MAY 22, 2022 ~ NICHOLAS CHUCKAS
Probate Stars discusses the Iowa Supreme Court’s decision in Little v. Davis to uphold the decision of the district court that a surviving settlor of an irrevocable trust cannot, even with the consent of all beneficiaries, modify the dispositive terms of an irrevocable trust without court approval.
Donald and Collen Davis established a trust (the “Trust”). The Trust could be amended while they were both living and competent, but provided that “[u]pon the death of the first Co-Trustor to die . . . the then surviving Co-Trustor . . . shall not have the power to amend, revoke and/or terminate the [trust].”
Upon the death of the surviving spouse, the Trust estate was to be distributed to Donald’s four children: Keith, Donald Jeffrey, and Katina. Collen predeceased Donald. At some point after Collen’s death, Donald decided he wanted to amend the dispositive terms of the Trust. His attorney prepared a consent document. The consent document acknowledged that the trust agreement provided the surviving trustor did not have the power to amend, revoke, or terminate the trust. The consent document stated the purpose of the irrevocability provision—to protect Donald’s farmland against any claims from Collen or her children—no longer existed. The second page of the consent document contained signature lines for Donald and each of the four beneficiaries of the trust underneath a single paragraph. That paragraph stated:
THEREFORE, the undersigned, being the current trustee, the current income beneficiary, and all of the adult beneficiaries who would receive a share of the trust if Donald K. Davis was not living, hereby agree that Donald K. Davis, as surviving Trustor and as surviving Trustee, shall have the power and authority to alter, amend, or revoke the DONALD K. & COLLEN DAVIS FAMILY TRUST[.]
See Probate Source’s Summary by clicking: Iowa Supreme Court: Surviving Settlor Cannot Modify Irrevocable Trust Without Court Approval
See original opinion by clicking: Little v. Davis
Posted by Nicholas Chuckas, Associate Editor, Wealth Strategies Journal