When life circumstances change, it may become necessary to update the terms of a trust you had previously set up or terminate it entirely. The difficulty of this process depends on how the trust was created. For example, revocable trusts can be modified or terminated without notifications to beneficiaries The same is not true for irrevocable trusts.
There are legal steps that you must take to ensure a court recognizes trust modification and termination in Coral Gables. A minor error could undo these changes or leave in place a version of the trust that does not fit your needs. It is beneficial to speak with a local trust attorney to confirm you are taking the correct actions.
A number of factors could lead a person in Coral Gables to alter or even revoke an established trust. In some cases, termination occurs after the original purpose of the trust has been served. This might include an expiration after a set amount of time or due to a triggering event, like the death of the creator.
Often, it is the decision of the creator, trustee, or beneficiaries to attempt to modify the documentation or even bring the trust to an end. If the trust is irrevocable, certain steps must be met before changes are implemented.
A dedicated estate planning attorney could assist with these efforts. The reality is that changes are often possible, especially when all parties agree about the modification or termination.
Different individuals could have a variety of reasons for wanting changes made to an irrevocable trust. Circumstances can shift in the lives of the beneficiaries, for example, and one common reason is to obtain some kind of tax objective. If there is no longer a risk of an estate tax obligation upon a person’s death, they might rethink their trust entirely. Other reasons include the following:
No matter the reason, the process for achieving a trust modification or termination is the same.
There are different ways for interested parties in Coral Gables to terminate or modify an irrevocable trust. Although these devices are intended to remain unchanged after they are created, the law allows for alterations under certain scenarios.
If the person who creates the trust—the settlor—has passed way, the courts have flexibility when it comes to making these changes. Either a beneficiary or the trustee can file a petition with the court for modification or termination. Often, the party filing the petition must prove to the court that the settlor’s purpose is no longer being fulfilled.
Options that do not involve court intervention are also a possibility. While it can be difficult for the trustee and beneficiaries to act on their own, that is not the case when the settlor is still alive and agrees with the modification or termination. If the settlor and all beneficiaries unanimously agree, they can alter the terms of the trust without court approval. However, they will need the guidance of an experienced trusts attorney.
There are serious risks that come with attempting to resolve your estate planning issues without the support of legal counsel. A dedicated Coral Gables attorney like Ana M. Veliz could help you avoid the mistakes that would put your trust modification and termination at risk. Call us as soon as possible to discuss your options.
We evaluate your case and determine how we might be able to help.
We will meet with you to discuss your next options and lay out a plan.
Our team guides you throughout the process so you feel confident about your choices.
(305) 250-9917