The steps for trust modification are generally the same regardless of whether you are creating new terms for the trust or reinstating prior provisions. The process of modifying a trust hinges on the type of trust it is and who wants to amend the terms. Depending on the circumstances, the creator of the trust, parties to the trust, or a local court can reinstate the prior provisions. The laws regarding a trust vary based on the state where the trust is located, although 23 states have adopted the Uniform Trust Code. If you wish to modify a trust, consider reviewing your state’s laws or consulting with an attorney.
A revocable trust allows the original creator of a trust to modify its terms unilaterally. Generally, the amendment is required to be in writing and signed by the creator of the trust in the presence of witnesses. The amendment might also need to be notarized. The amendment should reference the section in the original trust that gives the creator the right to modify the trust. The document should also specifically identify which sections of the trust are being modified and the prior provisions that are to be reinstated.
Beneficiary and Creator Agreement
In some states, a prior provision can be re-adopted if the creator of the trust and all of the beneficiaries agree to the revision. The creator's agreement can be obtained several ways. The creator herself could agree. Sometimes the creator may grant someone power of attorney to act on her behalf with regard to the trust. The agent may consent on the creator's behalf, but only if the power of attorney document explicitly grants the agent the ability to agree to a modification. If the creator of the trust has a conservator or guardian, that agent may agree to any changes in the trust so long as an appropriate local court also approves the modification.
In some states, prior trust provisions can be reinstated if all of the trust’s beneficiaries agree. The beneficiaries must petition the appropriate court for approval to modify the trust. The trust can be modified only if the court finds that the proposed reinstatements would not be inconsistent with the material purpose of the trust. If only some of the beneficiaries want to reinstate prior provisions, some states still allow their courts to modify the trust. However, the reinstatement must still comply with the trust’s purpose and the court must find that the interests of the disagreeing beneficiaries are protected.
In some states, a judge may reinstate prior provisions of the trust for several reasons. If the circumstances surrounding the trust change or the trust as currently instituted cannot be administered, a court may modify the trust. If the trust is too costly to administer as currently defined, the court may reinstate prior provisions that decrease the expense.