If the settlor reserves a power to revoke the trust but does not specify any mode of revocation, the power can be exercised in any manner which sufficiently manifests the intention of the settlor to revoke the trust. It may be sufficient that he manifest his decision to revoke the trust by communicating it to the beneficiaries or to third parties.
Plaintiff widow appealed from the judgment of the Arizona trial court, which found in favor of defendant, the executor of her husband's estate, on the widow's claim that shares of stock in her husband's corporation were her sole and separate property upon her husband's death by virtue of an inter vivos trust. The evidence at trial showed that decedent executed a declaration of trust in all the shares of stock in his corporation in which he declared himself to be the trustee and his wife the beneficiary. He reserved to himself the right to revoke the trust during his lifetime without notice to the beneficiary. Prior to his death, the decedent filed for divorce and directed an attorney to prepare a will, which referred to the corporation as being owned solely by the decedent, thus, impliedly revoking the trust he created with his wife as the beneficiary. The plaintiff widow contended that assuming the decedent intended to revoke the trust, he could only do so through writing; thus, without the written revocation, the trust remains to exist.
Can the decedent’s statement to his lawyer prior to his death be considered as a valid revocation of the trust he created?
The Court posited that while the decedent created a valid trust, it was revoked prior to his death. The trust provisions set forth certain acts that would be deemed conclusive evidence of revocation, but they were not the exclusive ways in which the trust could be revoked. A settlor could revoke a trust by communicating his decision to do so to the trustee. Here, where the settlor was also the trustee, the executor merely had to show that the decedent intended to terminate the trust and some communication on his part to the beneficiary or to a third party manifesting his decision to revoke. The decedent's statements to his attorneys sufficiently manifested his decision to revoke the trust.