A trust should reflect your wishes for how your property will pass to your beneficiaries. But a mistake in drafting or expressing your wishes can cause the final document to say something you never intended. In some situations, a court can reform the trust to correct that mistake rather than let an error determine how your assets pass.
Here are three situations that can support trust reformation.
The trust contains an incorrectly stated term
A court may reform a trust when a mistake causes it to state a term that does not reflect what you intended. For example, a drafting error could identify the wrong beneficiary or state an incorrect distribution.
The issue centers on what you intended when you created the trust, not whether someone later disagrees with the result. California courts recognize reformation as a way to correct a mistake in the trustor’s expression of intent and restore the intended terms.
There is an omission of intended provision
A mistaken omission can also support reformation when a provision you intended to include does not appear in the final trust. An important instruction could have been left out during drafting even though you intended that instruction to govern how your property would pass.
The court’s role in this situation involves correcting the omission so the document reflects the plan you actually intended, rather than treating the missing provision as a deliberate choice.
Unclear wording results from a mistake in expressing intent
Unclear language alone does not automatically justify reforming a trust. However, reformation may apply when confusing or seemingly clear wording resulted from a mistake and does not accurately express your actual intent.
In Packard v. Packard, a California appellate court held that a trust could potentially undergo reformation even though the disputed language appeared unambiguous. The court explained that the key question involved whether a mistake caused the trust to express something different from the trustor’s actual intent.
Make sure your trust that reflects your wishes
If you believe a mistake caused your trust to state or omit terms you did not intend, reviewing the document with an attorney can help you determine whether reformation may apply. Addressing the issue through the appropriate legal process can help prevent an unintended mistake from controlling the distribution of your property. Resolving the issue early can also help reduce confusion and potential disputes for your beneficiaries and trustee later.
