A client presented us with an unsigned Trust instrument leaving the entire estate worth more than five million dollars in stock and real estate to him.  The client was the settlor's brother and the only surviving heir at law.  A prior signed trust left the trust estate to a nephew of the settlor.  The settlor had also made handwritten notes on a separate piece of paper regarding his intentions to modify the trust and change his will.  These notes, written when the settlor was about 94 years old, were somewhat cryptic and raised a question as to whether such notes were signed.  Upon a careful reading, the handwritten notes appeared to support an argument that the Settlor had amended the trust and had disinherited the nephew.  The notes also expressed the Settlor's desire to name his brother the trustee of the trust.  None of the Settlor's stock had been retitled to the trust, nor had the Settlor ever transferred his real property to the Trust.  In furtherance of the Settlor's desire to make the changes to his will and Trust, the Settlor had visited his estate planning attorney.  The estate planning attorney drafted the new Trust and will for the Settlor.  However, the attorney mailed the revised documents to the Settlor with a vague letter about executing the documents.  The Settlor received the revised documents in the mail.  However, prior to his death, the Settlor never signed the Trust.  A witness who was close to the Settlor and worked for him as a caretaker testified that the Settlor's intention was to leave his estate to his brother.

Probate Code Section 15402 makes procedures for modification the same as those for revocation, which are spelled out in Probate Code Section 15401.  Any method of modification provided in the trust instrument will of course be effective.  We argued that the handwritten notes were an amendment and expresses an intent to modify paragraphs of the older Trust. The notes simply stated to delete the prior named beneficiaries of the trust and to delete the prior named trustees.  The notes stated to add our client as the trustee.  The Settlor wrote his name and circled it at the top of the notes and the entire document was in the Settlor's handwriting.

We also argued that the revised trust drafted by the attorney was evidence of the intent to amend the trust. We argued that the unsigned revised Trust was admissible extrinsic evidence to further explain the handwritten amendments. Estate of Russell,(1968) 69 Cal.2d 200, 206-209; Burch v. George, (1984) 7 Cal.4th 246.

Regarding the question of whether the notes were signed, we relied on the California Uniform Commercial Code which defines the term "signed" as including "any symbol executed or adopted by a party with present intention to authenticate a writing." (Cal. U. Com. Code, § 1201, subd. (38).)  The comment regarding the corresponding provision of the Uniform Commercial Code states: "The inclusion of authentication in the definition of 'signed' is to make clear that as the term is used in [the code] a complete signature is not necessary. Authentication may be printed, stamped, or written; it may be by initials or by thumbprint. It may be on any part of the document and in appropriate cases may be found in a billhead or letterhead. No catalog of possible authentications can be complete and the court must use common sense and commercial experience in passing upon these matters. The question always is whether the symbol was executed or adopted by the party with present intention to authenticate the writing." (U. Com. Code com., reprinted at 23A West's Ann. Cal. U. Com. Code (1964 ed.) foll. § 1201, p. 65; Rest.2d Contracts, § 134.) 

The UCC supported our position that the notes met the requirements of an amendment to the trust. The notes were in writing and signed by the Settlor who was, in fact, serving as Trustee at the time he wrote the notes, and he was competent at the time he signed.

We also took the position, although perhaps less persuasively, that the Settlor had created an oral trust.  A trust funded with personal property may be created orally on "clear and convincing evidence." (Prob. Code §15207).

Probate Code Section 15207 (Oral Trust of Personal Property) provides:

(a) The existence and terms of an oral trust of personal property may be established only by clear and convincing evidence.

(b) The oral declaration of the settlor, standing alone, is not sufficient evidence of the creation of a trust of personal property.

(c) In the case of an oral trust, a reference in this division or elsewhere to a trust instrument or declaration means the terms of the trust as established pursuant to subdivision (a).

We argued that the unsigned trust is clear and convincing evidence of the existence of the terms of a trust of personal property.  The personal property had not been funded to the trust.  Nevertheless, the notes written by the Settlor expressed his intent in writing to fund the trust with his stock.

Ultimately, the parties reached a settlement prior to trial.

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