Reforming a Trust

new york wills and trusts lawyerSurrogate Rita Mella, sitting in the Surrogate’s Court in New York County, recently had a case involving the issue of reforming and/or changing a trust. In this case, the two co-trustees brought a proceeding to make major modifications to the terms of the trust. These trustees requested they be given a limited power to invade trust principal. The trust itself did not give them this power. They also sought to change the age current beneficiaries of the trust were to receive distributions of their shares of the trust. This action would speed up the termination of the trust.

Surrogate Mella took into consideration the trust was established for the benefit of a group of members of the decedents family. The trust was specifically designed to provide financial benefit to grandnephews and grandnieces. Each of them would receive a share of the trust after reaching the age of 25.

The co-trustee referred to a case called The Matter of Kern for support of their position that if the parties to the trust were in agreement, there was a basis for the court reforming the terms of a testamentary trust. Unfortunately for the trustees, Surrogate Mella disagreed with their position. She found that the case Matter of Kern did not stand for the proposition alleged by the co-trustees.

Surrogate Declines to Modify Trust

Surrogate Mella in her decision declined to modify the trust. Her holding was the intentions of the testator in drafting the trust were clearly expressed in his will. The fact the co-trustees and the beneficiaries sought to modify the terms of the trust did not establish a basis in law or judicial precedent for the court to disregard the clear and concise terms of the will that created the trust. The co-trustees’ application to reform the will was denied.

help in planning trustsElliot S. Schlissel is a member of the National Academy of Elder Law Attorneys. Elliot and his staff of attorneys draft wills and trusts and probate wills throughout the metropolitan New York area.