April 17, 2014 – In the Matter of the Estate of Darrell R. Schlicht and concerning Stephan E. Barlow v. Rodney Olguin, as personal representative of the Estate of Darrell Robert Schlicht, No. 32,632

1 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: Apnil 17, 2014
NO. 32,632

IN THE MATTER OF THE ESTATE OF
DARRELL R. SCHLICHT, deceased,

and conceming
STEPHAN E. BARLOW,

Plaintiff-A ppellant,
V.

RODNEY OLGUIN, as personal representative
of the Estate of Darrell Robert Schlicht,

Defendant- Appellee.

APPEAL FROM THE DISTRICT COURT OF VALENCIA COUNTY
James Lawrence Sanchez, District Judge

Pregenzer Baysinger Wideman & Sale, P.C.
Marcy Baysinger

Albuquerque, NM

for Appellant

Law Office of Tibo J. Chavez, Jr.
Tibo J. Chavez, Jr.
Belen, NM

for Appellee

OPINION
SUTIN, Judge.
{1} 	In this trust litigation, we interpret a statute in the Uniform Trust Code in order
to resolve a conflict between Plaintiff Stephen E. Barlow, who was to take under a
trust, and Defendant Rodney Olguin, who was to take under a will if the trust settlor
successfully revoked the trust with the will. The critical question is whether a will
that revokes a trust can constitute an effective revocation, given that a will is generally
considered ineffective unless and until the testator dies and the will is probated. The
district court held that the trust was effectively revoked by the will, thus permitting
distribution of the settlor’s/testator’s property to Olguin. Barlow appeals. We hold that
the district court did not err.
BACKGROUND
{2} 	Darrell R. Schlicht (the settlor) executed the Darrell R. Schlicht Revocable
Trust Agreement on November 1, 1991. The last, amendment number four, of several
amendments to the trust executed by the settlor, reflects that as of the date of the
fourth amendment, November 3, 1998, the settlor and Mae Verlea Schlicht, his wife,
were trustees of the trust, and if the settlor and Verlea were unable to serve as
successor trustees, Stephen E. Barlow, was to serve as successor trustee. 	Further,
based on an earlier amendment pursuant to which Verlea was named as the intended

2
recipient distributee of any balance remaining in the trust, the fourth amendment
stated, “[i]n the event of the death of Mae Verlea Schlicht prior to complete
distribution of her share, such trust share or the remainder thereof, shall be distributed
to Stephan E. Barlow, or to his descendants by right of representation should she
predecease me.” Barlow was Verlea’s nephew.
{3} 	Section 5.1 of the trust contained the following provision related to revocation
of the trust.
The [settlor] reserves the right and power at any time or times
during [the settlor’s] lifetime without the consent of any other person to
amend this Agreement in whole or in part, and to revoke or terminate
this Agreement as it affects the [settlor’s] separate and community
property by a duly executed instrument to that effect, signed by the
[settlor] and delivered to the Trustee.
This revocation-related Section 5.1 came into question when Verlea died on December
17, 2010, and Darrell died a day later on December 18, 2010, leaving a Last Will and
Testament he had executed on December 16, 2010 (the will). The will stated:
That I, Darrell Robert Schlicht . . ., hereby make, publish[,] and
declare this to be my LAST WILL AND TESTAMENT, hereby
revoking any and all former Wills, Codicils[,] and Testamentary
dispositions of any kind or nature heretofore made by me at any time,
and also revoking any trust provision of the Darrell R. Schlicht
Revocable Trust Agreement dated November 1, 1991, relating to the
death of Mae Verlea Schlicht and her share in such trust agreement,
which shall pass into my estate and be distributed in accordance with the
provisions of my last will and testament.

