Reformation is a legal theory used to correct mistakes in a legal document. More technically, it is an “extraordinary equitable remedy and should be granted with great caution and only in clear cases of fraud or mistake.” Morris v. Brown, 941 S.W.2d 835, 840 (Mo. Ct. App. 1997). For example, in cases of mistake, the mistake…
Legal Articles
Trust Language: “Necessary or Advisable” Distributions
The language of a trust is extremely important. And when a will, trust, and other estate documents form part of the same plan, they are interpreted together. Indeed, “[w]hen a trust and will form parts of the same plan, they must be construed together.” Shriners Hospital for Children v. Schaper, 215 S.W.3d 185, 189-90 (Mo….
Reliance on Trust Instrument
A trustee who reasonably relies on the language of a trust is not liable for breach of trust if the breach resulted from the reliance. Section 456.10-1006, RSMo. A court may, for example, modify, reform, or construe the trust in a way that it deviates from the plain language of the trust. If this is…
Common Fund Exception
The general rule (i.e., the “American Rule”) is that a party to a lawsuit cannot recover attorney fees. This is true even if the party wins the lawsuit. A narrow exception to this rule is the common fund exception. Under this common fund exception to the American Rule, a litigant may recover attorney fees where…
Undue Influence
An undue influence claim is one of the two most common ways to legally attack a trust, will, or non-probate transfer. There is a “presumption” of undue influence if: (1) the influencer obtains a substantial benefit from the document, (2) the influencer was active in procuring the document, and (3) there was a confidential relationship…
Creditor Claims Against Trust-Maker
During the lifetime of a settlor (i.e., trust-maker), the property of a revocable trust is subject to claims of the settlor’s creditors. Section 456.5-505.1, RSMo. Upon the settlor’s death, most revocable trusts are structured to where the trustee may pay the settlor’s last debts and expenses. Because these expenses can arise down the road and…
Trust Amendments and Modifications
When interpreting trusts, the intent of the settlor when the trust was created governs, and subsequent modifications are effective only in the manner expressed in the trust instrument. Banks v. Central Trust and Inv. Co., 388 S.W.3d 173, 176 (Mo. Ct. App. 2012). Generally, the settlor can modify the trust only in the manner provided…
Standing: Breach of Trust and Trustee Removal
Trust law distinguishes between “qualified beneficiaries” and “beneficiaries.” A “beneficiary” is a person that has a present or future beneficial interest in a trust or holds a power of appointment over trust property. Section 456.1-103(3), RSMo. A “qualified beneficiary” is different. It includes a beneficiary who is currently eligible to receive trust distributions, as well…
Disinheritance Clauses in Wills/Trusts
“No contest” (or in terrorem) clauses are increasingly relevant in probate, trust, estate and will litigation. The classic no contest clause provides that if a person contests the validity of a will or trust, he or she is disinherited and receives nothing by way of inheritance. The obvious purpose of the clause is to reduce…
Trust/Will Disclaimers
A disclaimer is when an individually legally relinquishes or waives his/her right to receive inheritance. Although it is relatively rare to see, sometimes it occurs for tax or estate planning reasons. In other situations, it is to try to shield assets from a creditor. There is a specific statute discussing how a disclaimer is to…