Amending a California Trust
In California, people who own real property generally establish a revocable living trust, as settlors, and transfer title to their assets to themselves as trustees to avoid probate when they die. While alive, a settlor retains the separate powers to revoke and amend their living trust, so long as they have the mental capacity to do so.
Trust amendments range from minor modifications to complete restatements of the entire trust itself. Typically trust amendments may involve changes to who acts as successor trustee and/or who inherits what assets and/or share of the trust at the settlor's death. To be valid, the trust amendment must be properly executed.
Sections 15401 and 15402 of the Probate Code say how a trust can be revoked or amended. Section 15402 provides that, “unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify [amend] the trust by the procedure for revocation [in section 15401].” Trusts typically say how the settlor can validly revoke or amend the trust and typically require that the amendment be acknowledged by a notary public.
Until now, there was a longstanding disagreement amongst California's appellate courts regarding whether a settlor had to follow the procedure stated in the trust itself to amend the trust or, alternatively, could follow the statutory procedure in section 15401 to revoke a trust that also applies to amending trusts.
Section 15401 provides that, “(a) A trust that is revocable by the settlor or any other person may be revoked in whole or in part by any of the following methods: (1) By compliance with any method of revocation provided in the trust instrument. (2) By a writing, other than a will, signed by the settlor or any other person holding the power of revocation and delivered to the trustee during the lifetime of the settlor or the person holding the power of revocation. If the trust instrument explicitly makes the method of revocation provided in the trust instrument the exclusive method of revocation, the trust may not be revoked pursuant to this paragraph.” Again, the rule in section 15401 applies to amending a trust and, importantly, does not require that the amendment be acknowledged by a notary public.
In BRIANNA MCKEE HAGGERTY, v. NANCY F. THORNTON S271483 (Cal. Feb 08, 2024) the California Supreme Court resolved the aforementioned legal disagreement — whether the amendment procedure in the trust must be followed to the exclusion of the statutory procedure in section 15401 — on a statewide basis. The Supreme
Court held that, ”… under section 15402, a trust may be modified via the section 15401 procedures for revocation, including the statutory method, unless the trust instrument provides a method of modification and explicitly makes it exclusive, or otherwise expressly precludes the use of revocation procedures for modification.”
Typically speaking the statutory method in section 15401 is more easily fulfilled as the methods typically found in trusts all require an acknowledgement (as was the true in the Haggerty case) to be valid. Of course, a trust may be drafted to require that its stated procedure for amending the trust is the only procedure that can be used and exclude the section 15401 statutory procedure which does not require a notarization of the amendment.
The foregoing brief discussion is not legal advice. Consult a qualified attorney for guidance. Dennis A. Fordham, attorney, is a State Bar-certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@dennisfordhamlaw.com and 707-2633235.
Trust amendments range from minor modifications to complete restatements of the entire trust itself. Typically trust amendments may involve changes to who acts as successor trustee and/or who inherits what assets and/or share of the trust at the settlor's death. To be valid, the trust amendment must be properly executed.