A revocable trust can be revoked pursuant to a statutory method set forth by section 15401 of the California Probate Code unless the trust document explicitly provides the exclusive method to revoke the trust. In Cundall v. Mitchell Clyde, the California Court of Appeals, Second District, Division Two, determined that the trust document did not explicitly mandate an exclusive method to revoke the trust, by analyzing the trust document and the clear language of section 15401.
The Facts of Cundall v. Mitchell-Clyde
Martin, Cundall, and Diaz were all neighbors in West Hollywood. After feeding Martin’s cats and seeing the inside of Martin’s home, Cundall realized that Martin’s home was unsafe. Martin moved into one of Cundall’s rental units while Cundall remodeled Martin’s home.
While the remodel was underway, Martin engaged Diaz, a lawyer, to take over managing Martin’s finances and preparing an estate plan. Diaz prepared the February Trust, which Martin executed in February 2009. Under the February Trust, Martin was the trustee and Cundall was the sole beneficiary and successor trustee.
Regarding revocation and amendment, the February Trust stated:
During the Grantor’s lifetime, the Grantor may revoke at any time, and/or the Grantor may amend, this Agreement by delivering to the Trustee and the Successor Trustee an appropriate written revocation or amendment, signed by the Grantor and his attorney, Frances L. Diaz. The powers of amendment may be exercised by a duly appointed and acting attorney-in-fact for the Grantor for the purpose of withdrawing and/or distributing assets from the Trust.
Revocation of The February Trust
Martin decided that he wanted to regain control of his finances and property. Martin met with attorney Paul Kanin in March 2009. Martin told Kanin that he thought Cundall and Diaz had stolen from him and instructed Kanin not to speak with Diaz.
On May 12, 2009, Martin executed the May Trust. The beneficiaries of the May Trust were two of Martin’s friends, Mitchell-Clyde and Ronald Preissman. Preissman was also the successor trustee.
On that same date, Martin executed a revocation of the February Trust. The revocation document stated in full that: “[t]he undersigned, John W. Martin, as Grantor and Trustee, hereby revokes the John W. Martin Living Trust Dated February 11, 2009.” The revocation was signed only by Martin.
The relationship among Diaz, Cundall, and Martin continued to deteriorate after the May Trust documents. Diaz attempted to establish that Martin was not in his right mind.
Martin died in January 2010.
In September 2010 Cundall filed a Petition for Instructions under section 17200 of the California Probate Code. Martin sought a determination that the February Trust was not validly revoked and that all trust assets should pass to him. The beneficiaries of the May Trust objected to the petition and filed a separate petition seeking a determination that the February Trust was properly revoked and that the May Trust was valid and enforceable.
The California probate court determined that:
- There was no evidence of Martin’s lack of capacity or that Martin was the subject of undue influence by Cundall or Diaz with respect to the February Trust.
- There was no basis to reform the February Trust to require Diaz’s consent to revoke the trust.
- The February Trust did not provide an explicitly exclusive means of revocation.
Martin’s revocation was determined to be valid under the statutory revocation method set forth in section 15401(a)(2) of the California Probate Code.
How Do You Revoke A Revocable Trust Under California Statutory Law?
Section 15401(a) of the California Probate Code establishes two alternative “methods” through which a revocable trust can be revoked.
First, a trust can be revoked “by compliance with any method of revocation provided in the trust instrument.”
Second a trust may be revoked “[b]y a writing, other than a will, signed by the settlor or any other person holding the power of revocation and delivered to the trustee during the lifetime of the settlor or the person holding the power of revocation.”
Section 15401 established one exception to the availability of the alternative statutory revocation mechanism:
If the trust instrument explicitly makes the method of revocation provided in the trust instrument the exclusive method of revocation, the trust may not be revoked pursuant to this paragraph.
Here, the California probate court found that Martin complied with the statutory revocation procedure by execution the May 2009 revocation of the February Trust and then receiving a copy of the executed revocation from his attorney.
No Exception To The Statutory Revocation Procedure For Trusts That Designate Persons Who Must Approve Revocation
Cundall argued that Martin could not use the statutory revocation method in section 15401 because it is not available when the trust establishes that a trust protector must approve a revocation.
The California appeals court reviewed the plain language of section 15401 to determine that the statute is clear that, “unless a trust document contains an explicit statement that the trust’s revocation method is exclusive, the statutory revocation method is available, regardless of whether the trust document requires that a particular person approve revocation.”
Therefore, the designation of a trust protector did not make the statutory revocation method inapplicable to the February Trust.
An “Exclusive” Method of Revocation Must Be Explicitly Stated
Section 15401 of the California Probate Code states that the statutory method of revocation is not available if the trust explicitly makes the method of revocation exclusive.
The February Trust did not explicitly state that the method to revoke the trust was exclusive.
The California probate court therefore correctly concluded that Martin effectively revoked the February Trust under the statutory method by executing the revocation document in May 2009 and receiving an executed copy of the revocation from Kanin.
