Sunday, August 9, 2020
En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation
Creators of trusts usually put a lot of time and effort into planning how their property should pass in the event of their death. Trustors or their lawyers typically use protective safeguards to shield themselves from their now indecision and undue influence should they become vulnerable.
The California Legislature has codified its own "default" method of revocation, which allows "a trust to be revoked by a writing signed by the trustor and delivered to the trustee during the trustor’s lifetime."
In Cundall v. Mitchell-Clyde (2020), the Second District Court of Appeals held that "for a trust’s revocation procedure to be the exclusive revocation method, it must expressly specify that it is the only such method."
John and Robert were neighbors in West Hollywood and met in 2007 and became friends. In February 2009, "John retained Frances -an attorney and fellow neighbor- to prepare a trust, naming himself as trustee, and Robert as the sole beneficiary and successor trustee." The trust contained a revocation procedure which allowed it to be revoked by delivering a written revocation to John and Robert. However, both John and Frances would then need to sign the document.
John had a "falling out" with Robert, so he created a new trust in May 2009, which named his friends Vanessa and Ronald as beneficiaries. John also retained a new estate planning attorney, Paul, to prepare his trust. John executed the new trust including the revocation. The trust was not properly revoked under the trust's revocation procedure because Frances never signed the revocation.
Robert, Vanessa, and Ronald filed dueling petitions concerning the validity of the February trust and May trust. The Los Angeles Superior Court found that the February trust did not provide an exclusive means of revocation and that John's revocation was proper.
The Court of Appeal affirmed the trial court's decision. The court reasoned that the theoretical distinction between a “method” and “authority” was mere semantics, section 15401(a)(2) addresses the authority to revoke a trust anyway, and that its terms plainly provided that the default revocation method could be used unless the trust provided an “exclusive method of revocation.”
See Christopher Miles Kolkey, En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation, Trust on Trial, July 29, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.