In Bruner v. Bruner, Case No. SJC-10653 (Jan. 27,
2011), the Supreme Judicial Court approved the reformation of a
trust to conform with the settlor's intent.
The trust instrument provides that its assets are to be divided
between two subtrusts: the "marital trust" for the
benefit of the settlor's surviving spouse, and the "family
trust" for the benefit of the remaining named beneficiaries
and their issue. Unfortunately, because of a decline in the value
of the assets since the settlor's death, there would have been
nothing left for the family trust after the marital trust was
funded pursuant to the formula in the trust instrument.
The trustees sought to reform the trust to allow the family trust
to be funded first, with the remaining assets allocated to the
marital trust. The trustees argued that this modification would be
consistent with the settlor's intent to fund the family trust
and to minimize the eventual taxes on her surviving spouse's
estate by reducing the assets allocated to the marital trust. With
the assent of all parties and a guardian ad litem, the Court
ordered the requested reformation.
Interestingly, after oral argument, the Court asked the trustees to
supplement the record with affidavits from the attorney who drafted
the trust instrument and from the surviving spouse. These
affidavits provided the Court with information regarding the
settlor's estate planning goals that was missing from the
record. The Court reminded parties in future cases to furnish
"a full and proper record and the requisite degree of proof
that they are entitled to the relief they seek."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
