Can you modify a trust?

Several years ago I witnessed elder law attorneys who work with special needs children and disabled adults become upset about a uniform law that most people thought was a good thing. I did not understand their concern at the time and do now but their worries were for nothing. As it turned out, the problem they expected did not come about and the law has been very helpful.

The law in question is the Uniform Trust Act which, in its Pennsylvania version, was adopted in 2006. It allows more flexibility when it comes to trusts than the laws it replaced. Trusts, even irrevocable trusts, might now, under some circumstances, be modified, reconfigured or even dissolved and some actions may be taken without going to court. It might be said that no trust is truly irrevocable and unable to be modified in all circumstances. This is a good thing because often conditions change over time. If the maker of the Trust could have known everything that would come later, he or she might not have included the offending provisions.

The reason the special needs lawyers were worried is that Special Needs Trusts (also known as Supplemental Needs Trusts), the trusts that preserve funds and still allow qualified beneficiaries to be approved for and continued on Medicaid, must be irrevocable. As matters stand now, the government still accepts Special Needs Trusts if they contain the proper irrevocable language and provisions even if the state in which the parties reside has adopted the Uniform Trust Act.

The question for most people is why might they care about the Uniform Trust Act? Here are some examples. You might be the beneficiary of a trust established long ago by a grandparent that has very restrictive provisions on distributions or the administrator of your trust could be a financial institution that has changed hands many times or is located in another state and is unresponsive or you disagree with investment decisions and you and other beneficiaries want to retain another trustee. There are now specific rules that provide a road map how to do this.

If the grantor, the person