Brief Fact Summary. Sidney M. Pond created a trust with his wife that provided income to him and his wife for their lives. However, the trust failed to make a provision for his wife if he predeceased her. The wife petitioned the court to reform the trust to conform to her husband’s intent to provide for her and have the trust qualify for a surviving spouse marital deduction under federal estate tax laws.
Synopsis of Rule of Law. A trust instrument may be reformed where the instrument fails to embody the settlor’s intent because of scrivener’s error. There must be clear and decisive proof of the error.
To ascertain the settlor's intent, we look to the trust instrument as a whole and the circumstances known to the settlor on execution.View Full Point of Law
Issue. Whether there is clear and decisive proof of mistake due to scrivener’s error in a trust that does not include a provision for the settlor’s wife upon her death?
Held. There is clear and decisive proof of a scrivener’s error because the trust terms suggest the settlor intended to provide for his wife through his trust in the event of his death. The settlor and his wife had transferred almost all of their assets into the trust. During their lifetime, the trust was payable to the settlor and his wife. The settlor most likely intended for the same arrangement to exist if he died before his wife. In addition, because the trust grants the wife the power to elect to take the marital deduction, the trust may also be reformed to correct the ambiguity in the termination provisions so that the trust may qualify for the marital deduction.
Discussion. There was clear and decisive proof that the writer made a mistake in making the will because the settlor stated his intention that the trust qualify for a marital deduction.
Wills, Trusts & Estates Keyed to Dobris, Sterk & Leslie’s Second Edition.