In Warne v. Warne, Case No. 20100125 (UT S.Ct., Mar. 6, 2012), the Utah Supreme Court held that, under Utah Code §75-7-605, a trust amendment need not precisely comply with the method of amendment prescribed in the trust instrument. The amendment need only substantially comply. Alternatively, if the method prescribed is not made exclusive, the trust may be amended by any method that manifests the settlor’s intent by clear and convincing evidence. The Court reiterated its holding from five months earlier in Patterson v. Patterson, 266 P.3d 828 (Utah 2011), that Utah Code §75-7-605 statutorily overrules Banks v. Means, 52 P.3d 1190 (Utah 2002).
In Warne, the decedent had executed his revocable trust in 1991. The trust contained the following language: “The interests of the beneficiaries are presently vested interests subject to divestment which shall continue until this Trust is revoked or terminated other than by death.” In 2003, the decedent executed a Partial Revocation and Amendment, which purported to remove one of his sons as a beneficiary.
Unlike Patterson, the amendment in Warne was executed before §75-7-605 became effective. The Court ruled that §75-7-605 applies retroactively.
The Court also held that the after-acquired property clause in the decedent’s revocable trust was sufficient to pull all of the decedent’s personal property that was acquired after the execution of the trust into the trust so that all of the decedent’s personal property was subject to disposition under the terms of the revocable trust and none of such property was subject to the decedent’s will.
For a detailed discussion of Banks v. Means and other cases addressing similar “divestment” language in Utah revocable trusts, including Hoggan v. Hoggan, 169 P.3d 750 (Utah 2007), see Section 4.2 of The Utah Law of Trusts & Estates, an online legal reference treatise available at The Utah Trust & Estate Educational Resource Center.
For a discussion of the Patterson case, see the related post on this blog site.
Rust Tippett is the author of this blog post.
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This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, P.C. The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.