Planing Ahead

Suppose the person who established the trust has died. Many trusts become irrevocable on death of the trustor for the simple reason she cannot modify it after she died. But what if all the beneficiaries agree the trust should be changed?

If the person who established the trust is still living and all the beneficiaries agree, many trusts can be changed without a court proceeding being involved. If the trustor, the person who established the trust is deceased, there is still a way to modify a trust in many cases, even a so-called irrevocable trust.

The Uniform Trust Act, which in its Pennsylvania version was adopted in 2006, allows more flexibility when it comes to trusts than the laws previously allowed and it states specifically the procedure to follow in certain circumstances. Now, even irrevocable trusts might under some circumstances be modified, reconfigured or even dissolved. 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.

Revocable trusts can be modified at any time during the lifetime of the maker.

However, 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 who established the trust is still living, many provisions of a trust may be changed by written agreement of the grantor and all the living beneficiaries without going to court.

The trust may have been drafted in such a way that, with changes in the law, it can no longer accomplish its goals. The law states that a court may modify the administrative or dispositive provisions of a noncharitable irrevocable trust, make an allowance from trust principal or terminate the trust if because of circumstances that apparently were not anticipated, trust purposes would be furthered by making the change (Section 7740.2, UTC Section 412).

Under the Uniform Trust Act, notices to beneficiaries and agreement among the parties may save time in court in some cases and provide more flexibility to beneficiaries and their families.

Janet Colliton, Esq. is a Certified Elder Law Attorney and limits her practice to elder law, retirement and estate planning, Medicaid, Medicare, life care and special needs at 790 East Market St., Suite 250, West Chester, Pa., 19382, 610-436-6674colliton@ collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, cofounder of Life Transition Services LLC, a service for families with long term care needs. Tune in on Wednesdays at 4 p.m. to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care.