Trusts are among the most popular tools for transferring property from one person to another. They are a beneficial tool after a person’s passing, as they can avoid the probate process and reduce tax obligations.
As circumstances change, an individual’s estate planning needs can also shift. It may be time to consider trust modification and termination in Tustin in those situations. Let a dedicated trusts attorney advise you on these crucial changes today.
The Right to Modify a Trust
The ability to modify or end a trust in Tustin largely depends on its type. As the name suggests, revocable trusts are much easier to alter than irrevocable trusts. When revocable, trust creators can change the terms at will for as long as they are alive. This process is not so simple when the documentation includes irrevocable terminology.
It is possible to alter trusts, even those that are irrevocable, under certain circumstances. For example, a person could terminate these entities if the original purpose can no longer be performed. This might involve a trust with a deceased sole beneficiary.
Before these alterations can be made, legal action must be taken. A judge has the power to make these changes or even end a trust entirely, but only if they are persuaded that it is appropriate based on the terms of documentation.
Why Make Modifications to a Trust?
There are different reasons why a trustee or beneficiary might want to alter the language of a trust document. Often, these maneuvers are administrative in nature. They might be to clear up mistakes, like misspellings, wrong addresses, or juxtaposed numbers.
However, not all alterations are so simple. Sometimes, changing the parties or dramatically altering how funds are distributed may be necessary, including removing a beneficiary entirely or reorganizing how funds are split up.
Changes are often needed when a trust holds something other than money, such as real estate or other holdings. Replacing the trustee or altering their duties may even be required.
Some modifications must be implemented due to changes in tax law. Many people use these tools as part of their estate plan specifically to reduce their obligation to the IRS, so it should be no surprise that this might be a catalyst for change.
Reasons to Terminate a Trust
Ultimately, a trust might need to be terminated when it is no longer able to serve its intended function. This could happen when a charity beneficiary of a trust becomes insolvent and closes.
Revocable trusts can be terminated, but ending the irrevocable variety usually requires the consent of all parties, including the creator, trustee, and beneficiaries, when applicable. It may be possible to end a trust even when one party disagrees, but a court order will be necessary.
A knowledgeable legal professional in Tustin could provide more information about the legal requirements for modifying or terminating a trust.
Talk to an Attorney in Tustin About Trust Modification and Termination
One of the primary draws of trusts as estate planning tools is their long-lasting nature. However, the ability to alter them is also helpful. If you have questions about trust modification and termination in Tustin, do not hesitate to contact our law firm today.
Reach out as soon as possible for a private consultation with one of our diligent estate planning attorneys at Amity Law Group, LLP.
