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Patterson v. Patterson

Utah Supreme Court
2011 UT 68, 266 P.3d 828 (2011)
ELI5:

Rule of Law:

Under the Utah Uniform Trust Code (UUTC), a settlor may amend a revocable trust to completely divest a beneficiary's interest by any method manifesting clear and convincing evidence of intent, unless the trust document provides a method of amendment that is expressly made exclusive. This statute supersedes the common law rule requiring strict compliance with the trust's terms for modification.


Facts:

  • In 1999, Darlene Patterson created the Darlene Patterson Family Protection Trust, naming her children as beneficiaries upon her death.
  • The Trust instrument reserved Darlene the right to 'amend, modify, or revoke the Trust in whole or in part... by written instrument.'
  • The Trust also contained a provision stating that beneficiaries' interests were 'vested interests subject to divestment which shall continue until this Trust is revoked or terminated other than by death.'
  • In 2006, Darlene executed a written amendment to the Trust.
  • The amendment's stated purpose was to remove her son, Ronald (Ron) Patterson, as a beneficiary, explaining she had 'already properly provided for this son during his lifetime.'
  • Darlene Patterson passed away eleven months after executing the amendment.

Procedural Posture:

  • Ronald (Ron) Patterson filed a lawsuit in district court against the Trust and Darlene's estate, seeking a declaration that the amendment removing him as a beneficiary was void.
  • Ron moved for partial summary judgment, arguing the amendment was invalid under the precedent of Banks v. Means.
  • Randy Patterson, the trustee, filed a cross-motion for partial summary judgment, seeking to have the amendment validated.
  • The district court granted Ron's motion, concluding it was bound by the Banks precedent, and invalidated the amendment.
  • Randy Patterson, as trustee and appellant, successfully petitioned the Utah Supreme Court for an interlocutory appeal.

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Issue:

Does a written amendment to a revocable trust that completely removes a beneficiary's interest, but does not revoke the entire trust, validly terminate that interest under the Utah Uniform Trust Code, even where prior case law required a full revocation for divestment?


Opinions:

Majority - Justice Parrish

Yes. Under the Utah Uniform Trust Code (UUTC), a written amendment that removes a beneficiary is a valid method of terminating that beneficiary's interest, as the UUTC statutorily overrules the stricter common law standard established in Banks v. Means. The court first determined it could consider the UUTC's applicability despite it not being raised at the trial level, as it is controlling authority that directly bears on the issue. The court then contrasted its prior ruling in Banks, which required strict compliance with trust terms and a full revocation to divest a beneficiary's interest, with the UUTC. The UUTC, particularly section 75-7-605, treats revocable trusts as will-equivalents, prioritizing the settlor's intent. It permits amendment by any method manifesting 'clear and convincing evidence of the settlor's intent' unless the trust's specified method is 'expressly made exclusive.' Darlene's trust stated it 'may' be amended by written instrument, which is not exclusive language. Therefore, her written amendment, which provided clear and convincing evidence of her intent to remove Ron, was a valid exercise of her power to modify the trust.



Analysis:

This decision marks a significant shift in Utah trust law, cementing the legislative override of the formalistic common law rule from Banks v. Means. By prioritizing the settlor's intent over strict compliance with the trust's original terms, the court aligns the treatment of revocable trusts with that of wills, providing settlors with greater flexibility and certainty that their subsequent wishes will be honored. This holding clarifies that unless a trust explicitly restricts the method of amendment to a single, exclusive procedure, any clear manifestation of the settlor's intent will be legally effective. Consequently, future litigation over trust amendments will focus less on technical compliance and more on the evidentiary clarity of the settlor's intent.

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