Tuesday, June 3, 2014
In 2001, Section 602(c) of the Uniform Trust Code (UTC) was amended by deleting the word, “executing,” “to avoid an implication that the trust is revoked immediately upon execution of the will or codicil and not at the testator’s death.”
Recently, a trust revocation case that further muddied the waters. New Mexico enacted the modified version of UTC Section 602(c), and the trust at issue provided that the settlor may revoke the trust “by a duly executed instrument to that effect, signed by the [settlor] and delivered to the Trustee.” The court held the revocation-by-will was effective, despite the express language of the trust, which the court determined to be non-exclusive.
Notwithstanding the uncertainty embedded into Section 602(c), Section 602(g) provides, “A trustee who does not know that a trust has been revoked or amended is not liable to the settlor or settlor’s successors in interest for distributions made and other actions taken on the assumption that the trust has not been amended or revoked.”
See Charles Rounds, The Confusion Being Engendered By the Uniform Trust Code’s Default Trust-Revocation Methodologies, JD Supra Business Advisor, June 2, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.