When reforming a will or trust, the Surrogate’s Court “changes the language of the will [or trust instrument] itself by the addition or deletion of words in an attempt to conform [the instrument] to the decedent’s intent” (Matter of Stahle, NYLJ, Jan. 23, 2002, at 32 [Sur Ct, Onondaga County]). Historically speaking, courts have been “hesitant to reform wills [and trusts,] unless the reformation effectuates the [testators and grantors’] intent” (Matter of Brill, NYLJ, Aug. 17, 2017, at 23 [Sur Ct, Bronx County]; Matter of Dousmanis, 190 AD3d 548, 549 [1st Dep’t 2021]).
However, when the reformation of a will or trust will result in a settlement of litigation, courts have been less hesitant to reform wills and trust instruments (Marilyn G. Ordover & Charles F. Gibbs, “Correcting Mistakes in Wills and Trusts”, NYLJ, Aug. 6, 1998, at 25). This is because New York State has a strong public “policy encouraging family settlements” (Matter of Harburg, NYLJ, Aug. 12, 1997, at 26 [Sur Ct, New York County]). Thus, in cases in which the interested parties have agreed to reform wills or trusts in order to achieve settlements, courts repeatedly have approved of the reformations to which the parties have stipulated (Matter of Schmitt, NYLJ, July 3, 2000, at 1 [Sur Ct, Westchester County]; Matter of Schwartz, NYLJ, Jan. 22, 1992, at 25 [Sur Ct, Westchester County]; Matter of Wilkie, NYLJ, Jan. 17, 1992, at 35 [Sur Ct, Westchester County]).
Nassau County Surrogate Margaret C. Reilly’s decision in Matter of Johnson illustrates this point (Matter of Johnson, File No. 2015-383093/A, Decision and Order, dated June 29, 2022 [Sur Ct, Nassau County]). In Johnson, the trustee of a lifetime trust sought to invalidate an amendment to a trust instrument (id.). After years of discovery and extensive motion practice, the parties to the proceeding commenced a hearing concerning the trust amendment’s validity (id.). On the third day of the hearing, the parties entered into a settlement that provided for: (a) the trust amendment to be declared null and void; and (b) the original trust agreement to be reformed to provide for the share of one of the trust’s beneficiaries to be held in a continuing supplemental needs trust (id.). The proposed reformation would ensure that the beneficiary in question (who previously had defended the trust amendment’s validity) would remain eligible to receive governmental assistance, despite the fact that she was a trust beneficiary (id.). Surrogate Reilly granted the parties’ request to reform the original trust instrument in order achieve a settlement of the underlying litigation (id.).
Although courts generally reform wills and trusts sparingly, courts may be more willing to grant reformation of an instrument when doing so will achieve a settlement. Consequently, parties and practitioners should consider whether to propose to reform a will or trust when negotiating settlement agreements.
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