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California Trust Litigation – When the Surviving Spouse Can Amend the Entire Trust

by | Dec 31, 2022 | Firm News

This is the second in a series of Blog posts in which Buffington Law Firm’s trust litigation attorneys discuss certain estate planning scenarios that seem to frequently lead to trust disputes and trust litigation.  This Blog post will discuss the situation in which, in a family trust, the trust instrument gives the surviving spouse the full power to amend the entire trust after the first spouse (“deceased spouse”) passes away.

A little background first.  Most trusts, often called “standard A/B trusts”, are set up such that when the first spouse dies, the trust is supposed to be divided up into the “A Trust” and the “B Trust” — often called the Survivor’s Trust and the Decedent’s Trust.  The deceased spouse’s share of the estate (his or her share of the community property and any separate property) would be placed in the Decedent’s Trust — which by terms of the trust instrument, would be irrevocable.  The way most trusts are written, this means that while the Surviving Spouse can use money out of the Decedent’s Trust for certain purposes, such as big medical bills and things like that, the Surviving Spouse cannot gift this money to others, or interfere with the testamentary bequests that the Deceased Spouse set up. Thus, for example, if the Deceased Spouse provided that the Decedent’s Trust would devise to his or her own children after the death of the Surviving Spouse, the Surviving Spouse cannot change this by way of a Trust amendment.

Problems arise when a trust is drafted whereby the trust permits the Surviving Spouse to amend the testamentary dispositions of the Deceased Spouse after the latter’s death.  When this provision is combined with the common scenario whereby the Deceased Spouse’s children are not also the children of the Surviving Spouse, all the pieces are in place for a whopping trust dispute.

Often in this scenario, once the Deceased Spouse passes away the Surviving Spouse instantly amends the trust disinheriting the children or other beneficiaries designated by the Deceased Spouse.  Needless to say, once the Deceased Spouse’s children or heirs learn of this, they often seek to initiate trust litigation in which they challenge the validity of these provisions, often alleging Undue influence or lack of testamentary capacity on the part of the Deceased Spouse in agreeing to this provision.

Sometimes there is validity to these claims.  Too often Buffington Law Firm’s trust litigation attorneys have litigated situations in which a deathbed Restated Trust gives this power of amendment to the Surviving Spouse in almost unreadable “legalese” that is done via convoluted language that only an experienced lawyer can untangle.  There is often a factual basis for great doubt as to whether the now Deceased Spouse, who may have been ill, infirm, or suffering weakness of mind at the time that the Restated Trust was presented to him or her, could have understood that the Restated Trust was eliminating the usual safeguards of the standard A/B trust.

Sometimes, of course, this is what the couple actually wants.  Every case is different.  But Buffington Law Firm recommends that estate planning attorneys thoroughly document the intent and understandings of both spouses in this context. We recommend that a plain language disclosure be contained in the trust, not merely in Estate Planning workpapers Make the Trust self-documenting.

If you are involved in a trust dispute of any kind, Buffington Law Firm’s trust litigation attorneys invite you to contact us for a Free Legal Consultation.  There is never any obligation and all consultations are protected by the attorney-client privilege.