Q: My mother had a living trust. My mother died and my brother and I are now arguing about distribution of her assets. He claims the trust does not reflect mom’s intent. How do we settle the dispute?
A: Courts are often asked to settle arguments about dispositive provisions in a will or trust. In settling those arguments, Judges first read the document to see if the Judge thinks there is any ambiguity. If there is no ambiguity, the Judge will interpret the document based upon the Judge’s determination of the clear meaning of its language.
These disputes often involve one of the parties trying to force a different meaning by straining to find words have meaning other than their usual use. In interpreting the document, the Judge will apply the usual and ordinary meaning of words.
If the Judge finds that there is an ambiguity, either because the language is unclear or the words used can have more than one meaning, the Judge can hear evidence to determine the intent of the person establishing the trust or will (generally referred to as a settlor for a trust or testator for a will). The attorney who drafted the instrument may be a witness. Members of the family can be witnesses. Other documents, letters and writings by the settlor may be reviewed. The Court never gets to that evidence if it does not find the document ambiguous.
These disputes underscore the importance of good drafting. Even the simplest language can go awry. For example, in the case of Provost v. Justin, a husband and wife created a revocable living trust. The trust provided that during “the life of the settlors, this trust may be amended, altered, revoked, or terminated, in whole or in part, or any provision hereof, by an instrument in writing signed by the settlors and delivered to the trustees.” The husband died and the wife later amended the trust to remove one of the beneficiaries. The Judge interpreted the quoted language to authorize amendment only while both settlors were both alive. The Judge ruled the language was unambiguous and the wife’s effort to amend was invalid.
In the case of Bryan v. Dethlefs, a trust provided that upon the settlor’s death, the assets in the trust were to be distributed to Robert Bizzel, if he was living at the time of distribution. The settlor died, and the successor trustee began distribution to Robert Bizzel. Robert Bizzel died before all of the trust assets were distributed to him.
One of the beneficiaries of Bizzel’s estate argued that all of the assets in the trust became Bizzels at the time of the settlor’s death and were therefore part of Bizzel’s estate. An alternative beneficiary under the trust argued that because Bizzel died before final distribution, the assets remaining in the trust at Bizzel’s death were not part of Bizzel’s estate and must be distributed to the alternate beneficiaries under the trust.
The Judge interpreted the language to hold that Bizzel was vested with ownership at time of the settlor’s death and that the settlor actually intended distribution at the time of the settlor’s death.
Recognizing that drafting mistakes can occur, the Legislature adopted the Florida Trust Code effective July 1, 2007. The Code provides for reformation of a trust, even if it is unambiguous, if reformation is needed for the trust to carry out the settlor’s intent.
To reform a trust, the settlor’s intent must be proven by clear and convincing evidence and also that the trust does not carry out that intent due to a mistake of fact or law.
Courts do not have the same authority to reform a will, but some courts have stretched the concept of interpretation to carry out a testator’s intent. In the case of In re Estate of Wood, the Court even stated it could “construe a will as if words were inserted therein” when such words were omitted solely by inadvertence and were essential to the testator’s intents.
The possibility of reforming a trust or reaching the intent of the testator or settlor through interpretation is no substitute for good drafting. They are opportunities to correct mistakes. You may need one or more of these opportunities in your case. I suggest you discuss your facts with an experienced attorney to explore all possible options.