Your trust may require modification or termination as your life progresses and changes. To discover the difference between a revocable living trust and an irrevocable trust and the ways you can modify or terminate each type of trust, continue reading.
If you require assistance with this process, do not hesitate to contact our experienced Montgomery County estate planning attorney. Our legal team is prepared to walk you through the process with your best interests in mind. Estate planning can be complicated. You do not need to go through these steps on your own. To avoid making mistakes, give our firm a call today. We are looking forward to hearing from you.
What is a revocable living trust?
A revocable living trust determines how your assets are handled after your passing. This written document can include assets such as valuable possessions, bank accounts, investments, and real estate. A revocable living trust is created during your lifetime. The assets are transferred to your designated beneficiary after you die. It is possible to cancel or change a revocable living trust at any time.
What is an irrevocable trust?
An irrevocable trust’s terms cannot be modified, terminated, or amended without the grantor’s named beneficiary’s permission. Once the grantor has effectively transferred all ownership of assets into the trust, they legally remove all of their rights of ownership to the assets and the trust.
When can a trust be modified?
As long as the grantor is alive and retains the capacity to change the trust, a revocable living trust can be amended or modified. An irrevocable trust can be modified where the trustee chooses to terminate the irrevocable living trust if the trust has assets equalling less than $100,000. A trustee is also able to terminate an irrevocable trust without the court order if the trust becomes unlawful, contrary to the public policy, or impossible to achieve.
If there is clear evidence of a mistake in the trust, the court can modify the trust. The court can also modify a trust to enhance the material purpose if a situation arises that may not have been anticipated when the trust was drafted. A trust can be modified when all of the trustees and beneficiaries agree to terminate or modify the trust to the extent that the action does not interfere with the settlor’s original material purpose of the trust.
Contact our experienced Montgomery County, Maryland firm
The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.