Court Opinion

ID: 5666447
Source: CourtListenerOpinion
Date Created: 2022-01-12 03:56:53.929251+00
Date Added: 2024-06-11T08:39:19.569866
License: Public Domain

DETJEN, J., Dissenting.—I respectfully dissent.
The majority holds that under Probate Code section 15402, if a trust instrument states any method for modification of a trust, that method is the exclusive method by which the trust may be amended.1 Because I conclude that section 15402 permits modification by the method established in section 15401, subdivision (a)(2), unless that method is explicitly excluded by the terms of the trust, I respectfully disagree with the majority.
If there had been a statute governing modification of trusts in existence prior to the 1987 revision of the Probate Code, an interpretation such as the majority’s interpretation of section 15402 would have some support in case law. (See Rosenauer v. Title Ins. & Trust Co. (1973) 30 Cal.App.3d 300, 301, 304 [106 Cal.Rptr. 321]; see also Hibernia Bk. v. Wells Fargo Bank (1977) 66 *1195Cal.App.3d 399, 404 [136 Cal.Rptr. 60] ,)2 Sections 15401 and 15402 were not enacted, however, to reflect that case law. They were enacted in response to a perceived need to move away from such a restrictive interpretation.
In 1985, the California Law Revision Commission (Commission) looked toward submitting a number of recommendations to the Legislature regarding the law of probate. (See Ann. Rep. (Mar. 1985) 18 Cal. Law Revision Com. Rep. (1986) p. 3.) During 1986, the Commission devoted its further attention to the preparation of a new Probate Code for introduction at the 1987 legislative session. (See Ann. Rep. (Dec. 1985) 18 Cal. Law Revision Com. Rep., supra, at p. 203.) In the area of modification and revocation of trusts, the proposed law (enacted in § 15401) retained the rule that “a trust [was] revocable unless it [was] made irrevocable by the trust instrument,” and made “clear that a revocable trust may be revoked in the manner provided by statute . . . , unless a manner specified in the trust [was] made exclusive.” (Selected 1986 Trust and Probate Legislation (Sept. 1986) 18 Cal. Law Revision Com. Rep., supra, at p. 1213.) The Commission wanted the trust to be a “flexible mechanism.” (Id. at p. 1268.) “Even the [trust] drafter’s best efforts may not provide the appropriate degree of flexibility, and some persons who draft trust instruments do not have the expertise needed to fashion an instrument that responds to the changing needs, values, and circumstances of the settlor and the beneficiaries. . . . Restrictive features of a trust may come to be viewed as too restraining in the face of the interest in free alienability of property.” (Ibid., fn. omitted.)
The Commission recognized the prior case law that “where the trust instrument prescribes a method of revocation, the prescribed procedure must be followed rather than the statutory method.” (Selected 1986 Trust and Probate Legislation (Sept. 1986) 18 Cal. Law Revision Com. Rep., supra, at p. 1270.) The Commission balanced two competing interests: “This rule has been defended on the grounds that the settlor may wish to establish a more complicated manner of revocation than that provided by statute where there is a concern about ‘future senility or future undue influence while in a weakened condition.’ [Fn. omitted.] On the other hand, the case-law rule may be criticized as defeating the clear intention of the settlor who attempts to revoke a revocable trust by the statutory method, in circumstances that do not involve undue influence or a lack of capacity. In fact, the settlor may have forgotten about the method provided in the trust, or may not be aware of the case-law rule.” (Id. at pp. 1270-1271.)
*1196To allow a settlor the power to “establish a more protective revocation scheme, but also honor[] the settlor’s intention where the intent to make the scheme exclusive is not expressed in the trust instrument,” the Commission adopted “a compromise position . . . [making] available the statutory method of revoking by delivery of a written instrument to the trustee during the settlor’s lifetime except where the trust instrument explicitly makes exclusive the method of revocation specified in the trust.” (Selected 1986 Trust and Probate Legislation (Sept. 1986) 18 Cal. Law Revision Com. Rep., supra, at p. 1271.) Thus, the 1987 adoption of section 15401 in the terms proposed by the Commission reflected a clear legislative choice to change the existing law in favor of permitting greater flexibility for the settlor, and rejecting the rule that the majority here asserts, which would designate a method of modification as exclusive simply because it has been set forth in the trust instrument.
As previously noted, prior to 1987, modification of a trust was viewed as merely one aspect of the more inclusive power to revoke a trust. (See Huscher, supra, 121 Cal.App.4th at p. 962, fn. 5.) In recommending the 1987 revisions to the law of trusts, however, the Commission set forth explicitly the nature of the implied power of modification: “Under general principles the settlor, or other person holding the power to revoke, may modify as well as terminate a revocable trust. [Fn. omitted.] The proposed law codifies this rule and also makes clear that the method of modification is the same as the method of termination, barring a contrary provision in the trust.” (Selected 1986 Trust and Probate Legislation (Sept. 1986) 18 Cal. Law Revision Com. Rep., supra, at p. 1271.)
In summary, section 15401 was written specifically to change the restrictive rule adopted in Rosenauer v. Title Ins. & Trust Co., supra, 30 Cal.App.3d at page 304. (Cal. Law. Revision Com. com., 54 West’s Ann. Prob. Code (1991 ed.) foil. § 15401, p. 571.) And section 15402 was added, not to establish a different rule from section 15401, as the majority asserts (maj. opn., ante, at pp. 1192-1193), but in order to adopt the same flexible rule for modifications as for revocations unless “bar[red]” by “a contrary provision in the trust” (Selected 1986 Trust and Probate Legislation (Sept. 1986) 18 Cal. Law Revision Com. Rep., supra, at p. 1271) or, in the language of statute, “[u]nless the trust instrument provides otherwise” (§ 15402). Section 15401 replaced Civil Code former section 2280. Section 15402 did not replace another statute, since the power to modify was only an implied power not found in a separate statute prior to the 1987 revisions. Nothing in the Commission’s comments on sections 15401 and 15402 supports the position that, even though Rosenauer v. Title Ins. & Trust Co., supra, 30 Cal.App.3d at page 304, should not apply to revocations (§ 15401), it should, as the majority asserts, apply to modifications under section 15402.
*1197The Huscher court reached this same conclusion and rejected the conclusion reached by the majority in the present case. (See Huscher, supra, 121 Cal.App.4th at p. 967.) As the majority notes, the Huscher court was examining a trust instrument that was signed in 1983, when Civil Code former section 2280 was in effect. (Huscher, supra, 121 Cal.App.4th at p. 959.) In its analysis on the issue of the law of trust modifications, however, Huscher examined both Civil Code former section 2280 and the current law, Probate Code, section 15402. (See Huscher, supra, 121 Cal.App.4th at pp. 960-963.) Huscher reviewed the decision in Conservatorship of Irvine (1995) 40 Cal.App.4th 1334, 1344-1345 [47 Cal.Rptr.2d 587] (Irvine), a case that did apply section 15402. The position taken by the majority in the present case was one of the propositions offered by Irvine3 Huscher did not, however, conclude that such a proposition was consistent with the language of section 15402. Instead, Huscher specifically stated, in reference to section 15402, “Under the current law, the statutory procedure for modifying a trust can be used unless the trust provides a modification procedure and explicitly makes that method exclusive . . . .” (Huscher, supra, 121 Cal.App.4th at p. 967.)
The trust instrument in Huscher provided that the trustor “ ‘may at any time amend any of the terms of [the] trust by an instrument in writing signed by the Trustor and the Trustee.’ ” (Huscher, supra, 121 Cal.App.4th at p. 972.) The Huscher court found that this provision did not provide explicit exclusivity, that is, the language did not expressly preclude the settlor from using alternate statutory methods to modify the trust instrument. (Ibid.)3 4 The modification provision in the present case is similarly nonexclusive.5
In Masry v. Masry (2008) 166 Cal.App.4th 738 [82 Cal.Rptr.3d 915] (Masry), the court addressed a trust revocation that was executed in compliance with section 15401, subdivision (a)(2), but not in compliance with the method provided in the trust instrument. The Masry court cited to the point made in Huscher that “ ‘a modification method is explicitly exclusive when the trust instrument directly and unambiguously states that the procedure is the exclusive one’ ” and concluded that such reasoning applied to revocation. *1198(Masry, supra, 166 Cal.App.4th at p. 742.) The Masry court found no explicit exclusivity in the following trust provision: “ ‘Each of the Trustors hereby reserves the right and power to revoke this Trust, in whole or in part, from time to time during their joint lifetimes, by written direction delivered to the other Trustor and to the Trustee.’ ” (Id. at p. 740.)
Just as in Huscher and Masry, the amendment language used here in article “FOURTH” of the trust instrument did not explicitly exclude use of the alternative statutory method for modification or revision. I am, therefore, of the opinion that Zoel Night Lynch was permitted to “modify the trust by the procedure for revocation” (§ 15402) in accordance with section 15401, subdivision (a)(2) and that the fourth, fifth, and sixth amendments to the trust instrument were validly executed and effective in modifying the trust instrument in accordance with the terms of the amendments.
Appellant’s petition for rehearing by the Supreme Court was denied June 27, 2012, S202671.

