PROBATE CORNER
PROBATE CORNER
Equitable Deviation Doctrine
DAVID M . GARTEN
The doctrine of equitable deviation has been applied to allow trustees to depart from the terms of a trust instrument where there has been an unanticipated change in circumstances that threatens to defeat or substantially impair the material purpose for which the trust was created . See § 736.04113 , F . S . which reads in relevant part :
( 1 ) Upon the application of a trustee of the trust or any qualified beneficiary , a court at any time may modify the terms of a trust that is not then revocable in the manner provided in subsection ( 2 ), if : …( b ) Because of circumstances not anticipated by the settlor , compliance with the terms of the trust would defeat or substantially impair the accomplishment of a material purpose of the trust ;…” .
Unanticipated circumstances . Under the "' equitable deviation '" doctrine , the objective is not to disregard the intention of the settlor , but to give effect to what the settlor ' s intent probably would have been had the circumstances in question been anticipated . Restatement ( Third ) of Trusts § 66 , Comment a . See also Scott on Trusts § 167 . Although the unanticipated circumstances are likely to be circumstances that have changed since the creation of the trust , the rule does not require changed circumstances ; it is sufficient that the settlor was unaware of the circumstances in establishing the terms of the trust . Restatement ( Third ) of
Trusts , § 66 , Comment a .
Deviation must advance the trust ’ s material purpose . Upon a finding of unanticipated circumstances , the court must further determine whether a proposed modification or deviation would defeat or substantially impair the accomplishment of a material purpose of the trust . See § 736.04113 ( 1 ), F . S . The fact issue that controls the case is the settlor ' s intent in creating the trust . Dennis v .
Kline , 120 So . 3d 11 ( Fla . 4th DCA 2013 ). Deviation , including termination , merely because it would be more advantageous to the beneficiaries is inappropriate . Rather , the trust must be so inefficient that its continuation would necessarily interfere with the trust ' s purpose . Church of the Little Flower v . US Bank , 979 N . E . 2d 106 ( Ill . App . 2012 ).
Admissible evidence . In exercising discretion to modify a trust , the court must consider the following : ( a ) the terms and purposes of the trust , ( b ) the facts and circumstances surrounding the creation of the trust , and ( c ) extrinsic evidence relevant to the proposed modification . The court must also consider spendthrift provisions , but the court is not precluded from modifying a trust because the trust contains a spendthrift provision . See § 736.04113 ( 3 ), F . S .
Remedies . In modifying a trust , a court may : “( a ) amend or change the terms of the trust , including terms governing distribution of the trust income or principal or terms governing administration of the trust ; ( b ) terminate the trust in whole or in part ; ( c ) direct or permit the trustee to do acts that are not authorized or that are prohibited by the terms of the trust ; or ( d ) prohibit the trustee from performing acts that are permitted or required by the terms of the trust .” See § 736.04113 ( 2 ), F . S . But see M . Begleiter , Administrative and Dispositive Powers in Trust and Tax Law : Toward a Realistic Approach ," 36 Univ . of Florida L . Rev . 957 ( 1984 ) wherein the author concluded that “[ t ] he clear rule in this country is that a court will not permit deviation from the dispositive terms of a trust in favor of a beneficiary if to do so will reduce or eliminate the interests of other beneficiaries .”
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