Binding agreement voids revocable trust

A husband and his wife executed mutual wills and an agreement not to change their wills. Prior to executing the wills, the husband transferred substantial property to his wife to equalize their probate estates.

Before his death, the husband engaged in day trading and incurred substantial losses. After the husband’s death, his wife transferred all of her property to a revocable trust which on her death made distributions different from those in her will. After her death, the disappointed will beneficiaries sued and won summary judgment.

The court in Self v. Slaughter, No. 1061041, 2008 WL 5274663 (Ala. Dec. 19, 2008), affirmed, holding that the agreement was valid, that the husband’s losses did not cause a failure of consideration, and that the creation of the trust breached the agreement even though it did not involve a change in the will.