## Facts

- Sidney M. Pond executed a will and a 1991 revocable trust, naming himself and his wife, Marjorie S. Pond, as co-trustees.
- Sidney and Marjorie transferred virtually all assets (except the marital home) into the trust.
- During Sidney’s lifetime, the trust directed payment of all income and such principal as the trustees deemed necessary to Sidney and Marjorie.
- The trust omitted any provision directing payment of income or principal to Marjorie if she survived Sidney.
- The trust provided that after the deaths of both spouses, the trust would terminate and be distributed in equal shares to their children, with substitutionary gifts to a deceased child’s issue (payable when the issue reached age thirty).
- Sidney’s will left tangible personal property to Marjorie and poured the residue into the trust.
- The will included a tax clause authorizing Marjorie, as executrix, to decide whether to elect QTIP treatment under I.R.C. § 2056(b)(7) for all or part of the trust to obtain the marital deduction.
- Sidney died in 1996; because the trust did not provide Marjorie trust income at least annually for life, it did not satisfy QTIP requirements, creating approximately $70,000 in additional estate tax exposure.
- Acting as trustee, Marjorie sought reformation of the trust, alleging scrivener’s error and requesting insertion of terms granting her the income interest for life needed for QTIP qualification.
- The matter was reserved and reported from the Probate and Family Court; the Supreme Judicial Court took direct appellate review, noting the importance of a decision from the state’s highest court for federal tax purposes.

## Issues

1. Whether a trust may be equitably reformed for scrivener’s error when it omits any provision for the surviving spouse after the settlor’s death.
2. Whether the evidence established, by clear and decisive proof, that the trust failed to embody the settlor’s intent and should be reformed to grant the surviving spouse a qualifying income interest for life.

## Decision

- The Supreme Judicial Court permitted reformation of the trust.
- The court found clear and decisive proof that the omission of a post-death benefit for the surviving spouse was a scrivener’s error and did not reflect the settlor’s intent.
- The court ordered reformation to provide Marjorie a lifetime income interest sufficient for QTIP treatment so the estate could obtain the federal estate tax marital deduction.

## Legal Principles

- A trust instrument may be reformed in equity when, due to scrivener’s error, it fails to reflect the settlor’s intent.
- Reformation requires clear and decisive proof of both the mistake and the intended terms.
- In determining intent, a court may consider the integrated estate plan and objective evidence from coordinated instruments (such as a pour-over will and tax-election provisions) to assess whether an omission is inconsistent with the plan.
- When state-law property interests affect federal estate tax consequences, a determination by the state’s highest court provides the most authoritative statement of state law for federal tax administration.

## Conclusion

The court reformed the revocable trust because clear and decisive evidence showed that a drafting error omitted any post-death provision for the surviving spouse, defeating the settlor’s plan to support her and to secure the federal marital deduction through QTIP treatment.


Pond v. Pond, 678 N.E.2d 1321 (Mass. 1997)