Can an Email Amend a Revocable Trust?

Can emails to an estate planning attorney constitute an amendment to an individual's revocable trust? This interesting legal question was the focus of a recent appellate case:

Jerry and Mary Trotter, who were married, established the Trust as a revocable trust in 2011, and named themselves collectively as both "Trustee" and "Trustors." The Trust names Timothy, their son, as the successor trustee in the event neither Jerry nor Mary can act as a trustee. The Trust also provides that upon the death of whichever spouse survives the other, certain stock is to be distributed to Timothy, and the rest of the trust estate should be distributed in equal shares to each of several children, including Jerry's daughter from another marriage, Van Dyck.

When Jerry died in 2012, Mary became the sole trustee. According to declarations in the record, Mary intended to exclude Van Dyck as a beneficiary because Van Dyck had already inherited from Jerry's previous wife, and Mary believed Van Dyck had "been fairly provided for" in 2015. In relevant part, the Trust authorized Mary to amend the Trust "by an instrument in writing signed" by Mary and delivered to the "Trustee" — at the time, herself.

In late June 2020, Mary, Timothy, and Matthew Pribyl, Mary's estate planning attorney, exchanged e-mails about amending the Trust, excerpted below. On June 25, before her scheduled surgery on July 1, Mary e-mailed Timothy stating:

"My mind is quite clear now as [to] how to move forward on the house and will.

"I will write it out and then we need to see that the lawyer gets a copy asap and start redoing the will and trust.

"1. The house will go to you

"2. My cash assets will be divided among my five children; nothing to Wendy [¶] . . . [¶]

"The rest of selected items will be assigned to different children/grandchildren and I'm working on that list.

"Thanks, mom"

Mary underwent surgery the next day on July 1, 2020, and contracted an infection while in the hospital. She suffered two heart attacks and passed away a few weeks after her surgery. Timothy became the successor trustee, and when disputes arose about the administration of the Trust, Timothy petitioned the probate court for instructions. He sought, among other things, guidance about "whether under the express terms of the Trust, [Van Dyck], by reason of Mary's writings, has been removed as a beneficiary of the [Trust]."

Timothy J. Trotter (Timothy), successor trustee of the Trotter Family Revocable Trust (Trust), petitioned the probate court seeking guidance about whether certain e-mails from his mother, Mary Trotter (Mary), constituted a valid amendment to the Trust's beneficiaries. The court found that Mary's writings were insufficient to constitute an amendment to the Trust, and it ordered that the Trust be distributed to its original beneficiaries, including Wendy Trotter Van Dyck (Van Dyck).

The appellate court concluded "that at least two of the grounds the court relied on were proper: (1) there was no signed document amending the Trust and the electronic signature provision of the Uniform Electronics Transaction Act (UETA) does not apply because a unilateral trust amendment does not constitute a "transaction" within the meaning of the statute (Civ. Code § 1633.2, subd. (o)); and (2) Mary's writings did not adequately express an intent to amend the trust by the writings themselves."

Trotter v. Van Dyck (2024) ____ Cal.App.4th ____

Complying with a Filing Deadline

It is axiomatic that a party is best served to observe filing deadlines. A judge does not impose filing deadlines for no reason. Rather filing deadlines are imposed to ensure the orderly administration of a case. A party who does not comply with a filing deadline does so at their own peril. This point was recently illustrated in an unpublished appellate opinion.

"On March 28, 2022—five days after the probate court's deadline to file objections to Liane's petition, three days after the court's deadline to file short briefs before the continued hearing, and just two days before the continued hearing itself—Tony filed and served objections to Liane's petition and an opposition brief."

"The probate court began by remarking that although the matter was set for an evidentiary hearing, "I don't think we're going to have one based on what I read." The court explained it had ordered any objections to the petition to be filed seven days in advance of the hearing and had received none. The court also observed it ordered the parties to walk their pre-hearing briefs into the courtroom five days before the hearing but had received only Liane's and Jett's briefs.

Tony's attorney, who was retained to represent Tony solely for purposes of appearing at the continued hearing (and the initial, uncompleted hearing earlier in March), explained that his client had difficulty filing his objections and brief through the electronic filing system. The court said Tony should have walked his filings into the courtroom and explained that as a "pro per litigant" Tony had "the luxury of walking in the door with [his] paperwork to the clerk's office and handing it to the clerk and saying `file it.' That is a luxury only pro pers have."

The probate court stated it would only "consider[ ] the briefs that were given to the court in a timely fashion." When Tony's attorney attempted to argue points raised in Tony's opposition and objections, the court rejected those arguments because Tony failed to timely file those documents: in the probate court's words, "[Tony] doesn't have a chance to have this fight because he did not do what he was required to do." When Tony's counsel asked for a short continuance so that the court could read what his client had filed, the court explained it gave Tony ample to time to file his responses to the petition and reiterated, "I'm not going to hear from him, because he did not do what he was ordered to do." When Tony himself attempted to interject, the court stated, "Mr. Bral, . . . I specifically put forth a briefing schedule and you did not comply with it. Therefore, we are not having this evidentiary hearing based on the fact that there is no need for it."

