Handwritten Amendments Don't Work

Earlier this year, we received a call from someone who wanted us to confirm that her father's living trust amendment was valid and enforceable. She said her dad crossed out the names of some beneficiaries and wrote new instructions in the margins of his existing trust document. She wanted us to review it and send a letter to the removed beneficiaries explaining that they had been disinherited. She also wanted to hire us to defend against any court challenges to the amendment.

The California Law on How to Amend a Trust

California law states that a trust may be modified by the method specified in the trust, or, if no method is specified, by a written document signed by the grantor and delivered to the trustee.

Pena v. Dey

In 2019, in Pena v. Dey, the California Third District Court in Sacramento ruled that interlineations (crossing out words) on a living trust amendment that was not signed is not a valid amendment.

In 2004, James Anderson created a living trust and named himself trustee. His living trust stated that he could amend it with a writing signed by him and delivered to the trustee.

In 2008, Anderson amended his trust by following the trust's requirements: he signed a writing and delivered it to the trustee (himself). This First Amendment added paragraph 5.5, which named 15 beneficiaries and their percentage shares of the trust estate.

In 2014, Anderson decided to amend his trust again to remove some beneficiaries from the First Amendment and to add his friend, Grey Dey, as a beneficiary. He expressed his intent by writing on the First Amendment.

On paragraph 5.5 of the First Amendment, he used his pen to cross out the names of 11 of the beneficiaries he wanted to remove, and he wrote in the margin that Dey was to be added as a beneficiary. He then mailed the edited First Amendment to his attorney.

Shortly after receiving the document, the attorney called Anderson to confirm the terms of what would be the Second Amendment. Anderson was in bad health and was admitted to the hospital the same day as the attorney phone call. He died soon after. The attorney never had a chance to confirm the terms of the Second Amendment.

The California District Court ruled that Anderson's handwritten notes and interlineations on the First Amendment were not a valid amendment to his trust. Anderson's trust stated that any amendment must be signed. The court explained that the written notations and interlineations could have been a valid amendment if Anderson had signed the document. But he didn't; therefore, his attempted amendment did not fulfill his trust's amendment requirements. As a result, the terms of the First Amendment, not the attempted Second Amendment, would be enforceable in the trust administration. Dey would not be a beneficiary, and the 11 crossed-out beneficiaries would remain as beneficiaries.

Formalities Are Important

Over the course of my 25 years as an estate planning attorney, I've been asked by many clients why they can't simply handwrite changes to their living trust. My first response is that the law does not allow it. Amendments can only be made according to the terms of the trust, or if the trust does not describe a protocol for amendments, then by the default California law, which requires a signed writing delivered to the trustee. 

The reason for these formalities is to ensure certainty and avoid fraud. Think about it. Your estate plan is a big deal. Your living trust is your legally enforceable final statement on how you want to distribute the assets you've worked your whole life to earn and build. It shouldn't be a breezy and spur-of-the-moment act to amend your estate plan. There is too much at stake.

The formal process ensures thoughtful intent. After all, this is your estate, and it is your last statement to your family and loved ones. 

The formal process also protects against fraud.

Amendments Should Be Trustworthy

Handwritten notes and cross-outs without a signature can be made by anyone. If the formalities were not upheld, a judge would have a difficult time determining intent.

Keep in mind that even with the required formalities, parties still sue each other.

If simple scribbles and cross-outs were sufficient to amend a living trust, whose to say who altered the document? And you better believe the crossed-out beneficiaries will not be happy and will petition the probate court to secure their share of the estate. Even the Agatha Christie and John Grisham novels with estate planning plot twists include a formal attorney drafted and signed amendment.

The Rest of the Story

Let's go back to the phone call described above, where the woman wanted us to confirm the validity of her deceased father's handwritten changes to his trust. After further questioning, she told us that her father's original living trust left his trust estate to his three children. However, right before he died, he crossed out her siblings and wrote in the margin that all was to go to her. Good result for her. Bad result for her brother and sister. 

Did he make the cross-outs and scribbles or did she?

We did not take the case and recommended she find a trust litigator.

Recommended Approach

The safest and most effective way to amend a trust is to:

• Create a formal written amendment or restatement
• Sign and notarize it
• Keep the amendment with the original trust documents
   

This formal approach provides clear evidence of intent and helps prevent future legal disputes among your living trust beneficiaries and trustees.