Amending an Irrevocable Trust Agreement & Uniform Trust Code

By John Cromwell

Trust law varies based on the state where the trust is located. The Uniform Trust Code (UTC) is a proposed law meant to be enacted across the country to promote legal consistency regarding trusts. The UTC has been enacted in 23 states and covers most trust issues, including how to amend an irrevocable trust agreement. Under the UTC, an irrevocable trust agreement can be amended when the beneficiaries and creator agree to an amendment or when there is a significant change in circumstances surrounding the trust. When attempting to amend an irrevocable trust agreement, consider consulting with a licensed attorney.

Define Irrevocable Trust

A trust is a relationship created by someone who donates property for the benefit of others. The donated property is held and managed by a third party, or trustee, for the advantage of the beneficiaries. This means that while the beneficiaries get the profits generated by the property, it is the trustee that controls the property and maintains it. The trustee is required to manage and distribute the property based on the standards established by the donor when he created the trust. An irrevocable trust prevents the creator of the trust from unilaterally changing any of the trust’s terms. This means he cannot change the beneficiaries, alter the trust’s purpose, or name a trustee on his own initiative. The creator of a trust may make it irrevocable in order to reduce his income or estate tax.

Amend by Consent

While a creator of a trust cannot unilaterally amend a trust, an irrevocable trust can still be amended under the UTC if all of the beneficiaries and the creator agree to the change. If these parties agree, any amendment can be made regardless of whether the amendment conforms to the original purpose of the trust. If all of the beneficiaries agree and the creator is either unavailable and does not agree, the trust can still be amended under the UTC. However, an appropriate court must find that the amendment is consistent with the original purpose of the trust.

Protect your loved ones. Start My Estate Plan

Unanticipated Circumstances and Ineffective Administration

Sometimes during the term of a trust, circumstances can arise that the creator of the trust did not anticipate. In that case, the court may amend the trust if doing so would further the trust’s purpose or make the administration of the trust more practical and less wasteful. Any trustee or beneficiary may initiate a court proceeding to modify the trust in these circumstances.

Uneconomic Trust

If the value of the property becomes so minimal that the current expenses of administration are comparatively excessive, a court may amend the trust. Again, any trustee or beneficiary may initiate a court proceeding to modify the trust when the value of the trust property decreases significantly.

Protect your loved ones. Start My Estate Plan
How to Amend a Trust to Reinstate Prior Provisions


Related articles

What if You Violated an Irrevocable Trust?

The person appointed to oversee an irrevocable trust must act according to the terms of the trust and in the best interest of those who benefit under the trust. While all states recognize this duty, the type of recourse available in cases of breach can vary. Knowing when you may petition the court for removal of a trustee and when he may be personally liable for financial losses will help ensure that your trust operates according to the wishes of its creator.

How to Dissolve Inheritance Trust

An inheritance trust, usually called a testamentary trust, is a trust that is created by language contained in the last will and testament of the trust grantor. Since the trust does not go into effect until the grantor dies, it is considered an irrevocable trust under state probate law. Although the basic principles applicable to the termination of a testamentary trust are accepted by all states, procedures and details vary from state to state.

North Carolina Law on Irrevocable Living Trusts

In North Carolina, irrevocable living trusts can be established during a person's lifetime, often for estate planning purposes. In contrast to revocable trusts, irrevocable trusts typically may not be withdrawn or modified once they are created. However, North Carolina law provides some flexibility to this rule, usually when certain actions are necessary to fulfill the purpose of the trust or all persons affected by the trust consent to the action.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help. Wills & Trusts

Related articles

Amending a Florida Trust

A trust is an instrument that allows one party, known as the settlor, to contribute assets to the trust and to name ...

Requirements for a Irrevocable Family Trust Agreement

An irrevocable trust is an arrangement whereby a grantor relinquishes legal ownership of property and places it under ...

Irrevocable Family Trust Laws in Massachusetts

An irrevocable family trust can be effective estate planning tool. When an individual establishes this type of trust, ...

How to Change an Irrevocable Trust

In theory, when you create an irrevocable trust, it cannot be canceled or changed; that’s the meaning of “irrevocable.” ...

Browse by category
Ready to Begin? GET STARTED