Palozie v. Palozie
2007 Conn. LEXIS 322, 927 A.2d 903, 283 Conn. 538 (2007)
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Rule of Law:
For a settlor to create a valid trust by declaring themselves trustee, they must presently and unequivocally manifest an intention to impose upon themselves enforceable duties of a trust nature. A settlor's failure to communicate the existence of the trust or deliver the trust instrument, while not dispositive, is strong evidence against a final and definitive intention to create a trust.
Facts:
- On February 23, 1988, Sophie H. Palozie (decedent) had her grandson, David Palozie, and his wife witness her signature on two documents.
- The witnesses were not told the nature of the documents, one of which was a 'declaration of trust' for a property on Crane Road, naming her son, Donald L. Palozie, as beneficiary.
- The second document was an unacknowledged quitclaim deed purporting to convey the Crane Road property to herself as trustee for the benefit of Donald L. Palozie.
- Sophie Palozie kept both documents hidden in a box or suitcase in her home and never recorded them or informed Donald Palozie or anyone else of their existence.
- In 1990, a family violence protective order was issued against Donald L. Palozie on behalf of Sophie H. Palozie.
- Sophie Palozie died intestate on March 13, 1991.
- After her death, family members, including Donald, found the documents.
- For nearly twelve years after her death, the Crane Road property was treated as an asset of Sophie Palozie's estate.
Procedural Posture:
- Donald L. Palozie filed an application in the Probate Court seeking title to the Crane Road property from the estate of his deceased mother, Sophie H. Palozie.
- The Probate Court denied the application, concluding the declaration of trust was invalid and unenforceable.
- Donald L. Palozie (plaintiff-appellant) appealed the Probate Court's judgment to the Superior Court (trial court).
- The Superior Court conducted a trial de novo and rendered judgment in favor of the estate's administrators, Richard T. Palozie and Joanne Palozie-Weems (defendants-appellees), affirming the Probate Court's decision.
- Donald L. Palozie appealed the Superior Court's judgment to the Appellate Court, and the appeal was subsequently transferred to the Supreme Court of Connecticut.
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Issue:
Does a declaration of trust create a valid and enforceable trust when the settlor keeps the document a secret, never communicates its existence to the beneficiary or anyone else, and the language of the instrument itself is ambiguous as to whether it is intended to take effect immediately or upon death?
Opinions:
Majority - Borden, J.
No. A valid and enforceable trust is not created where the settlor fails to unequivocally manifest a present intent to be bound by the duties of a trustee. The court found the trust instrument ambiguous due to the phrase 'I make this my last private verbal act,' which suggested a testamentary intent rather than a present intent to create an inter vivos trust. Because the instrument was ambiguous, the court considered extrinsic evidence of the decedent's intent. The decedent’s actions—failing to inform anyone of the trust, not delivering the trust documents, failing to record the deed, and maintaining complete control over the documents and property—are strong evidence that she had not arrived at a final and definitive intention to create a presently enforceable trust. These facts support the trial court's finding that the document was more akin to a 'poorly designed effort to establish a testamentary document' than a valid trust.
Analysis:
This case reinforces the critical importance of a settlor manifesting a clear, present intent to create a trust. It clarifies that while formal communication or delivery of trust documents is not strictly required to form a trust, their absence serves as powerful circumstantial evidence that the settlor had not formed the definitive intention to be bound by trustee duties. The decision emphasizes that courts will scrutinize a settlor's actions and the instrument's language to distinguish a valid inter vivos trust from an ineffective testamentary transfer that fails to comply with the statute of wills. This serves as a cautionary tale about the necessity of clear language and unambiguous actions to ensure a trust's validity.
