Revocation of a Disclaimer - Vermont

Disclaimer may be revoked if procured by undue influence. The testator’s mother and sole beneficiary under his will sought to revoke her disclaimer of all her interest in her son’s estate. The disclaimed property passed to the disclaimant’s nephew who was the contingent beneficiary of the will and the executor. The disclaimant then filed a document with the court purporting to revoke the disclaimer. The nephew objected and won summary judgment.

The Supreme Court of Vermont reversed, holding that a disclaimer cannot be revoked because it was based on a mistake of law or because the revocation is filed within the period for making a disclaimer, but that it may be revoked if it was procured through the exercise of undue influence. Carvalho v. Estate of Carvalho, 978 A.2d 455 (Vt. 2009).

Enforceability of in terrrorem clause in trust -- Virginia

The Supreme Court of Virginia held that a no-contest provision in a revocable trust “that constitutes part of a decedent’s testamentary estate plan” is subject to the same principles applied to such clauses in wills, in particular the principle that such clauses are to be strictly construed. Keener v. Keener, 682 S.E.2d 545 (Va. 2009).

Vermont Adopts Uniform Trust Code

New law in Vermont adopts the Uniform Trust Code. 2009 Vt. Laws No. 20. The state legislature's website provides a detailed summary of the act, including the following excerpt: This act modernizes and codifies the laws governing testamentary and inter vivos trusts. The act adopts the Uniform Trust Code in large measure, drawing from common law sources as well as existing statutory law, but has been modified in part to reflect current Vermont legal principles. The act provides a set of basic default rules that govern voluntary trusts. However, because the act is a set of default rules, the terms of a trust instrument will govern even if the terms are inconsistent with the act.

Settlor’s Attempt to Relieve Trustee’s Duty to Account Deemed Ineffective

Maryland Case: A husband and his wife jointly created a revocable trust. The husband died first and under the trust terms, one-half of the property was divided into two trusts. The surviving spouse had a general power of appointment over one and a special power of appointment over the other, was sole income beneficiary during her life, and had the discretion as the trustee to distribute up to the entire principal for her health, maintenance, or support. A son of her husband is a taker in default of the exercise of either power if he survives the surviving spouse. The trust also contains language purporting to prevent the trustee being required judicially to account. The court affirmed the lower court’s order requiring the trustee to account. The court held that the son had a future interest in the trust which entitled him to demand an accounting and that the language eliminating the duty to account was of no effect.
Johnson v. Johnson, No. 126, 2009 WL 608342 (Md. Ct. Spec. App. 2009).