Irrevocable trusts can be a bit tricky. In one way, it is just like other trusts. You, as the “grantor” or “settlor” (i.e., the person who creates the trust and puts assets – financial, real estate, or otherwise – into the trust), can fund the trust as you see fit. You can provide instructions on how the trust is to be administered. You can also give instructions on how the assets in the trust are eventually distributed to the trust beneficiaries.
Yet, the fact that the trust is “irrevocable” adds a facet that could prove difficult. In short, creating an irrevocable trust has some benefits that other trusts do not have. An experienced estate planning attorney can go through all the reasons why an irrevocable trust might be advantageous for you.
An irrevocable trust, however, is just that – “irrevocable.” It generally cannot be rescinded or changed. Life changes occur all the time though – divorces, grandchildren, etc. – so down the road, you might find yourself in a place where you want to do an irrevocable trust modification in Florida or some other jurisdiction. That is when you need to consider how to modify an irrevocable trust.
Thus, in this article, we will talk about the main ways in which you can do an irrevocable trust modification in Florida. Remember, you would be wise to consult with an estate planning professional when considering your options.
At Doane & Doane, PA, we are passionate about giving our clients the personalized legal counsel they need to appropriately take care of many major life and death decisions, such as estate planning. So, to answer your estate planning questions after you read this article, we welcome you to consider contacting us at Doane & Doane, PA for estate planning advice and services. You can contact us today at 561-656-0200 or fill out our online contact form.
The Key to Irrevocable Trust Modification in Florida – Planning Ahead
As noted above, things change during the course of your life. Most times, you will not be able to predict those changes. For that reason, you would be smart to create a mechanism that allows for irrevocable trust modifications before you need them.
In other words, even though cannot predict the future, you can build into your irrevocable trust a set of instructions that can be triggered if you do, in fact, need to modify the trust sometime in the future.
Thus, irrevocable trust modification is less about undoing a trust you created a long time ago, and more about creating a trust that has provisions that allow for many types of modifications.
Here are the common provisions that can be built into an irrevocable trust to allow for future modifications.
1. Modifications by Trustee or Beneficiary
Seasoned estate planners who draft irrevocable trusts will likely recommend that the trust has instructions built-in that explains precisely how the trustee (the person responsible for administering the trust) or a trust beneficiary (a person who will ultimately receive the proceeds of the trust) can modify the trust. In fact, many charitable trusts are created as irrevocable trusts, and they normally have language in them that allows for modifications whenever the tax law changes.
2. Modifications by “Power of Appointment”
An irrevocable trust can be fashioned to give the trustee or a beneficiary the “power of appointment.” That means that the person has a lifetime authority to make modifications to the terms of an irrevocable trust for the benefit of future and current beneficiaries.
3. Modifications by a “Trust Protector”
Similar to a power of appointment, irrevocable trusts may be drafted to include a person whose responsibility is to be a “trust protector.” That means that he or she has the power to say yes or no to any proposed modifications to an irrevocable trust. A trust protector is not someone who would also serve as the trustee, or be a beneficiary. Rather, a trust protector is an independent third party who is appointed by the trustee, by the trust beneficiaries, or by the court.
What If You Did Not Think Ahead, and You Want to Modify an Already-Existing Irrevocable Trust?
If you are reading this article because you already have an irrevocable trust without the provisions discussed above, but you are in a situation in which you need to modify the trust.
Well, you still have options.
First and foremost, you can simply institute an action in court, and ask the court to amend an irrevocable trust. If your reasons for modification are reasonable and persuasive to the court, then the court will have the power to make irrevocable trust modifications in Florida.
Next, you can terminate the trust, by defunding it. By taking the assets out of the trust, it ends the trust, which is the most final form of modification.
Look to Doane & Doane for Help with Irrevocable Trust Modifications in Florida
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 Wills and Trusts Attorneys West Palm Beach help people plan for retirement, 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’ trust and estates.
Call us at Doane & Doane, P.A. to help you if you are faced with a probate matter, or if you would like estate planning services in Florida. You can reach us at 561-656-0200. Call us today.