If you already have a trust but want to make changes, do you need a trust amendment, or a new will? Can a will even make changes to your trust? Do you need to change both? These confusing questions often mislead people. Even experienced lawyers sometimes make mistakes.
Lloyd and Mabel Meeks’ trust
Washington state residents Lloyd and Mabel Meeks signed a straightforward joint trust arrangement in 1994. Their trust was revocable and amendable so long as both spouses lived. They were the sole trustees of their trust.
When Lloyd Meeks died in 2002, the trust became irrevocable. As the surviving spouse, Mabel Meeks was to receive all the trust’s income. She could even withdraw principal if she needed it. But she could no longer amend or revoke the trust.
Mrs. Meeks did have a limited power to change who would receive the trust assets on her death. She could change the shares received by the Meeks’ descendants, or increase or decrease any share going to a charitable group. To do so, she would need to list her desired changes in her will.
Mrs. Meeks signs a trust amendment
Shortly after Mr. Meeks died, his widow visited the lawyer who had prepared the original trust and other estate planning documents. She explained that she wanted to decrease the share of the couple’s estate that would go to their only child, cap the shares that would go to several other beneficiaries, add two more beneficiaries, and add a residual gift to a breast cancer charity.
The attorney prepared the changes requested by Mrs. Meeks. Those changes took the form of a trust amendment, which Mrs. Meeks signed a few months after her husband’s death.
Tragically, the couples daughter died three years later. This sent Mrs. Meeks back to the lawyer’s office to ask for more changes. This time, she wanted to add one more individual beneficiary, give small amounts to two new charities, and dispose of the bulk of the estate that would have gone to her daughter.
The larger changes requested by Mrs. Meeks would make a new, $100,000 gift to a scholarship fund in her daughter’s memory, and leave the significant increases in residual amounts to the charity added in her 2002 amendment plus a new charity — both of which worked on the kind of cancer that had taken her daughter’s life.
The same lawyer prepared a second trust amendment for Mrs. Meeks’ approval. She signed this new trust amendment in 2005.
Nothing else changed in Mrs. Meeks’ plans for the next decade. She died in 2015, with the original Meeks family trust and the two trust amendments she had signed after her husband’s death. Her will, a classic “pour-over” will (and unchanged since 1994), left everything to the trust and made no other mention of her wishes for disposition of trust assets.
The court proceeding
Because all of the Meeks’ assets were titled to the trust, no probate proceeding was required. But the successor trustee of the trust couldn’t decide what to do about the trust amendments. She filed a court proceeding to determine whether the amendments were effective.
The charity named in Mrs. Meeks’ first trust amendment asked the court to approve both amendments. It argued that Mrs. Meeks’ limited power of appointment over the trust assets permitted her to make most of the changes she had made, even though they were not included in her will. The charity asked the court to reform Mrs. Meeks’ will to act as an exercise of her power of appointment.
The court agreed with the charity’s request, and ordered Mrs. Meeks’ will reformed to include the trust amendment provisions. The successor trustee disagreed, and appealed.
The appellate ruling
The Washington Court of Appeals reversed the trial court’s order. Washington state law might permit reformation of a will if the signer misunderstood or intended a different result. The problem for the appellate judges: Mrs. Meeks hadn’t intended any of the later changes when she signed her 1994 will. It was not possible to reform that will to incorporate later wishes.
Arguments that the trust amendments could be treated as a will codicil were also unavailing. Washington law’s requirements for will execution are modest, wrote the appellate court, but strict. The trust amendments did not have the necessary witnesses required to be a codicil to her will.
The effect of the appellate court’s ruling was to revert the trust’s terms to the way they were written when Mr. Meeks died in 2002. The court might have to figure out what that means, since the trust’s primary beneficiary had died before Mrs. Meeks. But the test would be what the original document provided, not what Mrs. Meeks wanted done in her later trust amendments. Estate of Meeks, July 12, 2018.
What does this mean for you, living in Arizona?
As always, you need to be careful about generalizing too much from the court cases we report here — especially when they come from other states. But there are some principles we can extract from Mrs. Meeks’ story:
- It’s not always easy or obvious to figure out how to change your estate plan. Though it didn’t work out for Mrs. Meeks to talk with her estate planning attorney, that’s still why we think you should meet with a qualified Tucson elder law attorney when updating your Arizona estate plan. It’s often not enough just to understand, or even accurately write down, your wishes.
- Trusts are wonderfully flexible and adaptable instruments. That doesn’t mean they’re necessarily easy to write, understand or modify. Get good advice about your estate plan adjustments, especially after signing a trust.
- When married couples plan, they usually are thinking about the way their world is arranged now, while both are alive. After the death of one spouse, things can get more complicated. That makes it more important to get good legal advice.
- Sometimes it’s just not possible to effect what a client wants. If Mrs. Meeks had gotten good advice and done everything right, she might not have been able to add all the individual beneficiaries she wanted, or made all of the changes she asked for.
Estate planning can be complicated, time-consuming, and even expensive. We’re sorry about that, but we want to make sure your wishes are correctly captured. Any good estate planning attorney will insist on thoughtful, careful analysis of your existing plan and any proposed changes.
