is an instrument designed to facilitate the transfer of property from one person to another. The trust documents are drafted by the settlor, who will authorize a trustee to hold the properties for distribution to beneficiaries.
Generally speaking, trusts are usually modified by the settlor (the person who created the trust). Other parties may also modify a trust, including:
- Beneficiaries: In some jurisdictions, beneficiaries have the power to modify a trust document after it has been finalized. All beneficiaries must consent to the modification. The modification must not frustrate the overall stated purpose of the trust.
- Trustees: Trustees have no power to modify or terminate a trust except as specifically provided in the trust documents. However, if a settlor objects to a lawful distribution by the trustee, it may be evidence of defeating the trust purpose
- Court-ordered Modification: A judge has power to modify a trust if the trust’s purpose has become illegal or impossible to perform, or if the trust purpose has already been completed. The judge will modify the trust to reflect the original intentions as much as possible.
According to trust laws, trusts may either be revocable
. Revocable trusts may be modified or cancelled at any time by the settlor. Irrevocable trusts may not be modified except with the consent of the settlor and all beneficiaries. Laws governing these distinctions will vary by state; consult with a lawyer for the particular details of your state’s trust laws.
Can a Trustee accept Trust Modifications?
A trustee can sometimes accept or reject modifications to a trust. This is because the trustee is considered to be neutral party whose role is to prudently manage the trust funds. Trustees may accept a trust modification through the following actions:
- Signing the modified trust instrument or signing a separately written acceptance
- Knowingly performing duties or exercising trustee powers according to the modified trust instrument, except where such actions would risk damage to the trust assets
What Trust Terms may be Modified?
Any trust terms may be modified, so long as they conform to the principles stated above. Modified terms usually deal with distributions, naming trustees and beneficiaries, and listing trust assets.
If there are disputes over modifications, a court may intervene in order to determine which terms may be modified. Courts have much leeway to interpret trust provisions. However, a judge will usually lean in favor of preserving the original purpose of the trust as stated in the documents.
Do I need a Lawyer for Trust Modifications?
If you are involved in a trust modification, it is a good idea to have a lawyer present to oversee the process. Trust modification issues are very important and can significantly influence the outcome of property distributions. Whether you are acting as the settlor, trustee, or a beneficiary, an estate lawyer
will be able to guide you through the process according to the laws of your state.