April 24, 2014
Authored by: Luke Lantta
Part of the challenge of trust and estate planning lawyers is trying to anticipate the ways in which the words in an instrument will be construed down the road. And there’s no shortage of creativity on the part of those who try to construe these instruments a certain way. Take for example a trust amendment. If a grantor wants to unambiguously supplant prior language in his or her trust instrument, should the grantor merely “amend” the paragraph or should the grantor explicitly “revoke and replace” the paragraph? Does it make a difference?
In In re The H & A Neumann Revocable Trust (unpublished), the Court of Appeals of Minnesota found that it didn’t make a difference – the language was supplanted. A beneficiary of a trust claimed that when the grantors “amended” a paragraph in their trust agreement, the amendment was ambiguous because the grantors did not state that they “revoked and replaced” the paragraph – it was merely “amended.” In other words, the claim was that the amendment inserted language but did not replace the old language. While the appellate court decided that an amendment supplants prior language and under these circumstances it was not necessary to explicitly revoke and replace the prior language, drafters may want to take this as an opportunity to review their form language to ensure that it really says what it means.