Tony personally interjected to inform the probate court that he had witnesses that would "respond to every item, every allegation." The probate court then invited both sides to make an offer of proof about what their witnesses would say if called to testify. Liane and Jett provided an extensive offer of proof; Tony did not.

"[B]ased on the briefs that were received," the offers of proof presented by Liane and Jett, and the fact that "no objection [was] lodged to th[e] petition," the probate court granted the petition and immediately suspended and removed Tony as co-trustee."

Estate of Ramin Bral, Los Angeles County Superior Court case #B323383

Promise of an Inheritance

Probate Code §366.3 provides that a party has one year to file a claim to enforce a promise or agreement made by a decedent regarding a distribution from an estate or trust. A recent unpublished appellate opinion involved the applicability of Probate Code §366.3 to the case's particular facts.

"Between the 1960s and the 1980s, decedent Junichi Frisco Yamasaki made repeated oral promises to leave his entire estate to his two sons, petitioners Daniel and Gene Yamasaki, in exchange for their financial support. In the 2000s, after a falling out with his sons, Junichi executed a will and a revocable living trust, through which he completely disinherited his children. In 2012, Junichi amended his trust, naming his long-time girlfriend and new wife, Reiko Nakazawa, as the trust's trustee and the primary beneficiary of his entire estate."

"Around late January 2013, Junichi was hospitalized, and later moved to a nursing facility, after his health deteriorated.

In April 2013, Gene drafted a new lease agreement for the Whittier Laundromat (Amended Lease). The Amended Lease named Junichi as the landlord and Gene as the tenant, and it provided that Gene would pay Junichi $500 per month for a 10-year term. The Amended Lease included two options, allowing Gene to extend the term of the lease for an additional 10 years. The Amended Lease also included an option allowing Gene to purchase the Whittier Laundromat for $5,000 at any time during the initial 10-year lease term or the extended terms. On April 15, 2013, Junichi signed the Amended Lease. Nakazawa signed the agreement as a witness to Junichi's signature.

Nakazawa later testified that she did not review the Lease and the Amended Lease, or otherwise understand what they were, before she signed them."

"In April 2013, Nakazawa filed a petition to be appointed as Junichi's conservator. Nakazawa alleged Junichi had been diagnosed with dementia, a heart condition, and macular degeneration and, as a result, was incapable of caring for himself, including his financial affairs. Nakazawa also alleged that Junichi never read or understood the Lease and the Amended Lease before he signed them. In December 2013, the trial court granted Nakazawa's petition.

In August 2014, Gene filed a petition to confirm the Lease and the Amended Lease under Probate Code section 850, subdivision (a)(3)(A) (Lease Petition).

In July 2015, Junichi died.

In September 2016, the court denied the Lease Petition, finding the Lease and the Amended Lease were unenforceable because Junichi suffered from dementia when he signed them and, therefore, lacked the capacity to enter into the agreements.

In December 2016, over a year after Junichi died, Daniel and Gene filed another petition under Probate Code section 850, subdivision (a)(3)(A), which sought to enforce Junichi's oral promises to leave them his estate when he died."

"In July 2021, the court issued a 23-page statement of decision. As a preliminary matter, the court found the brothers' claim to enforce Junichi's oral promises was barred by Section 366.3's one-year statute of limitations because they filed their petition more than one year after Junichi died."

The California Court of Appeal affirmed the trial court's decision.

Yamasaki et al. v. Nakazawa, Los Angeles County Superior Court case no. BP148064  

Filing an Appeal

Attorneys often act as gatekeepers. I occasionally read appellate opinions in which it is rather clear that the litigant should have consulted with an attorney before filing an appeal. The attorney would have informed the litigant that their case is not as strong as they may perceive. For example, a recent unpublished appellate opinion involved a litigant who should have consulted with an attorney before filing their appeal.

"Although Washington does not have a lawyer representing her in this appeal, "the same rules apply to a party appearing in propria persona as to any other party." (Flores v. Department of Corrections & Rehabilitation (2014) 224 Cal.App.4th 199, 205.) Much of the fact section of Washington's opening brief consists of unsupported allegations of a conspiracy involving, among others, the administrator's counsel, probate court judges, clerks and justices of this court, the justices of the California Supreme Court, an insurance company, the military, the Department of Homeland Security, the CIA, the FBI, two federal judges, the California Highway Patrol, and the police departments of several East Bay cities. The argument section alleges that some or perhaps all of these people and entities violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., and obstructed justice; it also cites Penal Code statutes on attempt and aiding and abetting."

It would be reasonable to conclude that a CA attorney would have advised this litigant not to file such an appeal. It was unlikely, to put it mildly, that the aforementioned parties were a cabal that conspired to thwart the appellant.

