It’s in the name “irrevocable” trusts are, not surprisingly, irrevocable. That is, they cannot be normally changed or amended. So, when asking the question “can you change beneficiaries in an irrevocable trust?” the answer is generally “no” you normally cannot change the aspects of an irrevocable trust, like changing beneficiaries. However, as with many things, there are always certain exceptions.
Luckily, we at Doane & Doane know a little about trusts and other estate planning vehicles, and we are ready to help you with any kind of advanced estate planning you may need. In fact, we are truly delighted to help anyone interested in knowing more about, or possibly wanting to create, an irrevocable trust. We believe that they are amazing estate planning tools for many people.
Also, with Doane & Doane, you are not only getting top-notch representation, but you can benefit from our experience handling estate plans and irrevocable trusts for countless clients. Let us give you the sound advice you need when handling one of the most important facets of your life – your financial future. We invite you to call us today and set up a free consultation regarding irrevocable trusts or any estate planning issues that are on your mind.
In this article, we will refresh you on the basics of what an irrevocable trust is, and then, we will dive into the subject of showing how you may be able to get a qualified “yes” to the question “can you change beneficiaries in an irrevocable trust?” If, after reading this article, you have additional questions on getting your own estate planning started, then we welcome you to contact the Palm Beach County lawyers at Doane & Doane, PA. Call today at 561-656-0200 or fill out our online contact form.
Irrevocable Trust Basics
There are generally two types of trusts – revocable and irrevocable.
If you have put assets into a trust and you keep control over that trust (in other words, you make yourself both the grantor who creates the trust and the trustee with the authority to manage the trust assets), then you have created a revocable trust. It is revocable because you, as the grantor, still own the property in the trust, and thus keep a certain amount of control over it. Also, you are taxed on any trust income because you have the power to eliminate, or revoke, the trust at any time.
By contrast, if you create an irrevocable trust, then you are not able to act as the trustee of that trust. You relinquish authority to manage those funds. Indeed, in creating an irrevocable trust, you as the grantor have the ability to appoint a trustee who will manage the property in the trust. That is, however, the only power you have over that trust moving forward. Also, any income earned by the irrevocable trust is not taxable to you as the grantor. In addition, any of your creditors cannot access those trust funds.
Simply put, with an irrevocable trust, you lose your ability to manage the assets in the trust. As compensation for that, you no longer have to worry about being taxed on any trust income, and the property is safe from creditors who are looking to collect any liabilities from you or your estate.
Different Types of Irrevocable Trusts
Knowing the difference between revocable and irrevocable trusts, it is worthwhile to know the difference between various types of irrevocable trusts.
1. A bypass trust will hold the assets for the benefit of a surviving spouse when you pass away.
2. A charitable trust, which is a somewhat popular type of trust for wealthier clients, will transfer the grantor’s property to charity at the time of their death.
3. Finally, there is a special needs trust, which provides for disabled family members if they might lose government benefits due to an inheritance at the time of your passing.
Now, let us deal with the important question at hand . . .
Can You Change Beneficiaries in an Irrevocable Trust?
The answer to that question can be “yes,” based on your timing. If you are the grantor of an irrevocable trust, then once you create the trust – designate the trustee and beneficiaries, etc. – it becomes very difficult to change beneficiaries.
However, if you have yet to create the trust, then you can place a mechanism or provision in the trust documents that may allow your trustee to make certain modifications, such as a change in beneficiary.
Otherwise, you as the grantor may not change beneficiaries after the fact, but you may be able to convince the trustee of the trust, whom you designated, to petition the court to change beneficiaries.
Finally, there is an ultimate way to ensure that a beneficiary does not benefit from a trust by terminating the trust altogether. Even though you, as a grantor of the irrevocable trust, cannot make direct changes, you can simply defund (or remove all the assets from the trust), thereby indirectly terminating the trust.
Learn What Your Options are Regarding an Irrevocable Trust with Doane & Doane
Founded in 2003 by husband and wife legal team, Randell C. Doane and Rebecca G. Doane, Doane & Doane provides legal and financial services to families, individuals, and businesses throughout Southeast Florida.
Estate planning is about much more than just giving away property. It is an act of love and kindness, with the ultimate goal of providing for the future financial security of your loved one. At Doane & Doane, our tax and estate professionals help people plan for retirement, consider various types of wills and trusts, make provisions for loved ones, figure out future child support, and minimize tax liability. Experienced wills and trusts attorneys know which tools to use to get the best results for their clients. Our lawyers can help you determine which tools are best suited to your specific circumstances.
When it comes to probate matters, such as the formal administration of an estate, Florida fiduciaries seek the assistance of the attorneys at Doane & Doane, P.A. to administer and manage their trusts and estates. Notably, the founding partners of Doane & Doane are board-certified West Palm Beach Probate Attorneys. With the additional advantage of certified public accountancy in their backgrounds, they present a unique combination of skills and experience which enables them to effectively settle, administer, and manage clients’ trusts and estates.
Since the day we opened our doors, we have worked hard to earn a reputation as one of the region’s most prominent tax and estate planning law firms in Palm Beach County, Florida. Our dynamic team includes the firm’s founding partners, experienced associate attorneys, and an outstanding team of paralegals, legal assistants, and support
Call the Palm Beach County lawyers at Doane & Doane, P.A. You can reach us at 561-656-0200. Call us today.