Heaps

I. INTRODUCTION

This case illustrates the sort of unexpected complications that can arise from the so-called living trusts, which are hawked so aggressively these days. The bottom line here is that the casual use of a living trust as a quickie estate planning device meant that a husband was worth a lot less than his second wife thought he was worth when she married him. Unbeknownst to her, the husband’s erstwhile assets had already been tied up for the first wife’s children because of an overly broad clause involving how the trust would hold title. As we explain below, the import of that clause is that it meant that removing an asset from the trust required something—anything really—more than just taking title in one’s own name. We will therefore affirm a judgment which requires the second wife to pay over assets that she thought were the husband’s, and later thought were hers, to the first wife’s children.

II. BACKGROUND

In 1985, during the course of a long marriage, George and Barbara Heaps—the husband’s first wife—executed a revocable living trust with both spouses acting as their own trustees. The trust would, however, become irrevocable with the death of one of…