Also known as: oral trusts · parol trust · parol trusts
Written by attorneys — see sources below.
A trust of personal property created by oral declaration rather than a written instrument. Its existence and terms must be shown by clear and convincing evidence.
Harold told his financial advisor Dana over lunch that she should hold his $200,000 certificate of deposit to fund his grandchildren's first homes. Dana never received title to the CD and her notes were vague. After Harold died the grandchildren sued Dana claiming an oral trust. The court required the grandchildren to prove by clear and convincing evidence that Harold intended a present trust with definite terms before imposing fiduciary duties on Dana.
George delivered two boxes each containing $200,000 cash to friends and instructed them to hold the money secretly until his death then deliver it to his sister Faustina. The friends followed the instructions after George's death. Faustina petitioned the probate court for a declaratory judgment that an oral trust existed. The court examined whether the evidence of the oral instructions met the clear and convincing standard required to establish the trust and its terms.
In 1998 or 1999, George Fournier asked a couple who were friends with him if they would hold some money for him. They agreed, and Fournier delivered two boxes, each containing $200,000 cash, to their home. Fournier asked them to hold the $400,000 in secret until his death and then deliver it to his sister, Faustina Fogarty, explaining that she needed it more than his other sister, Juanita Flanigan. Fournier told both Flanigan and her daughter that his friend was holding money for him. Fournier died in 2005, survived by Fogarty and Flanigan. Under his will, Fogarty was appointed the personal representative of his estate. Upon learning of Fournier's death, Fogarty and her son met privately with the couple, and the husband gave Fogarty the money. Fogarty petitioned the Aroostook County Probate Court for a declaratory judgment to establish that during his lifetime Fournier had created an oral trust for her benefit. Following a hearing, the probate court denied her petition. Fogarty appealed the judgment to the Supreme Judicial Court of Maine.
View caseThe creation of the oral trust and its terms must be established by clear and convincing evidence. This standard is higher than a preponderance of the evidence and requires proof that produces a firm belief or conviction in the mind of the factfinder.
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No. Modern trust law permits an oral trust of personal property unless another statute specifically requires a writing. The absence of a signed trust instrument does not automatically defeat the claim.
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The claimant must prove by clear and convincing evidence that the settlor manifested a present intent to create a trust, identified the trust property, designated a trustee, and specified definite beneficiaries and terms.
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Yes. Subsequent conduct such as denying the trust or treating the property as personal assets can prevent the evidence from meeting the clear and convincing standard even if an initial oral statement was made.
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…estate. The finding, besides reciting the conclusion of the court that Ethel constituted herself the trustee of an express oral trust for the benefit of the plaintiff, contained the conclusion that she intended “to give” the library to the plaintiff and “took all the steps for delivery of possession ... to the plaintiff…