A New Will and Revoking Your Old Trust… The Devil is in the Details!

Devil is in the detailsMany individuals have created revocable trusts that no longer meet their needs or they do not want a trust. They do not care about “avoiding” probate and some actually want court supervision! What happens if an old revocable trust is not properly revoked or, having been revoked, still has assets titled in the trust name?

In Bernal v. Marin, the court answered that question and reviewed, in a case of first impression, Section 736.0602 of the Florida Statutes. Decedent, Zintgraff, created a revocable trust in 2004 and transferred her homestead and a Wells Fargo brokerage account into the name of the trust. Her cousin, Marin was the successor trustee.

In 2008, Zintgraff went to another lawyer and asked her to draft a will and revoke her old trust. Without a copy of the old trust, the new attorney drafted a new will which included language that the decedent revoked “all other wills, trust and codicils previously made by me. ”  After Zintgraff’s death, Marin argued that the trust was not revoked and that the homestead and the Wells Fargo account were assets of the trust and the trust governed the disposition.

The trial court agreed, finding that Section 736.0602(3) had 3 alternatives for revoking the trust (a) by the terms of the trust (In this case there were no provisions for revocation) or (b) if the trust did not provide a method, (1) a later will or codicil which expressly refers to the trust or specifically devises the property that would have otherwise passed according to the trust terms or (2) any other method manifesting clear and convincing evidence of the settlor’s intent. The court determined that while (a) and (b)(1) did not apply, (b)(2) ONLY applied if (b)(1) already applied. As there was no specific reference to the trust instrument, (b)(2) did not apply and the trust was not revoked.

On appeal, the appellate court determined that the lower court read the statute too narrowly and determined that (b)(2) applied and the settlor’s intention should be the polestar by which courts must be guided in determining whether a revocation of a revocable trust has occurred.

The next issue was  whether there was clear and convincing evidence that the settlor intended to revoke the trust. The court reviewed an affidavit of a close friend and the testimony of the drafting attorney and concluded that there was clear and convincing evidence that the settlor intended to revoke the trust.

ADVICE: Whenever you have a client revoke an old trust, READ THE TRUST and if provisions for revocation are in the trust, revoke the trust in accordance with the trust document. In lieu of reading the trust (because the client perhaps can not find the trust), specifically refer to the trust name in the Last Will and Testament. Also, make sure  the client understands that assets titled in the name of the old trust should be  transferred from the trust. Zintgraff had her homestead titled in the name of the trust and the trust was now revoked. If the beneficiary is planning on selling the homestead, then a  title company will need paperwork to ensure title is properly transferred and insured.

WORD OF THE WEEK:Polestar is generally the guiding principle or something that is the center of attraction. The overriding principle in Florida or “polestar” for determining a will or trust meaning is the testator’s or the settlor’s intent in creating an instrument. Sometimes intent language is placed in the instrument, for example, “it is my intent that the primary beneficiary is my spouse and that all trust assets can be used for my spouse, if necessary, even if no trust assets are remaining for the remainder beneficiaries.”

GENEROSITY IS A KEY TO HAPPINESS …REACH OUT AND HELP SOMEONE TODAY! 😎

 

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