Common law as enhanced by equity. At one time, protocol for executing a revocable inter vivos (I-V) trust instrument and its associated pour-over will was to first deal with the trust instrument. Settlor signed it, trustee accepted in writing trusteeship, trustee acknowledged receipt in writing of, say, a $1.00 bill, which was then stapled to the schedule of assets (usually last page). It was all about compliance with doctrine of [facts of, acts of, events of] independent legal significance (ILS). Independent of what? Independent of the pour-over will. If, on the other hand, the sole purpose of a trust instrument was to “complement” the will then, for the trust’s dispositive provisions to be enforceable as to the pour over, compliance with the execution formalities (signing, witnessing, etc.) of the applicable wills statute was required. The trust instrument’s pages would have to be present as part of the will at the time the will was executed or duly incorporated by reference into the will or duly executed as a codicil to the will. The end-product, however, would be a public testamentary trust, not a private I-V trust.

Back to ILS. The trust is a fiduciary relationship with respect to property. A token-funded revocable I-V trust is such a relationship. Doctrinally it exists independently of the ambulatory pour-over will. The non-testamentary trustee is in office available to receive future additions to the trust corpus, whether I-V or postmortem. A pour-over will executed before the trust instrument raised concerns that the trust would lack ILS such that the pour-over would lapse. For an I-V trust to come into being there must be a present I-V transfer of some property interest. A legacy or devise under the will of a living person being a mere expectancy, i.e., not property, I-V token funding proved an easy work-around. So also did an I-V designation of the trustee as beneficiary of a life insurance contract, the I-V inception property being the contractual rights. Once the revocable I-V trust had ILS by virtue of its token funding, the settlor could, post execution of the pour-over will, effectively execute amendments to the trust without having to go back each time and re-execute his will. For more on ILS, see §8.15.9 of Loring and Rounds: A Trustee’s Handbook, which section is reproduced in appendix below. The Handbook is available for purchase at: https://law-store.wolterskluwer.com/s/product/loring-roundstrustees-hanbook-2023e/01t4R00000Ojr97QAB.

Statute. Efforts have been made legislatively to maintain the revocable I-V trust’s doctrinal independence from the pour over will while dispensing with the I-V funding requirement, rendering ILS irrelevant in the context of testamentary additions to trusts and making it doctrinally possible for an enforceable I-V trust to come into existence postmortem.

Uniform Testamentary Additions to Trusts Act (1960) (1960 Act). The 1960 Act was “problematic.” It never came right out and said that I-V trusts with associated pour-over wills no longer need I-V funding, token or otherwise, to be enforceable as to pour-overs. Instead, it spoke of pouring over into a trust “regardless of the existence, size, or character of the corpus of the trust.” The term “trust” not being defined in the statute, one defaulted to equity’s definition with its property requirement. Classic circularity. It also referred to a life-insurance trust funded with contractual rights as being “unfunded.” The judicial confusion that ensued is chronicled in UPC §2-511’s official comment.

Uniform Testamentary Additions to Trusts Act (1991) (1991 Act) [now UPC § 2-511]. The 1991 Act is the 1960 Act barnacled up with qualifications and additions. Better to have started afresh, perhaps by deeming an I-V relationship to be a trust relationship for purposes of the 1991 Act, provided it would qualify as a trust relationship but for the lack of subject property. In any case, the 1991 Act “makes clear,” its words, that in lieu of token funding “the devise itself,” its words, may now effectively serve as the I-V trust’s inception asset. See UPC §2-511 cmt.