Is It Possible To Modify An Irrevocable Trust?
As their name suggests, irrevocable trusts are legal documents that cannot generally be revoked or modified after it has been created and the trust has been funded. However, there are certain exceptions to this that may make it possible to make changes at some point. Below, our St. Petersburg trust planning lawyer explains further.
Parties Named in a Trust
Before understanding when you can change an irrevocable trust, it is important to know the parties who are named in these documents. These are as follows:
- Grantor: This is the person who executes the trust and funds it.
- Trustee: The person who is responsible for managing the trust is known as the trustee. Grantors often manage the trust themselves during their lifetime and appoint a trustee to manage it after they pass away.
- Beneficiaries: The individuals who will benefit from the trust and receive the property held within it are the beneficiaries.
When Can You Modify an Irrevocable Trust?
Florida law allows courts to modify irrevocable trusts if the change reflects the grantor’s intentions. Generally speaking, there are three instances in which the terms of an irrevocable trust can be modified. These are as follows:
- The goal of the trust has become impractical, impossible, or illegal, or the trust’s purpose has been fulfilled,
- There have been circumstances that could not be anticipated and they interfere with compliance of the trust, or
- An original and important purpose of the trust is now non-existent.
Unforeseen circumstances are the most common reason for modifying an irrevocable trust. For example, if a beneficiary of the trust passes away, it will have to be modified to reflect this. When a trust is no longer in the interest of the beneficiaries, the trust may also be modified.
Modifying an Irrevocable Trust Under Common Law
You may also be able to modify an irrevocable trust using common law in Florida. Common law allows for the modification of an irrevocable trust without the need for the court to establish the practicality of the trust. It is possible for the grantor and beneficiaries to reach an agreement to modify or revoke the trust before petitioning the court for a modification. If all parties involved agree to the change, there is no reason to keep the trust in its current state.
Reformation
Reformation is a process of modifying a trust when the terms were affected by a mistake of law or fact. If someone with an interest in the estate asks the court to reform a trust, the court may grant the request even if the language is specific. The party asking for the reformation must clearly establish that the intent of the grantor was affected by a mistake.
Our Trust Planning Attorney in St. Petersburg Can Advise On Your Case
If you need to create a trust or modify an existing one, our St. Petersburg trust planning attorney can provide the legal help you need. At Legacy Protection Lawyers, LLP, our experienced attorneys can help you through the process and build a case that will give you the best chance of a favorable outcome. Call us now at 727-471-5868 or contact us online to request a consultation.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html