3
{4} 	The settlor, as testator under his will, appointed Rodney Olguin as personal
representative and gave, devised, and bequeathed all of his estate to Olguin. Olguin
and his wife were the caretakers for the settlor and Verlea for a number of years.
{5} 	The will was admitted to informal probate on January 3, 2011, in the district
court. Olguin was appointed personal representative of the estate. On February 15,
2012, Olguin filed a motion to be appointed successor trustee of the trust on the
ground that the will revoked the trust. 	Barlow opposed the motion. 	And Olguin
replied. After a hearing on Olguin’s motion in March 2012, the district court (Judge
Richard Knowles) requested further briefs on whether the trust was revoked by the
will’s revocation clause.
{6} 	After a hearing in October 2012 on the supplemental briefing, the district court
(Judge James Lawrence Sanchez) granted Olguin’s motion in a November 26, 2012,
order. NMSA 1978, Section 46A-6-602(C) (2007) was central to the issue before the
court. The section states:
C. 	The settlor may revoke or amend a revocable trust:
(1) by substantial compliance with a method provided in the
terms of the trust; or
(2) if the terms of the trust do not provide a method or the
method provided in the terms is not expressly made exclusive, by:

4
(a) a later will or codicil that expressly refers to the trust or
specifically devises property that would otherwise have passed
according to the terms of the trust; or
(b) any other method manifesting clear and convincing
evidence of the settlor’s intent.
Id.
{7} 	The court determined that (1) Section 46A-6-602(C) applied to the method of
revocation of the trust; (2) Section 5.1 of the trust set out the requirements for
revocation of the trust, but did not expressly state that those requirements were the
exclusive means by which the trust could be revoked; (3) the revocation of the trust
in the will demonstrated substantial compliance with the terms of the trust related to
its revocation and manifested the settlor’s intent to revoke the trust; and (4) Barlow’s
interest in the trust as a remainder beneficiary was based on the provisions in the trust
benefitting Verlea and, consequently, revocation of trust provisions related to the
death of Verlea in the will served to revoke Barlow’s interest as a beneficiary. The
court then held that the will revoked the trust. 	And the court appointed Olguin as
successor trustee of the trust “for the purpose of transferring all property from the
[trust] to the Estate of Darrell R. Schlicht.” Barlow appealed the court’s November
26, 2012, order.
{8} 	On appeal, Barlow asserts the following points: 	(1) a trust the terms of which
require revocation by a written instrument executed during the settlor’s lifetime cannot

5
be revoked by the settlor’s will; and (2) if this Court enforces the revocation as stated
in the will, the revocation was incomplete and Barlow remains entitled to distribution
of trust property.
DISCUSSION
Standard of Review
{9} 	We agree with the parties that the facts are not in dispute and that the case
involves interpretation of the trust language and statutory construction, requiring our
de novo review. See Oldham v. Oldham, 2011-NMSC-007, ¶ 10, 149 N.M. 215, 247
P.3d 736 (“Statutory construction is a matter of law we review de novo.” (internal
quotation marks and citation omitted)); Cable v. Wells Fargo Bank N.M., N.A., 2010-
NMSC-017, ¶¶ 9-10, 148 N.M. 127, 231 P.3d 108 (stating that, where the facts are
undisputed, we review “the interpretation of trust language and the application of
statutes to the trust and its terms” de novo).
I. 	Whether the Trust Was Revoked
{10} 	As his first point, Barlow argues that the will did not become effective until the
settlor’s death, and therefore, at the time the will was admitted to probate, the trust
was irrevocable. 	Thus, according to Barlow, the terms of the trust controlled the
appointment of the successor trustee and the distribution of trust property. Barlow

6
argues that, as a consequence, he must be appointed successor trustee and that he is
entitled to distribution of trust property.
{11} 	Barlow argues that the terms of revocation in the trust provided an exclusive,
meaning sole, method of revocation, that this exclusive method of revocation must be
strictly adhered to, and that the court had no statutory or other basis on which to hold
that the will revoked the trust. See Oldham, 2011-NMSC-007, ¶ 15 (stating that the
appellate courts “must honor legislative intent that wills and trusts be revoked in strict
accordance with the statutory methods and formalities established by the [Uniform
Probate Code] and the [Uniform Trust Code]” and that “[r]evocation of wills and
trusts is governed by mandatory statutes”); Gushwa v. Hunt, 2008-NMSC-064, ¶ 15,
145 N.M. 286, 197 P.3d 1 (stating that the “Probate Code requires an exacting
attention to form as well as intent to validate a revocation”). Barlow faults the district
court for determining that Section 5.1 of the trust 	did not expressly state that its
requirements were the exclusive means by which the trust could be revoked and for
failing to focus solely on whether the will substantially complied with the exclusive
method of revocation required by the trust.
{12} 	In addition, according to Barlow, under Section 5.1 of the trust, the trust “could
only be revoked during [the settlor’s] lifetime by a duly executed instrument[,]” and
the trust was not revoked during his lifetime because the will did not become effective

