Language giving the beneficiaries present interests does not invalidate trust amendment

A mother created a revocable trust which is to terminate on her death and be distributed equally among her three children.  The trust stated that the interest of the beneficiaries “is a present interest” which continues until the trust is revoked or terminated other than by the settlor’s death.  Similar language has been held to require that changing the beneficiary’s interest requires revocation of the entire trust.  Shortly before her death, the mother amended the trust to change one son’s interest to forgiveness of any debt owed to her at the time of her death. 

The court first disapproved a prior case holding that a trust is invalid unless the beneficiary’s interest vests during the settlor’s lifetime and disavowed the use of the term “vested subject to divestment” to refer to a beneficiary’s interest in a revocable trust.  The court adopted the view of Restatement (Third) of Trusts § 25 that a trust may exist where the beneficiaries’ interests are contingent on surviving the settlor or other events.  The court then held that the amendment was valid because it only amended and did not divest the son’s interest.  Hoggan v. Hoggan, 169 P.3d 750 (Utah 2007).