other assets in an estate or trust not only risks environmental complications but could also impact other assets severely. To prevent legal liability issues, it is crucial to effectively asses the risks and manage contaminated sites separately.