1.2 Impact of Evidentiary Rules in General
Historically, one of the radical distinctions between a testamentary trust and an inter vivos trust was that the interpretation of a testamentary trust was subject to the plain meaning rule whereas an inter vivos trust did not suffer from that evidentiary impediment. The Restatement (Property: Wills and Other Donative Transfers) Third took the aspirational position that the plain meaning rule should be abolished. The Uniform Trust Code follows suit by providing at § 415 (“Reformation to Correct Mistakes”) that settlor intent may be established by extrinsic evidence assuming such evidence is “clear and convincing” to reform a trust.
Oddly, the U.T.C. may continue on a theoretical level the plain meaning rule for trust interpretation (as opposed to trust reformation). U.T.C. § 112 (“Rules of Construction”) applies the rules governing testamentary instruments for interpretation purposes of trusts. This is largely a distinction without a difference because one would presumably tack an action for modification to an action for interpretation if the settlor intent is not as expressed in the instrument. Thus, the rule in Washington, D.C. and in Virginia has changed since the adoption of the U.T.C. in those jurisdictions. Maryland, on the other hand, still is governed by the plain meaning rule and will continue to be so governed unless and until it adopts the “Maryland Trust Code.”
Historically, the second significant barrier (if you will) to receiving extrinsic evidence as to settlor intent was the operation and effect of the dead man’s statutes. Here again, there has been statutory modification (similar but not exactly the same) in Washington D.C. and in Virginia. Maryland, on the other hand, retains the classic formulation of the dead man’s statute but court interpretations have shrunk the scope of it. Arguably, Maryland case law would permit testimony to establish settlor intent that would not be permitted under Washington or Virginia statute.
The third significant factor impacting establishing settlor intent by extrinsic evidence is the hearsay rule. In jurisdictions having rules modeled after the federal rules of evidence, this no longer presents much of a problem and will not be addressed herein.