A recent appellate case serves as a valuable lesson for both estate planners and beneficiaries about adhering to formal procedures when making changes to a trust. The court found that the mere exchange of emails was insufficient to execute this important task.
Timothy J. Trotter, as the successor trustee of the Trotter Family Revocable Trust, sought guidance from probate court on whether certain emails from his mother, Mary Trotter, constituted a valid amendment to the Trust’s beneficiaries. Mary had expressed via email and a questionnaire her intent to exclude Wendy Trotter Van Dyck, her stepdaughter, from the trust. However, the California Court of Appeal found these writings insufficient to amend the Trust, leading to the affirmation of the original beneficiaries, including Van Dyck (Trotter v. Van Dyck, No. 081916, Calif. 4th App. Dist. Div. 1).
Key Takeaways for Estate Planners
- Formal Signature Requirements: The court emphasized that Mary’s emails and the questionnaire were not properly “signed” as required by the Trust. The Uniform Electronic Transactions Act (UETA) does not apply to trust amendments, which must be executed with a formal signature.
- Clear Intent to Amend: The court concluded that Mary’s writings did not clearly express an intent to amend the Trust by the writings themselves. Estate planners must ensure that any amendments are explicitly stated and formally documented.
- Unilateral Acts and UETA: The court determined that a trust amendment is a unilateral act and does not constitute a “transaction” under the UETA, which requires interaction between two or more persons. This distinction is crucial for understanding the limitations of electronic communications in estate planning.
- Original Beneficiaries: The court ordered that the Trust be distributed to its original beneficiaries, highlighting the importance of adhering to the original trust document unless a valid amendment is made.
- Affirmation of Proper Procedures: The appellate court affirmed the probate court’s order, reinforcing the necessity of following proper procedures for trust amendments.
If the trust doesn’t say that you get it, you probably aren’t getting it.
Practical Implications
This case illustrates a common scenario in estate planning: a beneficiary claims that a parent intended to change the terms of a trust based on informal communications. As estate planners, it is essential to remind clients that discussions or email communications do not change the terms of a trust. It is fairly common to hear a beneficiary say, “yeah, but dad said I was supposed to get XY&Z.” If the trust doesn’t say that you get it, you probably aren’t getting it.
Ensuring Proper Amendments
To avoid disputes and ensure that a trust reflects the true intentions of the trustor, estate planners must:
- Adhere to Formalities: Ensure that any amendments to a trust are made in writing, signed, and delivered according to the trust’s provisions.
- Document Intent Clearly: Make sure that the trustor’s intent is clearly expressed in the amendment itself, leaving no room for ambiguity.
- Educate Clients: Inform clients about the importance of formal amendments and the limitations of informal communications in changing trust terms.
Conclusion
By ensuring that trust amendments are properly executed and clearly documented, estate planners can help prevent disputes and ensure that a trustor’s true intentions are honored. These lessons are especially relevant when families are blended or when there is discord among siblings.
About the Author
Carl L. Jones is a senior litigation attorney in the San Diego office of The Estate Lawyers. His practice focuses on contested trust, estate, and probate litigation matters, representing beneficiaries, trustees, administrators, executors, heirs, creditors, and conservators/guardians. With a decade of experience in trusts and estates, Carl works closely with clients to efficiently obtain advantageous outcomes with empathy while helping to protect the intentions of the decedent.