In essence, revocable and irrevocable trusts share several similarities. In both cases, the person creating the trust (settlor or grantor) must draft a document (trust agreement) with specific instructions governing the trust administration.
Additionally, the trust agreement must include provisions regarding the possibility to change, amend, or revoke the trust – and this is the most complex aspect of irrevocable trusts.
As a consequence, are there circumstances that permit a settlor to modify an irrevocable trust in Florida? Keep reading to find out.
How Do You Modify an Irrevocable Trust in Florida? – An Honest Viewpoint
Although it is not possible to predict the future, it is possible to draft an irrevocable trust agreement with specific instructions in the event you need to modify, amend, or revoke the trust sometime in the future.
Considering the strict nature of irrevocable trusts, no one should even consider setting up this type of legal arrangement before sitting down to discuss the case with an expert estate planning attorney.
Ultimately, modifying an irrevocable trust depends on how the trust agreement was structured, especially which events could trigger a trust modification. Hence, the key is creating a trust document with provisions that allow different types of modifications.
Structuring the Ideal Irrevocable Trust Agreement – What Terms Should I Include in the Document?
How a Trustee or Beneficiary Can Modify the Trust
Ideally, an irrevocable trust agreement should have built-in instructions outlining how a trustee or a beneficiary to the trust can modify the arrangement.
Many people set up irrevocable trusts to reduce tax liability, such as charitable trusts. In such cases, the trust agreement has specific language that permits modifications or amendments in the event of changes in tax law.
Also, it is possible to work with an estate planning attorney to build a trust agreement granting the trustee or a beneficiary the “power of appointment.” Therefore, that person is granted lifetime authority to modify the trust, as long as the change benefits the future and current beneficiaries in the arrangement.
Designation of a Trust Protector
Similarly, it is possible to structure a trust agreement to designate a person as a “trust protector.” Hence, the person appointed as the trust protector has the power to decide whether a proposed modification may be accepted.
It is crucial noting that the person named as a trust protector cannot be someone who would serve neither as a trustee nor as a beneficiary. Instead, the trust protector must be an independent person named either by the trustee, the beneficiaries, or the court.
It Is Possible to Modify an Existing Irrevocable Trust?
If an irrevocable trust agreement has no specific language regarding the modification of the trust, there are still a few options available. However, the lesser the instructions provided in the trust document, the lesser the options to modify an existing irrevocable trust.
To modify an existing trust, the interested party must file an action in court and ask the judge to change or amend the irrevocable trust. Winning this type of case in court is virtually impossible without expert legal guidance, as the reasons to justify the modification must be reasonable and persuasive to convince the court.
If the intention of the modification is terminating the trust, it is possible to defund the arrangement by taking all the assets held in the trust out. This way, once there are no assets held in the irrevocable trusts, the arrangement is terminated.
Do You Need to Modify an Irrevocable Trust in Florida? – Immediately Contact an Expert Attorney
As it is plain to see, modifying an irrevocable trust is a complex task. Waste no time with uncertainty – call Attorney Romy B. Jurado today at (305) 921-0976 or email [email protected] to schedule a consultation.