7
until his death, after which time the trust was already irrevocable. In support of this
argument, Barlow cites New Mexico authority indicating that a will is not effective
to revoke a trust upon the death of the grantor-testator. 	See Oldham, 2011-NMSC-
007, ¶¶ 21-22 (disagreeing with an argument that a marital property judgment could
act to revoke a will and trust posthumously because the will and trust became
irrevocable when the grantor/testator died). And he cites foreign authorities for the
proposition that if the grantor reserves a power to revoke his trust only by a
transaction inter vivos (while he is alive), such as by a notice to the trustee, he cannot
revoke the trust by his will. See In re Estate of Lindstrom, 191 Cal. App. 3d 375, 385
(Ct. App. 1987) (relying on the Restatement (Second) of Trusts § 330 cmt. j (1959)
for the proposition that when the settlor of a trust reserves a power to revoke the trust
only in a particular manner, the trust may be revoked only in that manner; thus, for
example, a trust provision permitting revocation by a transaction inter vivos, precludes
a revocation by a will); Merchants Nat’l Bank v. Weinold, 160 N.E.2d 174, 177 (Ill.
App. Ct. 1959) (relying on the Restatement (First) of Trusts § 330 cmt. j (1935) for
the same); One Valley Bank, N.A. v. Hunt, 516 S.E.2d 516, 520 (W.Va. 1999) (same);
see also Brown v. Int’l Trust Co., 278 P.2d 581, 583 (Colo. 1954) (en banc) (relying
on the proposition that where a trust provision permits revocation or amendment “only
during the lifetime of” the settlor, a revocation in a will that takes effect after the

8
settlor’s death does not revoke or amend the trust provisions (internal quotation marks
and citation omitted)).
{13} 	Olguin pits the critical importance of the settlor’s intent against Barlow’s
arguments, stating that the terms of the trust and later amendments indicate the
settlor’s intent to revoke the trust and to leave the trust assets to the heirs of his estate.
Olguin points to Oldham’s language that “[a] settlor can revoke or amend a revocable
trust by complying with a method of revocation provided in the terms of the trust.”
2011-NMSC-007, ¶ 18 (internal quotation marks and citation omitted). And he draws
on Cable in which our Supreme Court stated that, under the Uniform Trust Code, “the
phrase ‘terms of [a] trust’ is defined as ‘the manifestation of the settlor’s intent
regarding a trust’s provisions as expressed in the trust instrument or as may be
established by other evidence that would be admissible in a judicial proceeding.’ ”
2010-NMSC-017, ¶ 12 (quoting NMSA 1978, § 46A-1-103(R) (2007) of the Uniform
Trust Code). 	Olguin also points to “the basic principle that in construing the
provisions of wills and trust instruments, the court must attempt to ascertain and give
effect to the [settlor’s] intent.” 	Cable, 2010-NMSC-017, ¶ 11 (alteration, internal
quotation marks, and citation omitted).
{14} 	In construing Section 46A-6-602(C)(2) and Section 5.1 of the trust, Olguin
contends that the settlor “was free to amend or revoke his trust at any time, by a duly

9
executed instrument signed by [him] and delivered to the trustee without consent of
any other person” and that the trust “does not expressly establish that this is the
exclusive means by which the trust could be revoked.” Thus, according to Olguin, a
will that specifically mentions and revokes the trust “substantially conforms to both
the express method of revocation contained in the trust document” and Section 46A-6-
602(C)(2)(a)’s permitted method of “a later will . . . that expressly refers to the
trust[.]”
{15} 	Olguin distinguishes Barlow’s New Mexico authority, showing that Oldham
and Gushwa are factually distinguishable, primarily because Oldham involved a
divorce and its effect on a will and trust, and Gushwa involved only revocation of a
will and not a trust and did not involve the Uniform Trust Code. 	As to Barlow’s
foreign authority, Olguin shows that Lindstrom and One Valley Bank were based on
significantly different statutory law and that Merchants National Bank and One Valley
Bank did not involve a will that specifically referred to revocation of a specific trust.
{16} 	We agree with Olguin and with the district court’s application of Section 46A-
6-602(C)(2) under these circumstances. The terms of the settlor’s trust provided a
method to revoke the trust’s provisions, but that method was not expressly stated to
be the exclusive method of revocation. Thus, under Subsections (C)(1) and (2), the
settlor appropriately revoked the trust by substantial compliance with a method

