Life happens, and sometimes circumstances arise that could lead you to want to modify or terminate a trust. Continue reading to discover the different types of trusts and the circumstances that trusts can be modified in. If you are looking to modify or terminate a trust, it is important that you reach out for assistance with an estate planning attorney. Estate planning can be complex. The responsible decisions to make is to gain some help along the way. Reach out to our firm today to learn more about our services and how we can assist you in modifying or terminating your trust.
What is a revocable living trust?
A revocable living trust determines how your assets will be handled once you have passed away. This legal document is created during your lifetime and will include assets such as real estate, investments, bank accounts, and more valuable possessions. These assets will be transferred to your designated beneficiary after you pass. These revocable living trusts can be modified or terminated at any time.
What is an irrevocable trust?
An irrevocable trust cannot be modified, amended, or terminated without the grantor’s named beneficiary’s permission. This legal document legally removes the grantor’s rights of ownership to the assets listed in the trust once they have been effectively transferred.
When can a trust be modified?
Revocable living trusts: A revocable living trust can be modified or amended while the grantor is still living and retains the capacity to amend or change the trust.
Irrevocable trust: Irrevocable trust can be modified where the trustee chooses to terminate the irrevocable living trust, only if the trust has assets equalling less than $100,000. A trustee can also terminate an irrevocable trust without the court order when the trust has become unlawful, contrary to the public policy, or impossible to achieve.
A trust can also be modified or terminated in the following circumstances:
- The court can modify the trust to enhance the material purpose if a situation arises that may not have been anticipated when the trust was drafted.
- When all of the trustees and beneficiaries agree to terminate or modify the trust to the extent that the modification or termination does not interfere with the settlor’s original material purpose of the trust, the court can modify the trust.
- When there is clear evidence of a mistake in the trust, the court can modify 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.