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Trust Reformation, Mistake

Reformation is usually used in the context of a contract between two parties to correct a mistake and reform the contract to meet the parties’ intentions. It is, in other words, a court ordering a quasi re-writing, amendment and/or modification of a contract or written instrument. By way of example, reformation of a contract based upon mutual mistake is characterized by a (1) preexisting agreement between the parties affected by the proposed reformation that is consistent with the change sought, (2) a mistake in that the contract prepared was different than what was agreed upon, and (3) the mistake was mutual (i.e., common to both parties). Morris v. Brown, 941 S.W.2d 835, 839 (Mo. Ct. App. 1997).

The Missouri Uniform Trust Code permits reformation in the context of trusts. Section 456.4-415, RSMo provides:

“The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.”

As of this writing, little to no cases exist in Missouri interpreting and/or applying this statute to a trust. Therefore, there is little precedent for courts to rely upon in determining whether a reformation under this statute is appropriate. Given the broad language of the statute, an attorney may be able to make a convincing argument that it can apply in a broad number of situations. Contact with questions.