A recent case from California demonstrates two important guidelines to make sure that your assets go to the people you want after you’re gone. They are:
Everything you do must conform precisely to the required legal formalities.
Here’s the case: California resident James Robert Anderson, an artist and teacher, created his living trust in 2004. The trust included a provision stating that among other requirements, amendments must be done via signed writing.
Anderson was diagnosed with cancer in 2010. His friend Grey Dey moved into his home in 2011 to care for him. With his health in decline, in 2014 Anderson decided to name Dey as a beneficiary of his trust. Anderson contacted a lawyer who directed him to send him the trust, including the portion related to beneficiaries, with his requested changes. Anderson did so. He included with this material a post-it® note requesting that the lawyer turn his revisions into a formal trust amendment. But before he could sign the amendment, Anderson passed away.
His successor trustee, Margaret Pena, turned to the court for clarification. Were the written changes and the post-it® note sufficient? Was the amendment valid, and was Dey a beneficiary? According to the Sacramento County Superior Court court, the answer was no. Despite the evidence that Anderson had intended to change his trust, the court found that the revisions were not signed as required, and the post-it® note did not substitute for a signature. The amendment failed to modify the trust. Dey was not a beneficiary. The court’s ruling was subsequently upheld by the Third District Court of Appeal. You can read the Appeals Court ruling here.
Moral of the story? Don’t wait to do your estate planning. And when you do, make sure every “i” is dotted and “t” is crossed.