Chancellor Denies Claim For Trust Reformation

In the Matter of THE JEREMY PARADISE DYNASTY TRUST and THE ANDREW PARADISE DYNASTY TRUST, C.A. No. 2021-0354-KSJM (January 31, 2023)

          The Chancellor aptly summarized the factual history in this case as follows:

In 2019, brothers Andrew and Jeremy Paradise created two trusts to hold stock— the “Andrew Trust” and the “Jeremy Trust” (together, the “Trusts”). The Andrew Trust was formed to support Jeremy’s personal spending, while the Jeremy Trust was formed to protect assets for the benefit of their mother and Jeremy’s children.  Attorneys prepared the trust agreements.  Each trust agreement provided for a “Trust Protector,” and included a list of persons in “position” to appoint, remove, and replace the Trust Protector (each the “Andrew Trust Agreement” and “Jeremy Trust Agreement” and together the “Trust Agreements”).  Although an early draft of the Jeremy Trust Agreement placed Jeremy in the “first position” with the right to select the Trust Protector, Andrew was in the first position under the final versions of both trust agreements.  Jeremy did not know this because he did not read the Jeremy Trust Agreement before he signed it, despite being asked and given multiple opportunities to do so.

          Jeremy sought reformation of the Jeremy Trust to place himself in the “first position” to appoint the Trust Protector, but the Court denied him that relief after trial as it concluded that he had “failed to prove that he had any intent at all when executing the agreement, and ex post desires will not suffice.”

          The court notably also stated, “[a] lack of understanding is not the sort of clear intent needed to support a claim for reformation. And it would make bad policy for this court to allow a party to rewrite trust terms which the party comes to dislike years after executing a trust agreement.”