Washington v. Washington, Alameda County Superior Court case no. RP2008371

Trust Modification - Haggerty v. Thornton

A common question posed by estate planning clients is how to appropriately amend their trust. Practically every trust will specify how to amend the trust, e.g. through a signed writing, through a signed writing acknowledged before a notary public, etc. 

A recent California Supreme Court case addressed the issue of how to validly modify a trust.

"It is undisputed that if the trust instrument is silent on modification, the trust may be modified in the same manner in which it could be revoked, either via the statutory method or via any revocation method provided in the trust instrument. In this case, we consider the circumstances under which the statutory method is available for modification if the trust instrument specifies a method for modification."

"Brianna McKee Haggerty appeals an order of the probate court finding a trust agreement was validly amended, thereby excluding her from distribution. Haggerty's aunt, Jeane M. Bertsch, created a trust in 2015. The trust agreement included a provision reserving "[t]he right by an acknowledged instrument in writing to revoke or amend this Agreement or any trust hereunder." In 2016, Bertsch drafted an amendment providing for a distribution to Haggerty. The amendment was signed by Bertsch and notarized."

"In 2018, Bertsch drafted an amendment providing that half of her assets would go to various beneficiaries upon her death, including the Union of Concerned Scientists, Patricia Galligan, and Racquel Kolsrud, who are respondents in this case. Haggerty was not listed as one of the beneficiaries. The 2018 amendment was signed by Bertsch but not notarized. Thus, the 2018 amendment was compliant with the statutory method but not with the method of modification specified in the trust instrument."

"After Bertsch's death, Haggerty filed a petition to determine the validity of the 2018 amendment. Haggerty argued that the amendment does not qualify as an "acknowledged instrument" because it was not notarized and therefore was not modified pursuant to the method of modification specified in the trust instrument. In a minute order, the probate court held that the 2018 amendment was valid."

The California Supreme Court held that "under section 15402, a trust may be modified via the section 15401 procedures for revocation, including the statutory method, unless the trust instrument provides a method of modification and explicitly makes it exclusive, or otherwise expressly precludes the use of revocation procedures for modification." 

Haggerty v. Thornton S271483 (Feb 08, 2024)

No-Contest Clause

One method used to deter litigation amongst trust beneficiaries is to insert a no-contest clause in the trust. A no-contest clause provides that a beneficiary will forfeit their inheritance if they challenge the trust's validity and lose. Probate Code §21310(b). Essentially then, a beneficiary must balance the risk of challenging the trust’s validity, an uncertainty, against the assurance of an inheritance, a certainty. Of note, undue influence is probably the most common reason to challenge a trust's validity.

Occasionally I read trusts which state that a beneficiary will forfeit their inheritance, $1, if they contest the trust’s validity. Since $1 will hardly dissuade a litigant, the no-contest clause is rendered effectively useless. Rather the better approach is to increase the size of the inheritance, e.g. $75,000, whereby the litigant will have to seriously ponder the possibility of forfeiting a sizable sum of money should they contest the trust’s validity and lose.

Since January 1, 2010, California has greatly curtailed the impact of no-contest clauses. Now a contestant can challenge a trust’s validity and lose, but still receive their inheritance provided the contestant had “probable cause” when they filed their contest. Probable cause “exists if, at the time of filing a contest, the facts known to the contestant would cause a reasonable person to believe that there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery.” Probate Code §21311(b). A recent unpublished appellate opinion provides an example of this.

In the trial court, the contestant (Randi) lost her contest. The respondent (Fred) appealed the trial court’s decision that the contest had been filed with probable cause. If filed without probable cause, Randi would be disinherited per the trust’s no-contest clause.

“Taken together, the evidence proffered by Randi in her declaration and the declarations from others would cause a reasonable person to believe there was a reasonable likelihood Randi would prevail on the undue influence claim. Marcia was unwell and seemed feeble at the time. Fred had taken her into his home and the evidence supports an inference that he isolated her from her other family and friends. Marcia signed trust documents prepared by an attorney she previously stated she did not want to work with further, and aspects of the Trust seemed inconsistent with Marcia's previously stated practices or desires. Additionally, though Fred did not "unduly" profit from the Trust in the sense that his share of the estate exceeded that of Randi and Julie, a reasonable person could nonetheless consider his receipt of an equal portion an undue benefit given his limited presence in Marcia's life prior to the months leading up to her death. So, too, could one consider his appointment as trustee, a position that gave him both authority and compensation, as an undue benefit under the circumstances."

This part of the opinion was particularly elucidating

“The court also found the evidence pointed to Fred having a virtually non-existent role in Marcia's life until shortly before she passed, and thus, it was not unreasonable to infer that he feared he might be disinherited or only left a small portion of the estate, with a greater portion going to "his apparent nemesis," Randi, who spent a substantial time with Marcia during her lifetime.”

Estate of Sherman, Los Angeles County Superior Court case no. 19STPB10622