10
provided in the terms of the trust, by the later will that expressly referred to the trust,
and also by specifically devising property that otherwise would have passed according
to the terms of the trust.
{17} 	Barlow’s authorities and argument to the contrary are not persuasive under the
circumstances 	of 	this 	case. 	The 	principle 	espoused 	in 	Barlow’s 	foreign
authorities—that where a trust provision dictates the exclusive means of amendment
or revocation, no other means will suffice to amend or revoke a trust—comports with
Section 46A-6-602(C)(2). See id. (stating that the subsection only applies where “the
method provided in the terms [of the trust] is not expressly made exclusive”). Thus,
we need not look further than New Mexico statutory law in considering this matter.
Had the settlor’s trust expressly limited the means of revocation or amendment to an
inter vivos revocation, Barlow would likely have prevailed in this matter under the
theory that the settlor’s will did not become effective until the will was probated. But
the facts of this case do not warrant an application of that principle.
{18} 	Section 46A-6-602(C)(1) allows revocation by “substantial compliance with a
method provided in the terms of the trust[.]” 	Here, the will executed during the
settlor’s lifetime constituted substantial compliance with the terms of the trust. Those
terms required a duly executed instrument signed by the settlor and delivered to the
trustee during the settlor’s lifetime. Further, we do not read the exclusivity language

11
in Section 46A-6-602(C)(2) as rejecting compliance through a duly executed will
signed by the settlor and delivered to the trustee during the settlor’s lifetime.
Additionally, the trust, specifically Section 5.1, and the will manifest a clear intent on
the settlor’s part that the trust was revoked by the will and that Olguin take, under the
will, the property formerly held in the trust. 	We conclude that the district court
resolved the matter correctly. See § 46A-1-103(R) (“ ‘[T]erms of a trust’ means the
manifestation of the settlor’s intent regarding a trust’s provisions as expressed in the
trust instrument or as may be established by other evidence that would be admissible
in a judicial proceeding[.]”).
II. 	Whether the Revocation Was Incomplete, Permitting Barlow to Claim
Trust Property
{19} 	Barlow’s fall-back position, if we disagree with him in regard to whether the
will was effective to revoke the trust, is that the will only revoked trust provisions
“relating to the death of Mae Verlea Schlicht and her share in such trust agreement[,]”
and thus, “[b]y its own terms, the purported revocation only revoked provisions for
the benefit of . . . Verlea.”
{20} 	In amendment number three to the trust, in Section 4.1.1, the settlor provided
that the remaining balance, if any, in the trust was to be distributed to Verlea. 	In
amendment number four, Section 4.1.2 was amended to read that if Verlea died before
the complete distribution of her share, that share or the remainder of it was to be

12
distributed to Barlow, should Verlea predecease the settlor. 	Barlow argues that
because Verlea died before her share was distributed, the revocation had no effect on
the distribution of trust property and that the alternative provision in the fourth
amendment controls the distribution of trust property favoring distinction to Barlow.
That is, “[t]he purported revocation served only to extinguish Verlea’s interests as a
remainder beneficiary[,]” leaving intact Barlow’s entitlement to distribution of trust
property.
{21} 	We are unable to agree with Barlow. We hold that the district court properly
concluded that all provisions relating to any of Verlea’s remaining interests were
revoked, including in particular Barlow’s interest as a beneficiary. Barlow essentially
conceded this point in the district court, stating:
[I]f the provision in the will revokes the trust, then the property, as I see
it, passes through [the settlor’s] probate estate and to the Olguins. If the
will did not revoke the trust, then Mr. Barlow is the nominated successor
trustee, he is also the sole remainder beneficiary, so the property then
would pass through the trust to Mr. Barlow.
This view of the settlor’s intent in regard to the property upon revocation of the trust
is manifestly more reasonable than that now advanced by Barlow for reversal.
CONCLUSION
{22} 	We affirm the district court.
{23} 	IT IS SO ORDERED.

WE CONCUR:

JONATHANB. SUTIN, Judge

JAMES J. WECHSLER, Judge

LINDA M. VANZI, Judge

13