Distinction between "or" and "and" when funding a revocable living trust

[Kris989]

Jurisdiction

California

My wife and I have a revocable living trusts. At the time we got it, instructions for titling accounts and property said to use the following wording:

JOHN DOE AND JANE DOE, trustees of the DOE REVOCABLE TRUST DATED OCTOBER 14, 2021​

I'm about to buy some I-Bonds on treasurydirect.gov. It looks like I can setup a trust account to buy the bonds into. In the instructions the one example they give with two trustees uses "or":

John Doe or Sarah Jones, Trustees under Agreement with Jane Doe dated January 1, 2001​

So do I use "and" or "or"? The instructions also say:

The entity account manager must certify that he or she has the authority to act alone on behalf of the trust with regard to the account.​

Which also raises the question as to whether I can act alone or not. It's a pretty vanilla revocable living trust for a married couple, but I don't see any wording that indicates that either of the trustees can act alone, but I also don't see wording indicating they have to act jointly.

 

[adjusterjack]

In the absence of a section of the trust explaining the duties of the trustees there may be a legal "presumption" that "and" means that the trustees have to act jointly.

If the trust name contained the word "or" it would mean that either of you could unilaterally change the terms of the trust, revoke the trust, or sell items owned by the trust, without the knowledge and consent of the other. Trusts are typically created to avoid that.

You may have to re-write the trust before you buy the I-Bonds. Not retitle it, but explain the duties of the trustees and allow each to act unilaterally only under limited conditions.

Time for a lawyer to review as there is at least one flaw.

 

[zddoodah]

instructions for titling accounts and property said to use the following wording

And these instructions came from whom?

Your questions call for very specific legal advice. Seek it from an attorney. Preferably, that should be the attorney who drafted the trust. However, I have a suspicion that you used some online service rather than an attorney and did a bunch of things without knowing what exactly you were doing. Don't compound that mistake by seeking legal advice from anonymous strangers on the internet.

 

[Kris989]

You may have to re-write the trust before you buy the I-Bonds. Not retitle it, but explain the duties of the trustees and allow each to act unilaterally only under limited conditions.

Time for a lawyer to review as there is at least one flaw.

I'd rather not get into trust rewriting just to solve this I-Bond issue. It's not that large of a sum of money (wouldn't trigger probate), and I can instead specify a POD beneficiary. When you say "there is at least one flaw", were you just suggesting in respect to using this trust for I-Bond purchases, or in general?

Regarding a section explaining the duties of the trustees, there is a "General Power of Trustees" section, and a number of specific "Power" sections that follow, such as "Power to Conduct Business". None of them mention whether the trustees must act jointly. The only reference to acting jointly I found so far is in the "Settlors' Power to Designate Successor Trustees" section of the trust certificate, which say the powers in this section require acting jointly.

There could more language elsewhere and I just missed it. I did skim over the trust fairly quickly. I'll look again. I just remember when dealing with my Mom's trust upon her death, it was clearly stated in both the Trust itself and in the Certificate of Trust that the trustees could act individually. I'm not seeing that in our trust.

 

[Kris989]

And these instructions came from whom?

Your questions call for very specific legal advice. Seek it from an attorney. Preferably, that should be the attorney who drafted the trust. However, I have a suspicion that you used some online service rather than an attorney and did a bunch of things without knowing what exactly you were doing. Don't compound that mistake by seeking legal advice from anonymous strangers on the internet.

I used a lawyer. I will likely eventually take this question back to him, but find it useful to learn what I can first before asking him questions.

 

[Zigner]

You should go back to the attorney for clarification.

 

[zddoodah]

I used a lawyer. I will likely eventually take this question back to him, but find it useful to learn what I can first before asking him questions.

Unfortunately, reliable answers require knowledge of the terms of the trust, which we don't have.

 

[adjusterjack]

which say the powers in this section require acting jointly.

Which may imply that all duties must be performed jointly.

 

[Zigner]

Which may imply that all duties must be performed jointly.

Not disagreeing, just pointing out that it could also imply that, since the section took pains to point out the need for joint performance of duties, the rest of the sections don't need joint performance of duties (since they don't bother mentioning it).

OP needs to speak to the attorney.

 

[Kris989]

Yes, I will speak to my lawyer about this since regardless of what I learn here, I don't believe I'll be confident in the proper wording for titling the bonds to the trust (the original "and" vs "or" question).

...but still want to learn what more I can here first. I did find the following in our trust:



And it then goes on to list all the powers you would expect a trustee to have. Since it says "the trustee" and not "the trustees", does that imply that the trustees do not have to act jointly?

I should add that there are a number of other "Power to ..." sections after this one, and they always refer to "The trustee".

 

[Zigner]

There throws another curve - by wording it that way, it implies that there only is a single trustee in the first place.

 

[Kris989]

There throws another curve - by wording it that way, it implies that there only is a single trustee in the first place.

What's interesting is that in section 7.11 of the trust and the sections that come after it (which all discuss the trustees power), it always references "The trustee", but when the Certificate of Trust restates the section 7 powers, it always says "The trustees".

 

[Zigner]

What's interesting is that in section 7.11 of the trust and the sections that come after it (which all discuss the trustees power), it always references "The trustee", but when the Certificate of Trust restates the section 7 powers, it always says "The trustees".

Right - ambiguity.

 

[Kris989]

I got some answers from my lawyer. Regarding the trust referring to "the trustees" and the certification referring to "the trustee", he said they are interchangeable, and I also found the following in the trust:



Regarding the ability for a trustee to act individually, he pointed me to the following at the very end of the "Trustee" section of the trust (sorry about the formatting, but it crossed a scanned page boundary):



There is also similar wording in the certification, which I had noticed, but had trouble finding it in the trust (I had focused too much on the "Powers" section). He said this wording would allow the setup of a TreasuryDirect account titled to the trust but managed individually to me, although also said my wife had to agree with this (I guess referring to the "any cotrustee may delegate..." wording). I'm not sure if TreasuryDirect will require this delegation in writing, or if just a copy of the relevant certification pages will be sufficient for them. I'll guess I'll find out once I follow through with the account setup.

 

[Zigner]

Glad you had it looked at in its entirety by a pro.