1
Title
Vulnerability of a trust that had been revocable and funded by settlor inter vivos to postmortem
spousal election generally subject to “exhaustion” of settlor’s probate estate, which may never
happen
Text
In an ever-increasing number of jurisdictions, the surviving spouse of the settlor of an inter
vivos trust, via the spousal election statute, may be afforded postmortem access to the trust
property, provided the deceased spouse had reserved a general inter vivos power of appointment,
such as an unrestricted right to revoke or amend. The Uniform Probate Code is in accord, as is
the Restatement (Third) of Property and the Restatement (Third) of Trusts. So is the UTC.
Upon the death of the settlor of a self-settled revocable inter vivos trust, the settlor’s
surviving spouse, assuming he or she makes the statutory spousal election, will first seek full
satisfaction from the settlor’s probate estate. It is “traditional doctrine” that the assets of a
settlor’s probate estate must have been “exhausted” for the assets of the self-settled revocable
inter vivos trust to become accessible in satisfaction of the election entitlement, and only to make
good on any shortfall. See UTC §505(a)(3) & cmt. See also UPC §6-102(b) & cmt. Exhaustion is
not inevitable in such situations. Take, for example, Matter of Estate of Dower, 405 Mont 443,
495 P.3d 1083 (2021), the court concluding that the husband’s probate estate was sufficient to
satisfy the wife’s statutory allowances, this due to the abatement of the specific devises made to
her under the husband’s will. A surviving spouse invoking his or her election rights does not
make him or her a postmortem creditor of the deceased spouse’s estate. That having been said,
the default law is that the postmortem creditors of the settlor of a revocable inter vivos trust also
must look to the settlor’s probate estate in the first instance before turning their sights on the
property of the revocable inter vivos trust. The default primary vulnerability of the probate estate
in the creditor-accessibility context is taken up generally in §5.3.3.1 of Loring and Rounds: A
Trustee’s Handbook (2022), the relevant parts of which are reproduced in the appendix below.
The Handbook itself is available for purchase at: https://law-
store.wolterskluwer.com/s/product/loring-rounds-a-trustees-handbook-2022e-
misb/01t4R00000OVWE4QAP.
Appendix
§5.3.3.1 Reaching Settlor’s Reserved Beneficial Interest or Even the
Entrusted Property Itself [from Loring and Rounds: A Trustee’s Handbook (2022),
available for purchase at: https://law-store.wolterskluwer.com/s/product/loring-rounds-a-
trustees-handbook-2022e-misb/01t4R00000OVWE4QAP].
***
The settlor-beneficiary’s postmortem creditors. It is self-evident that the legitimate postmortem
creditors of the settlor of a testamentary trust will have access to that portion of the settlor's probate estate
that is destined to fund the trust, i.e., to the extent their lawful claims have not been or cannot be satisfied
from other estate assets. Whether by statute or decision, the probate estate is generally where postmortem
