Revoke vs. Amend: The Tricky Difference to Altering Your San Diego Trust

Revoked-2

As if Trust law wasn’t confusing enough already, here’s a little known twist on how to change or simply terminate your revocable Trust.  Once a revocable Trust is created, you retain the power to either amend the Trust and change its terms around, or to terminate the Trust altogether (referred as revoking the Trust).  But the manner in which you amend versus revoke can be very different.

Under Probate Code section 15401, to revoke a Trust you can either: (1) follow the Trust terms for revocation, or (2) follow 15401(a)(2), which allows for revocation by a written revocation (but not a Will, it must be a separate writing), signed by the Settlor and delivered to the Trustee.  What if you set forth a very careful procedure for revoking your Trust, must it be followed?  Not necessarily.  In fact, 15401 states that the Trust terms for revocation must only be followed if the Trust states that its method is the “exclusive” method for revocation.  If the Trust does not make its method “exclusive”, then you can follow either the Trust or the probate code, either way works just fine.

Compare that to amending your Trust.  For amendments, Probate Code section 15402 says “unless the trust instrument provides otherwise, …the settlor may modify the trust by the procedure for revocation.”  Here’s the strange part, California courts have interpreted this language to mean if a Trust has an amendment provision, then the Trust provisions must be followed.  No other method of amending are allowed.

See the difference?  For revocation you can use either the Trust terms or the probate code; whereas amendments required you follow the Trust terms ONLY.  Why the difference?  It has to do with the statutory language for amendments.  Section 15402 says “unless the trust instrument provides otherwise”, meaning any amendment provisions in the Trust provides otherwise.

The revocation statute says it applies unless the Trust instrument states that it is the exclusive method for revocation.  The fact that a revocation provision is present is not enough, by itself, to preclude the probate code from applying.