Zoel and Edna Lynch, settlors, established a revocable trust for themselves and their children and grandchildren. The trust outlined that during their lifetimes, the trust would distribute income to support the settlors. On their deaths, the trust stated that the trustee was suppose to make a number of distributions of $100,000 to each of the settlor’s children and $ 50,000 to each of their grandchildren. In the course of their lifes, Edna became incapacitated, and so Zoel executed several amendments to the trust. However, the original trust stated that changes could only be made to the trust if the settlors placed the changes in writing with the signatures of both settlors and delivered them to the trustee. When the trustee discovered the amendments, the trustee tried to give affect to the changes. The changes had severely reduced the amount that both the children and the grandchildren would receive and so they challenged the amendments.
In King v. Lynch, the California Court of Appeals held that while the California Probate Code provides that a settlor may alter a revocable trust, a trust instrument’s terms override the default language. Therefore, the court must give affect to the trust language, which meant that the amendments were invalid.
See Kronick, Moskovitz, Tiedemann & Girard, When A Trust Specifies How It May Be Modified, A Modification Made Differently Is Not Valid, JDSupra, Apr. 24, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
