Walter Permann had the best intentions when he singled out his most loyal employees. He worried his wife couldn’t manage his wire and cable supply firm without him, so he repeatedly told his team: The longtime employees would get distributions from his trust if they were employed by his company when he and his wife died. If not, the offer would lapse.
Ten years later, Permann sold the firm, rendering those loyalists’ “continued employment” impossible. When he died, they filed suit to determine their status as beneficiaries. A California trial court found the sale didn’t alter Walter’s original intent that the employees receive their gifts if they outlived his wife.
A court of appeals recently agreed, giving Walter’s employees their due because “the basic rule in the interpretation and construction of any will is that the intention of the testator must be carried out as nearly as possible”—even if it didn’t clearly express the trustor’s intent in the event of a sale.
Take care of your loved ones by working with an experienced estate planning attorney to be certain your intentions are clearly expressed for the long term. Schwan v. Permann, California, First District, Div. One, A151070 and A151073 (2018)
About the author:
John O’Grady leads a full-service estate and trust law firm in San Francisco. His practice includes Estate Planning & Administration, Probate and Trust Litigation.