Last week we wrote about the late Anne Heche‘s emailed “will” that might be judged valid under California law. Our own article reminded us of a similar, but different, story we recently read about a less-famous electronic estate plan. The key difference: it involved an attempt at a trust amendment by email, rather than an emailed will. It also involved a different state’s laws.
The Omega Trust
The first interesting thing about Mark Frank Douglas’s revocable living trust is its name: The Omega Trust. It gives us a chance to reiterate that there is no magic (and no particular requirement) about the name of a trust. You can use an inside joke (your cat’s name, or your favorite aunt’s first name). Or try a high-concept approach: maybe combine elements of wealth and creativity to name your trust the Jackson Gatsby Trust. Or repurpose a business name generator to come up with the perfect trust name. Of course you can use your first and last name, like most other people do. It’s up to you.
Mr. Douglas signed the Omega Trust in 2005. He amended it (twice) in 2015 by conventional methods. Then, in 2016, Mr. Douglas fell ill.
Email exchanges about a trust amendment
The Omega Trust included a trust protector provision. In July, 2016, Mr. Douglas contacted his trust protector and told her that he was not feeling well, and he wanted to make some changes to his trust. He asked her to help him draft an email about amendments to the trust. He also told his trustee that he was making changes.
In August, Mr. Douglas emailed his attorney about the changes, and told his attorney that he had significant health issues. In particular, he wanted to add four new trust beneficiaries, and he told the attorney exactly what he wanted. On August 12, his attorney responded with some questions, and then on August 16 sent a summary of what he understood Mr. Douglas wanted.
Mr. Douglas responded to his lawyer’s email, confirming that the information was correct and reflected the changes he wanted (with a few minor adjustments). The attorney let him know that he was working on revisions.
On August 18, unfortunately, Mr. Douglas died. The formal trust amendment had not yet been drafted, and so of course he could not have signed it.
Could the email string be a trust amendment?
The legal question then became: could Mr. Douglas make a trust amendment by email? Even if the email was unsigned — at least not signed in ink?
One of the proposed new beneficiaries asked a New Hampshire probate judge to approve the purported email trust amendment. The probate judge declined, ruling that Mr. Douglas had not substantially complied with the trust’s own terms regarding amendment. Furthermore, ruled the probate judge, there was not clear and convincing evidence of Mr. Douglas’s intent or wishes.
The potential beneficiary appealed, and the New Hampshire Supreme Court ended up deciding the case earlier this year. The state’s high court reversed the probate judge and remanded the case for further consideration.
Could a trust amendment be made by email? It’s possible, according to the court’s decision. Unless the trust explicitly provides for an exclusive method of making trust amendments, then anything that clearly expresses the settlor’s wishes can be treated as a trust amendment. The only requirement: the evidence of the settlor’s intent must be “clear and convincing.”
What does “clear and convincing” mean?
The trust amendment by email, because it does not comply with the legal formalities, must be shown by “clear and convincing evidence.” But what does that mean?
Lawyers usually describe three levels of proof:
- Preponderance of the evidence — the usual civil standard, which means that the evidence shows that the intended proof is more likely than not. This is sometimes simplified as a 51% likelihood (though that is an oversimplification of the concept).
- Beyond a reasonable doubt — the usual criminal standard, which means that there is virtual certainty about the outcome. This standard is sometimes oversimplified as nearly (but not precisely) 100% certainty.
- Clear and convincing evidence — used for things like, well, the validity of a trust amendment by email, is somewhere between the other two common standards. But is it closer to the 51%, or the almost-100%? Or is it midpoint between the two? No one is quite certain. But judges are pretty sure they recognize it when they see it.
So Mr. Douglas’s email exchange might well be a valid trust amendment. The question for the probate judge at a rehearing will be whether Mr. Douglas’s intent to make a trust amendment by email can be shown by clear and convincing evidence. In Re the Omega Trust, May 12, 2022.
What about an Arizona court?
But would an Arizona probate court allow a trust amendment by email? The Omega Trust case doesn’t give us a clear answer, but it seems that the most likely outcome would be different in Arizona.
First, the New Hampshire Supreme Court decision would not have precedential value in an Arizona probate court. That means that the Arizona judge would not be bound by the decision of a New Hampshire court — even the highest court in that state. But it’s likely that an Arizona probate judge would be interested in the New Hampshire justices’ logic and ruling.
But the Omega Trust case particularly cites the New Hampshire version of the Uniform Probate Code. Arizona has adopted the same law, though every state makes its own small adjustments. One of those is key to understanding the Omega Trust case.
Section 602(c)(3) of the Uniform Trust Code allows amendment (in most cases) by “any other method manifesting clear and convincing evidence of the settlor’s intent.” That’s the version adopted in New Hampshire.
But when Arizona considered the “uniform” law, that seemed like an invitation to the kind of anarchy that allowing more open rules might invite. So Arizona changed the relevant language to “any other writing signed by the settlor manifesting clear and convincing evidence of the settlor’s intent.” Unless an Arizona probate court (and possibly the appellate courts thereafter) ruled that an email was a signed writing, it would be unlikely to serve as a trust amendment.