California Legal Implications: Flexibility in Modifying Your Trust
A recent California appellate court decision highlights a critical aspect of estate planning: how strict the rules are for changing a Revocable Living Trust. The case, *Haggerty v. Thornton*, clarifies that unless a trust document explicitly states that a specific method of amendment is the *only* way to make changes, the settlor (the person who created the trust) may use standard statutory methods to update their estate plan. (the person who created the trust) may use standard statutory methods to update their estate plan.
In this case, reviewed in the opinion Haggerty v. Thornton, the court upheld a handwritten, non-notarized amendment despite the original trust language mentioning an “acknowledged instrument.” The court found that because the trust did not expressly prohibit other methods, the statutory method of signing and delivering a written modification to the trustee was sufficient. For California families, this underscores the importance of understanding California Probate Code rules regarding how to properly amend estate documents to ensure your final wishes are honored. rules regarding how to properly amend estate documents to ensure your final wishes are honored.
Understanding Statutory vs. Trust-Specific Methods
Under California law, specifically Probate Code Section 15401, a trust can generally be revoked or modified by a writing (other than a will) signed by the settlor and delivered to the trustee during the settlor’s lifetime. This provides a “default” method for individuals to change their minds about their beneficiaries or trustees. during the settlor’s lifetime. This provides a “default” method for individuals to change their minds about their beneficiaries or trustees.
However, a trust document can specify its own procedure for modification. A common point of litigation arises when the trust lists a specific method (e.g., “by a notarized letter”) but does not explicitly state that this method is exclusive.
The “Exclusive Method” Distinction
The key takeaway for trust administration is the distinction between a suggested method and an exclusive method.
– Non-Exclusive: If the trust says, “The Settlor may amend this trust by a notarized writing,” but does not use words like “only,” “exclusively,” or “must,” the courts often view this as one option. The settlor can likely still use the standard statutory method (a simple signed writing delivered to the trustee).
– Exclusive: To force strict compliance, the trust must explicitly state that the method described is the *exclusive* method of amendment.: To force strict compliance, the trust must explicitly state that the method described is the *exclusive* method of amendment.
Why Clarity in Drafting Matters
For many clients, flexibility is desired. You may want the ability to make quick changes to your beneficiary designations without needing a notary immediately present. However, in other cases, families may prefer strict formalities to prevent fraud or undue influence, particularly as the settlor ages., particularly as the settlor ages.
If you wish to ensure that your trust can *only* be changed through formal legal steps (like notarization), your estate planning attorney must draft the trust language to explicitly exclude all other statutory methods of amendment. Without that specific language, a court may accept less formal documents, such as the handwritten note in the *Haggerty* case, as valid amendments. must draft the trust language to explicitly exclude all other statutory methods of amendment. Without that specific language, a court may accept less formal documents, such as the handwritten note in the *Haggerty* case, as valid amendments.
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Legal Disclaimer
This article is for informational purposes only. Consult with a qualified California estate planning attorney for advice specific to your situation.