The Facts of Stratton v. Stephens
Hillard and Helen, husband and wife, created a revocable trust (“Trust”). They had nine children who were listed as equal beneficiaries of the Trust after the last of the couple to die. Hillard passed away first, and Helen subsequently executed three amendments to the Trust.
Helen’s Second Amendment to the Trust included the following provision:
The balance of the Trust Estate shall be distributed equally to my children who survive me, except Hilda Jane Stratton. They are Bobby Joe Williams, Jimmy Don Williams, Judith Kay Stephens, James Hillard Williams, Tony Marshall Williams, Margaret Helen Mitchell, Ronald Wayne Williams and Ricky Don Williams. I have intentionally omitted Hilda Jane Stratton. I do not want her to inherit or have any part of the Trust Estate.
Helen’s 2015 Amendment to the Trust included the following provision:
It is the expressed intent of the aforesaid Trustor and Trustee, Helen Marie Williams, to disinherit Hilda Jane Stratton and it is the direction that none of the trust assets of property shall be distributed to her or to her lineal descendants.
After Helen passed away, Hilda filed a petition seeking a declaratory judgment determining that the amendments to the Trust were ineffective and invalid. Hilda argued that once the husband had passed away, the Trust became irrevocable and could no longer be amended. The Oklahoma probate court ruled against Hilda and determined that the amendments to the Trust were valid.
Does a Revocable Trust Become Irrevocable Under Oklahoma Law Once One Of the Settlors Passes Away?
No, a revocable trust does not became irrevocable under Oklahoma law once one of the settlors passes away.
Section 60 O.S. § 175.41 states that all trusts are revocable unless they are expressly made irrevocable by the terms of the trust. The Trust in this case did not contain a provision that expressly makes it irrevocable until after both Trustors have passed away.
Under the provisions of 60 O.S. 1961 § 175.41, every trust (other than a spendthrift trust not created by the trustor for his own benefit) is revocable by the trustor unless expressly made irrevocable by the terms of the instrument creating the trust, but any trust (other than a spendthrift trust not created by the trustor for his own benefit) may be revoked by the trustor upon the written consent of all living persons having a vested or contingent interest in the trust. Since an alteration, amendment, revision, or modification of a provision of an instrument creating a trust, in effect, revokes a portion of the trust, we hold that any trust which may be revoked entirely in the manner provided in 60 O.S. 1961 § 175.41 may be altered, amended, revised, modified, revoked, or terminated, in part, in the same manner.
Hilda argued that section 60 O.S. § 175.41 makes it necessary that each person who is included in the term “Trustor” must take part in the revocation and/or amendment of the terms of the Trust. Thus, according to Hilda, since Hillard and Helen were jointly referred to as “Trustor” of the Trust, the Trust could only be amended with the participation of both husband and wife. The Oklahoma appellate court disagreed. Once the husband passed away, the wife was the Trustor of the Trust and could amend the Trust freely under Oklahoma law. The Court concluded:
Title 60 O.S. § 175.41 explicitly states that all trusts are revocable by the trustor unless expressly made irrevocable by the terms of the trust. The Trust does not include any provision that would make it an irrevocable trust after one of the Trustors passes away. As a result, we affirm the decision of the trial court and find that the amendments to the Trust are valid.