How Not to Amend your Revocable Trust

A California state court recently held, in Pena v. Dey, that interlineations made by a grantor to the text of his trust agreement were not sufficient to amend the terms of the trust. The grantor, James Robert Anderson, sent the marked-up copy to his estate planning attorney, with a post-it note instructing the attorney to prepare a written amendment. The trust agreement itself provided that any amendment must be made by way of a written instrument, signed by the grantor and delivered to the trustee.  Unfortunately, Anderson subsequently passed away before the amendment was finalized, and his successor trustee petitioned the court for instructions regarding the validity of Anderson’s “amendments.” In its written decision, the court stated: “While the law considers the interlineations a separate written instrument, and while there can be no doubt Anderson delivered them to himself as trustee, he did not sign them.” The amendments were, therefore, not effective.

Pursuant to Wis. Stat. § 701.0602(3), if a trust agreement does not set forth a specific method for amending the terms of the trust, the grantor may amend the trust agreement by means of:

1.    A subsequent will or codicil which expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust; or

2.   Any other method manifesting clear and convincing evidence of the grantor’s intent.

While this statute may sometimes permit a grantor to amend his or trust agreement by simply penciling in the desired changes, most trust agreements will provide for a specific method of amendment. If the grantor does not comply with the proscribed method, his or her attempted amendment will most likely be ineffective. In other words, it’s always better to be safe than sorry.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

Posted in Estate Planning.