Trusts are designed to last your lifetime and beyond, but they may no longer meet their original purpose over time. Your ability to modify or terminate this entity depends on the type of trust you originally selected.
Making these changes can be challenging, especially on your own. Let a dedicated trusts attorney advise you on trust modification and termination in Upper Marlboro and Largo.
When Trusts Can Be Modified
The nature of a trust determines when and if it can be modified. Some options, including revocable living trusts, are designed to be freely altered by the creator at any point. The only requirement for the creator to modify a revocable trust during their lifetime is exhibiting the mental capacity to understand the ramifications of this change.
Modification to an irrevocable trust is more challenging. The courts must be involved in this process for it to be valid. For instance, judges can modify terms if there is clear and convincing evidence of a mistake that goes against the creator’s intent. It is also possible to petition the court to modify or terminate a trust because it has become contrary to public policy.
Some of these modifications can seem subjective. For example, an interested party may petition the court to alter the terms due to unanticipated circumstances. This is possible when a change is the only way to enacting the creator’s original wishes.
There are limited options for achieving this outcome without the need for court intervention. To bring a trust to an end without approval from a judge, all parties will need to agree. The creator and all beneficiaries must unanimously agree to terminate the trust. This agreement to modify or terminate the trust in Upper Marlboro must be in writing, signed by all the parties, and notarized to have any legal effect.
Termination Options
Terminating an irrevocable trust is not a simple process. Generally, the rules for ending a trust follow the same rules as modification. However, there might be some additional considerations.
Some trusts, even those that cannot be revoked, come with a specified termination date. According to the terms of the documentation, a specific date or event could trigger the end of the trust. A common example is when all beneficiaries reach a certain age. Outside of this, court intervention is usually necessary to terminate a trust in Upper Marlboro.
Different methods are available for dissolving revocable trusts. The creator can remove all the assets, transferring ownership elsewhere. It is also possible to draft a document revoking all the terms and agreements. Finally, the creator could draft a will that overrides the terms of the trust and divides the property in a different way upon the creator’s death.
Talk to an Attorney in Upper Marlboro About Trust Modification and Termination
Although trust modification and termination in Upper Marlboro is not always necessary, there are some situations where the status quo no longer meets the creator’s original needs. Making changes may be an option, especially with court approval. A dedicated attorney could help with every step. Call today to learn more.
