Trusts effectively transfer assets from one party to another outside the probate process and are free from taxation. A trust is a permanent document that retains its legal effect until a person’s funds run out or the terms of the document end.
However, as with any legal agreement, trusts can be modified or terminated. This most commonly occurs when all parties to the trust agree that a change is necessary or the terms of the document are no longer valid. Sometimes, individuals can petition the court to change or end a trust.
Trust modification and termination in Rosemead require an understanding of specific laws. Fortunately, a seasoned trust attorney could provide essential guidance when you or your family member intend to take this step.
Changing or Terminating a Trust Through the Consent of Parties
Trusts are agreements between specific parties: the trustor agrees to forfeit ownership of assets and transfer them to another person. The other must wait until the designated time to take ownership of the assets. Each party involved in the trust holds power to change the terms of this agreement as they see fit.
According to California Probate Code § 15403, parties to a trust can petition the court to terminate the agreement, even if the trustee disagrees. In addition, it is possible to change or even terminate a trust when all parties agree concerning said modification. These changes may necessitate creating a document outlining the new terms. A hardworking attorney in Rosemead could take the lead in gathering the parties to a trust and negotiating a trust adjustment or termination.
Who Can Modify or Terminate Trusts?
Often, the parties to the trust might not agree to a modification or a termination. In these cases, the parties still have an obligation to fulfill their roles in the trust and must wait out the length of the agreement. However, the trust may no longer be feasible in the eyes of the law—for example, when a trustee cannot perform their role or beneficiaries cannot take control of the assets.
In each scenario, the party can ask the court to intervene to modify or terminate the trust. However, the court only has this authority when the trust’s language indicates that a mistake occurred, negating the document’s purpose. The death of a sole beneficiary is an example.
In addition, the court will only invalidate a trust with proof that the document is longer feasible. In Rosemead, the parties looking to modify or terminate a trust bear the burden of proving that the ineffectiveness of the document was not apparent when it was created. A legal representative could help these parties take their case to court and fight for a fair outcome.
Call an Attorney in Rosemead to Discuss Trust Modification and Termination
One of the appealing qualities of trusts is that they remain in effect regardless of a person’s wishes or potential complications. However, when life circumstances change, you may be motivated to seek a modification in a current trust or end the arrangement entirely. When this occurs, you should explore your options for trust modification and termination in Rosemead.
If all parties to a trust agree, these changes can move forward with minimal time spent in court. It is when only one party wants to make a change that a more significant legal proceeding will take place. An attorney could help with this process. Call today.