Settlor Intent | Or Is It the Draftsman’s Intent?
Settlor intent is sometimes referred to as the polestar of trust law. After all, in principle the maker of a trust should have the last word about who will be beneficiaries of their trust and what exactly they’ll inherit.
On the other hand, settlor intent is not an absolute. Anyone can make wild or outrageous requests in their will, but that doesn’t mean they’ll be fulfilled. A settlor’s final wishes must correspond to the law, and that, of course, includes California trust law. Limitations on settlor intent have long applied.
Among them: prohibitions against illegal acts; capricious purposes; and acts against public policy. Some scholars have opined that the maker of a trust, a settlor, could burn his own Rembrandt, but he can’t convey a Rembrandt to a trust and direct the trustee to destroy it.
Evolving court-made and statutory rules are trending toward the relaxation of rules for modifying trusts.
Reasons for this include: trust terms are getting longer; trusts are now fully enmeshed as part of middle-class estate planning and are no longer the province of only the wealthy; trusts often last for the lifetime of the beneficiaries; estate and income tax laws regularly change and impact the administration and purposes of trusts; clients often don’t read trust instruments; and trusts can often reflect the draftsman’s intent more than the settlor’s original intent.
The last two points bring several cases to mind that we’ve seen up close over the last several years. Let’s start with “Clients often don’t read trust instruments.” We’ve had cases where the trust maker couldn’t speak or read English yet signed a trust written in English. We’ve had cases there the trust maker was illiterate, and the drafting attorney was oblivious to the fact. Of course, death bed trust change cases nearly always raise the question of whether the death bed trust or trust amendment were ever read.
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