Trust BCLP

Trust BCLP

conform to settlor’s intent

Main Content

When Can A Trust Be Reformed To Add Remainder Beneficiaries?

August 26, 2015

Authors

Luke Lantta

When Can A Trust Be Reformed To Add Remainder Beneficiaries?

August 26, 2015

by: Luke Lantta

We’ve looked at a lot of cases where courts have permitted trust reformation or modification.  In many of these cases, trusts had been modified to avoid unintended or adverse tax consequences, to fix a scrivener’s error, or to tweak some administrative provision.  A Florida appellate court’s ruling in Megiel-Rollo v. Megiel causes us to add another potential circumstance to that list: adding remainder beneficiaries.  Adding beneficiaries gets to the core of a trust’s dispositive provisions, so let’s turn briefly to the unique circumstances underlying this decision.

The grantor created a revocable trust naming herself as trustee and beneficiary during her life.  Upon her death, the grantor’s assets were to be “divided between the Beneficiaries as tenants in common in proportion to their respective interests as

Read More

Unintended Tax Results Permitted Trust Reformation

January 7, 2015

Authors

Luke Lantta

Unintended Tax Results Permitted Trust Reformation

January 7, 2015

by: Luke Lantta

Accomplishing a settlor’s tax objectives can be a major factor in creating a trust.  When a drafting error frustrates the settlor’s tax objectives, why shouldn’t  the trust instrument be reformed to reflect the intent of the settlor?  In O’Connell v. Houser, the Supreme Judicial Court of Massachusetts did just that – permitted reformation of a trust to embody the settlor’s intent and produce tax results that were consistent with the settlor’s objectives.

The George Houser Trust established two trusts for the benefit of George’s wife, Mary, and gave her a power of appointment over the marital trust.  When Mary died in 1993, the remaining principal in the George Houser Trust was divided into two “share trusts,” one for each of the Housers’ sons.  Each son had a limited testamentary power of

Read More

Trust Reformed To Comply With Provisions Of Internal Revenue Code

October 19, 2012

Authors

Luke Lantta

Trust Reformed To Comply With Provisions Of Internal Revenue Code

October 19, 2012

by: Luke Lantta

There aren’t a lot of cases out there dealing with reformation of trusts.  Many jurisdictions allow for reformation to conform with the settlor’s intent.  But settlors are usually understood to have meant what they said in the text of the trust instrument.  So what qualifies as an event worthy of trust reformation?

In Rockland Trust Company v. Attorney General, the Appeals Court of Massachusetts showed us one circumstance under Massachusetts law that would allow reformation of a trust:  avoiding adverse tax consequences, but with a caveat . . . .

Read More
The attorneys of Bryan Cave Leighton Paisner make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.