Statutory Trust Revocation May Reward Devious Spouses - Punish Sloppy Trust Drafting

It has long been settled that under California probate law, if the trust does not provide for an exclusive method of revocation, the settlors may revoke either by the method contained in the trust or by resort to procedures outlined under statutory revocation. California Probate Code §15401. So we can imagine a scenario where a San Diego trust attorney drafts a trust (see “Living Trust Advantages“) for a husband and wife. Only one method of revocation is provided in the instrument – but that method requires the consent of both husband and wife to revoke the trust. The catch is that the trust does not provide that this method of revocation is the sole and exclusive method for revocation.

Both husband and wife transfer all of their property to the trust. Afterwards, the husband has second thoughts, and decides to revoke the trust without telling his wife. He complies with the statutory method for revocation, and places all of his property – including his share of the community property – in a trust naming children from a prior marriage as beneficiaries. The wife is unaware of the revocation, and upon the husband’s death, learns that she will receive nothing from her husband’s estate. These are the facts of Masry v. Masry, decided on September 4, 2008. 2d Civil No. B201185. Mr. Masry’s post-death surprise was upheld by the probate court (see “What is Probate?”) because the trust drafter failed to protect Ms. Masry. San Diego estate planning lawyers should take the lesson to heart, and prevent the same result in their living trusts.

Filed under: Estate Planning - Generally, Probate, Probate Litigation, San Diego Estate Planning, Trusts, Wills and Trusts