The following article about making changes to a trust AFTER death is about a situation in Michigan, so the outcome might not be the same here in Ohio, but I found it interesting anyway. You might too. If nothing else, it illustrates the complexities of the law wherever you live. The article was published on JDSupra on 8/4/23 and written by Warner Norcross & Judd.
Again, what happens in Michigan may not apply to what might happen in Ohio but it is interesting to note that once a trust is in place, changes requested by disinherited heirs, are not taken lightly by the court. We’ll never know if Ms Brody intended to update her trust to include Gerald again. It does point out the importance of keeping your estate plan up-to-date to ensure those to whom you wish to inherit your assets actually do. If it has been a while since you reviewed and updated your estate plan, let’s get something on the schedule now. Call me at 513-399-7526 or visit my website at www.davidlefton.com.
The following article about making changes to a trust AFTER death is about a situation in Michigan, so the outcome might not be the same here in Ohio, but I found it an interesting anyway. You might too. If nothing else, it illustrates the complexities of the law wherever you live. This was published on JDSupra 8/4/23 and written by Warner Norcoss & Judd
“A person communicates a desire to make estate planning changes in the future but dies before the changes are made. Can a court modify or reform a trust to give effect to this intent?
No. In re Brody Trust, Docket No 362214 (Mich Ct App July 20, 2023).
Rhea Brody had three children, one of whom was Gerald. Rhea had initially named all of her children as equal beneficiaries of her trust, but later amended the trust to disinherit Gerald. After her death, Gerald filed a petition asking the court to modify or reform the trust to reinstate him as a beneficiary. Gerald argued that his mother cut him out of her trust because he was going through a bankruptcy, she did not want his creditors to access the trust funds, but intended to add him back in as a beneficiary after his bankruptcy ended.
The court considered whether MCL 700.7415 could apply, which provides that a “court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.” The court explained there are two types of mistakes: 1) mistakes as to the legal effect and 2) mistakes in reducing the intent into writing.
The court dismissed Gerald’s petition because Gerald acknowledged his mother intended to cut him as a beneficiary with the trust amendment (not a mistake). “The question is not whether Rhea was mistaken about the legal rights of parties in a completely separate bankruptcy proceeding. Rather the question is whether Rhea was mistaken about the legal effect of the trust document itself. On that point, Gerald agrees that Rhea’s purpose in revising the trust document was to disinherit him. That is exactly what the revised trust accomplished.”
In concluding, the court importantly noted that “what [Gerald] thought Rhea might do in the future was not a basis for reforming or modifying the trust.”
Again, what happens in Michigan may not apply to what might happen in Ohio. Still, it is interesting to note that once a trust is in place, changes requested by disinherited heirs are not taken lightly by the court. We’ll never know if Ms. Brody intended to update her trust to include Gerald again.
It points out the importance of keeping your estate plan up-to-date to ensure those you wish to inherit your assets actually do. If it has been a while since you reviewed and updated your estate plan, let’s get something on the schedule now. Call me at 513-399-7526 or visit my website at www.davidlefton.com.
Source: JDSupra; 8/4/23 by Warner Norcoss & Judd