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After signing a Trust, it is important to remember to review it regularly. The Trust should not collect dust in the closet. A properly drafted Trust will be effective from the date of signing through death. However, to ensure that the Trust is most effective your Trust must be regularly reviewed. Once a Trust has been established, there may be a desire by the Settlor to amend its terms. In order to properly amend a Trust, the Settlor must adhere to the requirements set forth in Michigan’s statute that governs how to amend a trust, specifically MCL 700.7602(3). The requirements to amend a Trust vary based on whether the terms of the Trust expressly provide an amendment process. The statute provides that the Settlor may “amend…a revocable trust…by substantially complying with a method provided in the terms of the trust.” (emphasis added).
The Michigan Court of Appeals interpreted this clause when it decided In re Stillwell Trust. In that proceeding, the court had to determine whether a handwritten, unsigned note written by the Settlor substantially complied with the amendment process set forth in the Trust. The Trust in Stillwell stated that “the Grantor may by instrument in writing delivered to the Trustee…modify or alter this Agreement in any manner.” The handwritten notes stated that the Settlor’s grandchildren were to have their student loans paid off before any other distribution and that her son in law was to share in the distribution of her personal property. Despite the fact that these directives were only committed to handwritten and unsigned notes, the Court held that they were valid amendments because they were in substantial compliance with the amendment method stated in the Trust.
If, however, the Trust does not contain an amendment provision, or if the amendment provision is not exclusive, there must be “clear and convincing evidence” of the Settlor’s intent to amend a Trust. The requirements to prove the Settlor’s intent will vary depending on the type of Trust involved. If the Trust is a written one, the amendment’s proponent must provide another writing manifesting the Settlor’s desire to amend a Trust. Oral Trusts, on the other hand, provide the proponent of the amendment with a little more flexibility. The statute provides that when there is an oral Trust, the settlor’s intent to amend a Trust can be proven “by any method.”
However, the clear and convincing evidence standard still applies to both types of amendments. While not as strict as the reasonable doubt standard required for guilt in criminal proceedings, the clear and convincing evidence standard is a higher burden than the preponderance of evidence standard normally present in civil proceedings, which only requires that something be more likely than not to be proven. So while a Settlor’s intent to amend a Trust can be proven by any method when there is an oral Trust involved, the proffered evidence must still meet a high burden before it will be admitted.
To properly amend a Trust, it is important to contact your attorney to draft the changes correctly.
Contact The Probate Pro at (833) PROBATE if you have further questions about how to amend a Trust or any other probate or Trust matter.
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