In interpreting a trust, the court must interpret the words of the trust instrument.  Extrinsic evidence of the trustor’s intent may be introduced to show that he intended the words to have a special or specific meaning, but extrinsic evidence cannot be introduced to show a meaning inconsistent with the trust instrument’s words.  Here, the trust said that three key employees would be beneficiaries if they were still employed by the trustor’s company at his death.  Before the trustor died, he sold the company, so the condition no longer served its intended purpose.  Extrinsic evidence of the trustor’s reason for the condition could not be used to change “employed by” to “not employed by.”  However, California case law recognizes an “impossibility” limitation on conditions precedent to dispositions by will or trust, considering whether the trustor’s intent was to insist on the condition despite its subsequent impossibility based on a number of factors.  Substantial evidence supported the trial court’s finding that the trustor, in this case, did not insist on the condition precedent even though he did not alter the trust during the 5 years between his sale of the company and his death.

California Court of Appeal, First District, Division 1 (Margulies, Acting P.J.); October 25, 2018; 28 Cal. App. 5th 678