Non-lawyers who have signed a living trust often talk about what their “will” provides. The confusion is understandable; in most cases, the living trust controls who will receive the bulk of the signer’s estate on death, even though our culture has long identified that role as belonging to the signer’s will. Usually, when one signs a living trust one also signs a "pourover" will, which simply leaves everything to the trust. In other words, the will is largely irrelevant, and it is the trust that controls, as if it were a will. But trusts and wills are different kinds of documents, and they are governed by different rules.

Consider Annabel Zilles, who died three years ago in Phoenix. She and her husband Frederick had signed a living trust eight years before. Her two nephews maintained that the trust did not convey all of her estate, and that they should receive 90% of the remaining assets. Two charities disagreed, and argued that the trust was not like a will.

The Zilles’ trust had left 5% of their estate to each of two charities, the Shriners Hospitals for Children and the American Legion. The remaining 90%, along with the couple’s extensive art collection, was to be left to a charity not named in the document itself, but described in a “Schedule C” attached to the original trust. Unfortunately, no one could locate anything that looked like a Schedule C, and as it turned Ms. Zilles had sold the art collection after her husband’s death anyway.

The family, the charities and the court all agreed that the Zilles’ provision for 90% of their estate had failed. The problem then became determining who should receive the bulk of their estate. The probate judge decided that the failed distribution should be treated as if Ms. Zilles had died partially “intestate” — that is, as if she had no will or other testamentary provision that controlled distribution of the remaining 90% of her estate. That meant that her two nephews would split the approximately $400,000.

The Arizona Court of Appeals disagreed, deciding that the primary goal should be to determine what Mr. and Ms. Zilles would have wanted. Since their trust had left no portion to their family, and the two 5% distributions were described as proportional shares of the residue of their trust estate, the proper thing to do would be to simply give the undistributed 90% half to each charity. Estate of Zilles, December 23, 2008.

Had the Zilles case turned on interpretation of a will without a provision for distribution of a portion of the residue, the result would have been governed by a long legal tradition of will interpretation. In that case, Ms. Zilles would have been deemed to have died partially intestate, and her remaining estate would have gone to her nephews (as her sole “heirs at law”). Since she and her husband had created a living trust, however, the rules of will construction and interpretation were not applied by the Court of Appeals.

There are other rules that differ between wills and trusts. Perhaps the most notable: if an original will is missing, the law creates a presumption that the signer destroyed the will with intent to revoke it. If an original trust is missing, the general rule is that the contents (provisions) of the trust can be established by other means, such as a photocopy (or even, if it is the best evidence available, believable testimony about what the trust contained).

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