Trust Reformation Was Not A Remedy For Failing To Complete An Estate Plan

With several recent cases in which Massachusetts courts have permitted trust modification, we might have started to think that trusts would be liberally reformed in Massachusetts. The Appeals Court of Massachusetts’ decision in Lesanto v. Lesanto(Rule 1:28 decision), however, reminds us that certain requirements must be met to reform a trust.

In October 2005, Paul Lesanto executed a will and the Paul Lesanto 2005 Revocable Trust (“First 2005 Trust”). The bulk of Lesanto’s estate would pour over into the First 2005 Trust. In 2010, however, Lesanto executed a new trust document that retained the name “The Paul Lesanto 2005 Revocable Trust” (“Second 2005 Trust”), but specifically provided that “[t]he Grantor wishes to establish a Trust which may receive property which the Grantor may transfer to it. The Grantor hereby revokes all prior Trusts.” (Emphasis in original.) The Second 2005 Trust had different terms than the First 2005 Trust. A new will was also drafted for Lesanto, which he never executed.

According to Massachusetts law then in effect (since repealed), the residue of Lesanto’s estate could not pour over to a trust created after the will. A judge of the Probate and Family Court construed the Second 2005 Trust to be an amendment of the First 2005 Trust in order to effectuate Lesanto’s estate plan and considered the “revocation” language in the Second 2005 Trust to be a drafting error. The appellate court reversed.

In Massachusetts, equity will reform a trust on full, clear, and decisive proof that it does not reflect the settlor’s intent due to a scrivener’s error. Here, however, there was no mistake. The estate plan did not effectuate Lesanto’s intentions because Lesanto died before executing a new will that would pour over into a second trust, not because of any scrivener’s or drafting error in the trust itself. As the court put it, “[r]eformation of a trust instrument is not a remedy for failing to complete an estate plan, and specifically, for failing to execute a will.” Because Lesanto did not execute a new will before he died, the pour-over provisions of his first will lapsed and the residue of Lesanto’s estate should be distributed per the laws of intestacy.