When A Trust is Ambiguous

Q. I have been married to my second husband, Tony, for 10 years. We have two children together and three from both of our previous marriages. I am very close with my mother-in-law, Isabella who recently moved in with us and helps with the children. She is very grateful that she and I have such a good relationship, since she often butted heads about everything with my husband’s first wife.

Similar to many of us, COVID-19 had Isabella thinking seriously about her mortality and planning for her future and for her loved ones. Isabella likes to save money wherever she can, so she found an online service to do her Will and Revocable Living Trust. She showed the template to me and my husband, proud of taking the initiative and completing what she said was a very easy online form. Luckily, she did not press “submit!”

My husband and I are concerned. The trust she plans on doing herself online seems very generic and it mentions my husband, his spouse and his children, but no names, so its vague whether that spouse is me or his ex-wife and if the children are our children or his children from his previous marriage, or all of the children. I could foresee lots of problems in the future with her generic documents. Since I am the one who is currently married to my husband, if she decides to do this, do you think that it will be a given that it’s me she is talking about and not his ex-wife, and our children too? What should I suggest for her to do to make things clearer and less ambiguous? Thanks so much!

A. Thank you for your question. It’s true that using a do-it-yourself (DIY) site to draft a will can save money and time. But you’re correct in your concern that sometimes doing it this way could lead to expensive and unpleasant estate planning mistakes down the road, especially when the document is as vague as the one you described.

A Situation Similar to Yours Caused a Recent Court Battle

Recently, there was a case in Texas that was similar to your situation in a lot of ways. In Ochse v. Ochse, Amanda H. Ochse created a trust in 2008 that provided that the trustee was authorized to make distributions to her son, William, and the son’s spouse (unnamed in the document).  At the time of the trust’s execution, the son was married to his first wife, Cynthia, but he later divorced and married his second wife, Carol.

The son’s children from his first marriage sued the son for breaching fiduciary duties as trustee because he was not providing any trust funds to Cynthia, his spouse at the time the trust was created, and therefore, they felt that he should be removed as trustee. The first wife argued that the terms “primary beneficiary’s spouse” as well as “son’s spouse” referred to the first wife because she was the son’s spouse at the time that the trust was executed.

The second wife and son of course argued that the use of the word “spouse” in trust documents did not mean the first spouse, but rather referred to whoever was currently married to the son.

The trial court ruled the second wife was the correct beneficiary at the time of the suit, and the first wife appealed. The appeals court found that no evidence exists that the term “spouse” was utilized to define an individual uncertain at the time of the gift. As a result, the court held that the grantor’s use of the word “spouse” referred to William’s spouse at the time the trust was executed and did not refer to a potential future spouse. Consequently, the court reversed the case in favor of the first wife, Cynthia, and her children. The court determined that in this case the term “spouse” should be interpreted to mean the individual to whom William was married at the time the trust was signed.

This case is an example of why it is of the utmost importance that in your situation, and any situation for that matter, that estate planning documents are drafted by an experienced estate planning attorney, such as those at the Farr Law Firm, who will pay careful attention to all the terminology in your documents, and ensure that no ambiguity exists.

Why Some People Prefer Online DIY Estate Planning Documents, and Why They Shouldn’t Use Them

We are uncertain whether an online DIY legal document site was used or not in the drafting of Amanda Ochse’s documents, as described above, but it sounds like a similar situation could happen if your mother-in-law uses the online form you described. We’re hoping to protect your family from any future lawsuits and stress, by suggesting that she stay away from DIY document program and have her estate planning handled by a professional.

With the ease and availability of DIY estate planning programs, and their low price, many erroneously think that they are the best option. But if you decide to do your estate planning by yourself, you’ll never know the results of your work, but your loved ones will.  

The advantages that many people see in using a DIY service is that you will have a plan, as quickly and cheaply as possible, and that may be better than having no plan at all. When filling out online forms, most people think they know what they want and need. But the reality is that many people have no idea what they really need to achieve their goals. For instance, many people incorrectly believe that all power of attorney documents are the same, or that a last last will and testament avoids probate, or that a revocable living trust protects their assets in connection with nursing home expenses. And these are just a few of the most common mistakes that people make on doing their own estate planning. The reality is that DIY estate planning often causes more challenges than working with a team of professionals in the first place, as it is typically much more complicated and expensive to unwind a disaster after the fact then to prevent it in the first place. When you do estate planning, you need an experienced attorney to ensure that you understand what type of estate planning documents are appropriate for your situation to meet your specific goals. And you need an experienced attorney to make sure that the proper language is used in the proper documents.

Unlike many other matters where mistakes might be able to be corrected – by the time estate planning ambiguities or mistakes arise, the person who did the planning has passed on and can’t correct the problem.

If you have a toothache, you could use the pliers in your toolbox to extract your own tooth instead of having an oral surgeon perform the procedure. Of course, just because you can do it doesn’t mean it’s a good idea. Estate Planning is no different.

Ochse vs. Ochse should act as a reminder that it’s critically important to define the terms of a trust (and all other legal documents), which is something experienced estate planners do. With inadequate definitions and ambiguities, trusts can end up being administered in a manner that does not achieve the trust creator’s goals. Please suggest to your mother-in-law that she should contact an experienced Estate Planning Attorney to discuss her estate planning rather than using an online form.

Only Trust an Experienced Estate Planning Attorney for Your Estate Planning Needs

When it comes to estate planning, you don’t want to treat the entirety of what you worked your whole life to accumulate to an online legal factory. Keep in mind that the employees of DIY legal document sites, such as LegalZoom, are not acting as your attorney. DIY legal document sites cannot and do not guarantee that their documents are the documents you need or are appropriate for your specific situation. And all of these sites recommend even if you prepare documents on their site, that you have them reviewed by your own attorney to ensure that they are appropriate for your needs. But what they don’t tell you is that most attorneys are not going to inexpensively review and “rubber stamp” documents prepared online, as the attorney would have to review every single sentence of every single document to determine whether it is truly appropriate for your situation. Such an endeavor would wind up costing you more money, as it is less expensive to you for the attorney to simply prepare their own documents based on their own forms because we attorneys already know what is in our documents and that the language we use will be appropriate for your specific situation. The law is a personal matter, and no general information or generic DIY legal documents can fit every circumstance.

Even if the online documents were perfect, estate planning is about much more than getting the documents right. Sometimes the documents are right and they still don’t work because your financial affairs are not in sync with them. It can get rather complicated, and it takes an experienced Estate Planning and Elder Law attorney, such as those at the Farr Law Firm, to help you plan effectively. We can help you leave your hard-earned money and assets, as well as a sense of your values, to your loved ones.

Get Your Estate Planning in Order, Without Delay

If you haven’t updated your estate plan in the last few years, or done your own estate planning, the time is now. Contact us for a free initial consultation to discuss your estate planning needs. Be sure to ask about the Farr Law Firm’s Lifetime Protection Program, which ensures that your documents are properly reviewed and updated annually, so that they will always reflect your current wishes and be up to date with the ever-changing laws. When you’re ready to do your planning, save yourself the pain and hassle and guesswork of trying do it yourself, and instead give yourself the peace of mind of doing it the right way — you can start the process easily by calling the Farr Law Firm at any time to make an appointment for a no-cost initial consultation:

Fairfax Estate Planning Attorney: 703-691-1888
Fredericksburg Estate Planning Attorney: 540-479-1435
Rockville Estate Planning Attorney: 301-519-8041
DC Estate Planning Attorney: 202-587-2797

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