In Re: Donald Hyde Trust
2014 SD 99
| S.D. | 2014Background
- Donald Hyde executed a will (1999), multiple codicils, and a revocable trust (2006) that funded a Charles Schwab brokerage account holding 10,000 Unisource shares and various real properties.
- The 2006 trust directed the Schwab stock to Baptist Children’s Home (75%) and Shepherd’s Ministries (25%); Hyde reserved the right to revoke/modify the trust while living.
- On June 5, 2009 Hyde executed three quitclaim deeds conveying Spearfish properties from the trust to siblings (delivered to Wilma) and a codicil bequeathing the 10,000 shares to his five siblings (codicil referenced his will, not the trust).
- Wilma borrowed $26,000 from Hyde in 2011 that Hyde withdrew from the Schwab account (a trust asset at the time); she agreed to repay him.
- After Hyde’s death, the circuit court: held the June 5, 2009 codicil did not modify the trust; denied reformation; ruled the $26,000 was repayable to Hyde’s estate (not the trust); found the 2009 deeds were validly delivered; and found no undue influence by Wilma.
- The Supreme Court of South Dakota affirmed all rulings, applying a clear-and-convincing-intent standard for testamentary acts to modify a revocable trust and upholding the trial court’s factual findings.
Issues
| Issue | Plaintiff's Argument (Wilma) | Defendant's Argument (Charities / Trustee) | Held |
|---|---|---|---|
| Whether the June 5, 2009 codicil modified the 2006 revocable trust to divert the Schwab stock to siblings | Codicil is a written instrument showing settlor’s intent to change beneficiary of stock; under Restatement/SD law a later codicil can modify a revocable trust | Codicil was testamentary, did not refer to the trust, and settlor reserved revocation while living; no clear and convincing evidence trust was intended to be modified | Court: Codicil did not modify the trust; no clear and convincing evidence Hyde intended to modify the trust by codicil |
| Whether the trust should be reformed to effect the codicil (mistake correction) | If the codicil reflected Hyde’s intent, SDCL 55-3-28 permits reformation to conform the trust to settlor’s intent | No clear-and-convincing proof of intent to modify; statute requires proof of mistake plus intent | Court: Denied reformation—insufficient evidence of intent/mistake |
| Whether the $26,000 loan to Wilma is a trust obligation (repayable to trust) | Funds came from the Schwab trust account; trustee power to loan could create a trust lien—repayment should be to the trust | No agreement or specific loan terms showing trust advance; testimony showed loan was to Hyde personally and to be repaid to him/estate | Court: Loan was payable to Hyde’s estate; no trust lien created; factual findings not clearly erroneous |
| Whether the 2009 deeds were validly delivered and whether undue influence invalidated deeds/codicil | Charities: deeds were not delivered; Wilma had a confidential relationship and unduly influenced Hyde (susceptible, opportunity, disposition, result) | Wilma: deeds were delivered; Hyde formed intent before West Virginia stay; no undue influence—Hyde was strong-willed and knew his decisions | Court: Deeds were effectively delivered (presumption of delivery upheld); no undue influence shown; charities failed to meet burden |
Key Cases Cited
- In re Estate of Bol, 429 N.W.2d 467 (S.D. 1988) (consideration of settlor intent where trust not specifically revoked)
- Schroeder v. Herbert C. Coe Trust, 437 N.W.2d 178 (S.D. 1989) (statement that revocation by will is invalid for irrevocable trusts)
- Stockwell v. Stockwell, 790 N.W.2d 52 (S.D. 2010) (presumption of valid deed delivery when deed is duly executed, acknowledged, and in grantee’s possession)
- In re Estate of Pringle, 751 N.W.2d 277 (S.D. 2008) (elements and proof standards for undue influence)
- In re Estate of Dokken, 604 N.W.2d 487 (S.D. 2000) (influence must destroy testator’s free agency to establish undue influence)