Clymer v. Mayo
393 Mass. 754, 473 N.E.2d 1084 (1985)

  • Clara made her husband, Mayo, the principle beneficiary of her will. She also made him the beneficiary of her non-probate assets (aka retirement accounts and insurance). She also made two inter vivos trusts.
    • The first trust named her husband as the principle beneficiary and gave him the power of appointment. It was to be funded with everything in her will up to the limits of the marital deduction.
    • The rest of her estate was to ‘pour over’ into the second trust. That trust gave a life estate to her husband who could take as much as he wanted and whatever was left over after he died went to her nephews and nieces and then to some Universities.
    • Neither trusts were funded at the time they were created.
      • These are known as pour over trusts because they start empty and only get funded when money from the estate ‘pours over’ into them upon the death of the settlor.
  • Clara and her husband got a divorce. As part of the divorce, her husband waived all rights to Clara’s estate. Clara changed her insurance policy to benefit her friend LaFrance.
    • The husband married another woman the day after the divorce was final!
  • Clara died. The administrator of her estate (Clymer) petitioned the court asking what to do with the money.
    • The trusts had never been dissolved, so according to the will the money should go there. But Clara’s husband had waived his rights to take the money.
    • The nieces and nephews argued that if Clara’s husband didn’t want the money, they should get it immediately.
    • Clara’s parents (the Weisses) argued that since the will was frustrated, the terms were void, so the money should go in intestate succession (aka to them).
      • A will can be revoked by operation of law when the testator gets a divorce, but this was a trust, not a will.
  • The Probate Court found:
    • The trusts remained valid.
    • The husband’s interest in the first trust was terminated by the divorce, but he could still take under the second trust.
    • The nieces and nephews can take from the second trust.
    • The Weisses lack standing to sue.
  • The Massachusetts Supreme Court affirmed in part and reversed in part.
    • Weiss claimed that a valid trust never existed because it was unfunded at creation, but the Massachusetts Supreme Court found that wasn’t a requirement since these were pour-over trusts.
    • The Court agreed that the first trust, which was designed to accommodate the marriage deduction became impossible once the divorce happened, so it was void.
      • Basically, the trust was revoked by operation of law.
    • The Trial Court judge had reasoned that under Massachusetts law, a will is invalidated by a divorce, but the second trust wasn’t a will, so it should still be valid. However, the Massachusetts Supreme Court found that in this case, the will and the trust were two parts of a “single testamentary scheme” and the same law that revoked the will also revoked the trust that was to be funded by the will.
      • Therefore, the Trial Court ruling that the husband was still a beneficiary of the second trust was reversed.
        • Basically, the Court was saying that a trust didn’t get funded until death, so the same Statute that was used to revoke the will should also apply to the trust. Ta-da!
      • The Court also looked to Clara’s intent and found that she intended the other beneficiaries to benefit from the second trust, so the other parts of the second trust were still valid.
      • The reasoning here was pretty shaky, but clearly the Court was trying to come up with a way to keep Mayo’s hands off the money.
    • The Universities stepped up and claimed that the nephews and nieces were actually related to the husband, not Clara, so they should not inherit (and all the money should go to the Universities.)
      • In general, when there is a revocation by operation of law because of a divorce, the ex-spouse and all of the ex-spouse’s relatives are removed from the will, unless there is explicit contrary intent.
      • However, the Court found that there was a latent ambiguities as to who the nieces and nephews are, and brought in extrinsic evidence to show that Clara wanted them to have the money.
  • Basically, this case helped to established the concept of the revocable inter vivos trust, which is when a settlor establishes a trust during their lifetime, but retains the option of revoking parts of that trust at any time before or after their death.
    • Under the Uniform Probate Code § 2-801, non-probate instruments can now be revoked by operation of law in the same manner as wills.
      • Under this Statute, the nephews and nieces would have lost (since they weren’t related to Clara) and the Universities would have gotten all the money.