 All further statutory references are to the Probate Code unless otherwise noted.

 “Not until Probate Code sections 15401 and 15402 were enacted did the Legislature provide a statutory procedure for modifying a trust. Even so, cases interpreting [Civil Code former] section 2280 recognized that the right to revoke included an implied right to modify. Accordingly, cases concerning trust revocation procedures apply with equal force in the trust modification context. [Citation.]” (Huscher v. Wells Fargo Bank (2004) 121 Cal.App.4th 956, 962, fn. 5 [18 Cal.Rptr.3d 27] (Huscher).)

 “Irvine . . . [offered] a farrago of seemingly inconsistent propositions: ... (2) if a trust instrument provides a method of revocation or modification, that method thereby becomes exclusive . . . .” (Huscher, supra, 121 Cal.App.4th at pp. 966-967.)

 It similarly found the language was not implicitly exclusive, an issue that existed under Civil Code former section 2280 but that does not exist under the Huscher court’s interpretation of section 15402. (See Huscher, supra, 121 Cal.App.4th at pp. 968, 972.)

 The language in this trust is: “[T]his Trust may be amended, in whole or in part, with respect to jointly owned property by an instrument in writing signed by both Settlors and delivered to the Trustee, and with respect to separately owned property by an instrument in writing signed by the Settlor who contributed that property to the Trust, delivered to the Trustee.”