Why Review Your Trust – A Tale Of Caution

Hi there, Bridget Mackay here with the offices of Bridget Mackay in Petaluma, California. We work in estate planning and elder law. And today I want to talk about a tale of caution. It has to do with divorce and trusts.

In this tale of caution, we knew someone who had created a trust, not with us but with someone else. And he did it during a time that he was married to his wife of 25 years. In the trust, he disinherited his two natural children. Not only once in the original trust, but there was also an amendment that he also disinherited them in. His estate was to go to his wife and if she didn’t survive him, to his wife’s daughter whom he was close to.

Unfortunately, that couple divorced and a year and a half later he died. The issue was, does the ex-wife still become the trustee of his trust, the main beneficiary? And if she doesn’t, does her daughter become the beneficiary?

And you would be surprised to know what the results are. According to law here in California, the wife or the ex-wife could be the beneficiary of the trust. She would not be able to be the trustee. But she could still be the beneficiary of the trust if it’s shown by clear and convincing evidence that that was his intent regardless of the divorce. Ultimately in the case that we had, there was not enough evidence to meet that that burden of clear and convincing evidence and therefore the case was dismissed. And guess who inherited this gentleman’s trust? The two children that he had disinherited many years ago. Not only once but twice.

It’s really important if you have experienced a separation or a divorce that you review whatever estate planning documents you have. Whether that is will or whether that is a trust. And make sure that the folks that are in it are who you intend to act on your behalf and benefit from your estate should you die.

If you have any questions like this or you have someone, or you need to review your trust and look at it because of a case of a divorce. Give an experience estate planner a call and they could surely help you.

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