Roy and Barbara Massie created a joint revocable trust in 2001, of which they were the co-trustees and primary beneficiaries. The trust named each of their respective children as contingent beneficiaries. The Massies had no joint children. Roy’s son, Rick Massie, and Barbara’s son, John Stamp, were named successor co-trustees. Roy died in 2014, and shortly thereafter Barbara amended the trust. She removed Roy’s children as contingent beneficiaries and nominated her son William Stamp as successor co-trustee instead of Rick. Barbara died in 2021.

In 2022, Roy’s children filed a civil complaint seeking declaratory judgment regarding the trust. The complaint alleged that Barbara had no power unilaterally to amend the trust after Roy’s death, that the trust assets were automatically transferred to a credit shelter trust for her benefit, and that Barbara had no authority to amend the credit shelter trust. The trial court granted summary judgment in favor of Roy’s children, finding that the plain language of the trust created a trust for Barbara upon Roy’s death which precluded Barbara from becoming trustee and that the provision stating that she became the sole trustee upon Roy’s death was a drafting error. Barbara’s children appealed.

The appellate court reversed the trial court’s ruling. The plain language of the trust stated that Barbara would become the sole trustee upon Roy’s death, and the appointment of co-trustees was only triggered upon Roy’s and Barbara’s deaths. The trust granted the trustee discretion to create a credit shelter trust, so Barbara was not compelled to establish such a trust; subsequent mandatory obligations to Roy’s children applied only if the trustee elected to create a credit shelter trust.

Read the Massie v. Stamp court opinion here.

This case shows how important it is to draft estate planning trusts and wills in a way that will address the client’s family dynamics and create clear obligations to achieve their goals. Contact one of our attorneys at Courtney Elder Law Associates for help in creating your plan today.