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April 2, 2024 / Newsletters, Publications

Haggerty v. Thornton: Be Sure to Include Modification Procedures in Your Trust Planning

By Behrouz S. Arani

In the recent California Supreme Court case of Haggerty v. Thornton, the California Supreme Court upheld the findings of the San Diego probate court and the California Court of Appeal and ruled that a settlor’s final handwritten amendment of her revocable trust was a valid method of modifying the terms of her revocable trust under the California Probate Code, even though it did not comply with the trust provisions for the method of amending the trust.

Haggerty arose from the appeal of Brianna McKee Haggerty – who was a purported successor trustee (and purported beneficiary) – from the order of the probate judge who had ruled that the settlor’s handwritten amendment of her revocable trust-which resulted in Haggerty being excluded from trust distributions-was a legitimate method of modifying the trust. The specific terms of the trust in Haggerty provided that the settlor had the right, through a notarized, written instrument, to revoke or amend the trust. The first trust amendment by the settlor, which was signed by the settlor and notarized, named Haggerty as a trust beneficiary. A subsequent amendment, which removed Haggerty as a beneficiary, was signed by the settlor but not notarized. Haggerty argued that the final amendment was invalid because, per the terms of the trust, any trust amendment required a notary acknowledgement. The probate judge disagreed and ruled that the amendment was validly made when the settlor signed and delivered the amendment to herself as trustee under the statutory method of a trust modification, which did not require notarization. On appeal, the Court of Appeal affirmed the probate court’s decision.

Under California Probate Code §15402, a trust may be modified by the same procedures outlined in Probate Code §15401 for the revocation of a trust, unless the trust expressly provides a­ specific method of modification and clearly makes that method exclusive. Since the trust in Haggerty did not state that the procedure for amending the trust (in a written instrument acknowledged by a notary) was the exclusive method for amending the trust, the Supreme Court confirmed the probate court’s decision that the method of modifying a revocable trust through the statutory procedure in the California Probate Code was also available to the settlor. The statutory procedure only requires that that the modification of a revocable trust be made in writing, signed by the settlor and delivered to the trustee, and does not require the writing to be notarized.

Haggerty provides guidance to estate planning practitioners and clients to note that if the procedure for modification in a trust is not explicitly or implicitly exclusive, the statutory procedure under the California Probate Code can also apply. Therefore, if the intent is to preclude the use of the statutory method for modification, the trust must explicitly state that the trust’s method of amendment is the exclusive method.

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