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Keywords

trust
trustwill

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In re Donald Hyde Trust, 858 N.W.2d 333, 2014 S.D. 99

Facts

Donald Hyde created a revocable trust and executed several codicils, including one that bequeathed stock to his siblings. After his death, disputes arose regarding whether the codicil modified the trust, the repayment of a loan made to his sister, and the validity of property deeds. The Circuit Court found that the codicil did not modify the trust, the loan was to be repaid to Hyde's estate, and the deeds were effectively delivered to his siblings.

Donald Hyde had a will and later created a revocable trust that he funded with real estate and a brokerage account containing stock. Hyde also executed five codicils before and after he created the trust.

Issue

Did the June 5, 2009 codicil modify the trust? Should the trust be reformed to conform to the codicil? Was the loan from Hyde to his sister an asset of the trust?

Wilma does not dispute that the stock was in the trust. Wilma, however, argues that the June 5, 2009 codicil modified the trust, and the siblings are entitled to the stock under the trust as modified by the codicil.

Rule

A trust can only be modified or revoked by a written instrument executed by the settlor, and clear and convincing evidence of the settlor's intent is required to modify a trust. Additionally, a deed must be delivered unconditionally to be effective.

SDCL 55–1–14 provides that '[a]n interest in an existing trust can be transferred only by operation of law or by a written instrument subscribed by the person making the transfer or by his agent.'

Analysis

The court analyzed the evidence surrounding Hyde's intent and concluded that the codicil did not clearly express an intention to modify the trust. The court also found that the loan to Wilma was not an asset of the trust and that the delivery of the deeds was valid based on the presumption of delivery when the deeds were executed and acknowledged.

The circuit court entered a number of findings regarding Hyde's intent. The court noted that the June 5, 2009 codicil used the testamentary term 'will,' and the codicil contained no language purporting to modify the trust.

Conclusion

The Supreme Court affirmed the Circuit Court's rulings, concluding that the codicil did not modify the trust, the loan was to be repaid to Hyde's estate, and the deeds were effectively delivered.

We conclude that the circuit court did not err in concluding that the codicil did not modify the trust.

Who won?

Baptist Children's Home and Shepherd's Ministries prevailed in the case as the court upheld the validity of the trust and the delivery of the deeds, rejecting the claims of Hyde's siblings.

Baptist Children's Home and Shepherd's Ministries prevailed in the case as the court upheld the validity of the trust and the delivery of the deeds, rejecting the claims of Hyde's siblings.

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