News & Thought Leadership from Sulloway & Hollis

June 26, 2022

Guidance for Practitioners: Trust Amendments Post-Omega

Revocable trusts often permit settlors to effect post-signing alterations without having to observe the traditional formalities associated with Will execution.  A typical provision included in a revocable trust agreement reserves to the settlor the right to amend or revoke the trust by delivering a signed writing to the trustee.  However, the New Hampshire Supreme Court’s recent decision in In re Omega Trust, Docket No. 2021-0138 (N.H. 2022), cautions practitioners that reliance on garden-variety amendment and revocation provisions may invite downstream litigation.

In the Omega case, the Supreme Court assessed whether a string of emails, in which the settlor and the drafting attorney discussed proposed alterations to the settlor’s revocable trust, might suffice to amend the trust despite the presence of trust language contemplating the delivery of a signed writing to the trustee.  The Court first considered the effect of RSA 564-B:602, which governs the amendment and revocation of New Hampshire revocable trusts.  Paragraph (c) of this statute provides that the settlor may revoke or amend a revocable trust:

  1. by substantial compliance with a method provided in the terms of the trust; or
  2. by any other method manifesting clear and convincing evidence of the settlor’s intent if the terms of the trust do not provide a method or do not expressly prohibit methods other than methods provided in the terms of the trust.

Because the terms of the Omega trust did not indicate the delivery of a signed writing to the trustee constituted the exclusive method of amendment, the Court concluded that any method “manifesting clear and convincing evidence” would suffice.  The Court then remanded the case to the trial court, in order for the trial court to determine whether the string of emails did or did not satisfy the “clear and convincing” standard.

In the wake of the Omega decision, practitioners should consider incorporating language into their trust agreements to ensure that the client’s preferred method of amendment and/or revocation constitutes the only and exclusive method by which his or her trust can be amended and/or revoked.  Failure to specify an exclusive method of amendment may result in downstream litigation if the client later attempts to alter his or her trust provisions in a manner not wholly consonant with the trust-prescribed procedure.  It remains uncertain, post-Omega, what efforts on the part of the settlor might constitute “substantial compliance” with the trust-prescribed method (even if such method is made exclusive by the terms of the trust).  This uncertainty similarly poses a risk of downstream litigation.  As a result, practitioners should also consider whether opting out of the rule provided in RSA 564-B:602(c)(1) might serve the client’s best interest.