Is it possible to change a trust after its creator has passed away? Can trust be changed after death? Unfortunately for those who stand to benefit. The answer is almost certainly “no.” Let’s take a look at how trusts work. What that means for beneficiaries after the trust creator or maker, also known as the grantor or trust maker passes away.
There are many types of trusts, but the revocable living trust, also known as a “living trust,” is the most common and well-known. Revocable living trusts, like all trusts, have three parties: the grantor; the trustee; and the beneficiary. The beneficiary, who profits from the assets in the trustee’s care. And the trustee, to whom the trustee assigns property to hold and maintain. The trust instrument is a legal document that establishes trust. It describes the parties’ rights and obligations and specifies the trust’s terms.
A person may play all three roles in a revocable living trust: grantor, trustee, and beneficiary. In most respects, the situation is similar to when the grantor owned the property in their own name. The grantor has full control and use of the trust’s assets can change the trust’s terms, and can even terminate the trust. The word “revocable” refers to the grantor’s ability to terminate, or revoke, the trust during his or her lifetime.
What Happens when the trustee Dies?
Can trust be changed after death? The grantor would name a successor trustee when establishing the trust. When the original grantor/trustee dies or becomes lawfully incapacitated. The successor trustee steps in to administer the trust.
The trust becomes irrevocable and its terms are set in stone when the grantor dies. The trust terms as identified in the trust instrument at the time of the grantor’s death control. Regardless of whether the grantor expected to alter or even cancel the trust. If the grantor had a falling out with one of his adult children. And removed her as a beneficiary from the trust shortly before his death, she would be out of luck.
If a couple creates a revocable living trust in which they both serve as grantors. The trust instrument may state that after the death of the first grantor spouse, the trust will become irrevocable. In most cases, however, the trust does not become irrevocable until the second grantor spouse passes away. If the husband dies first and the wife was aware of his desire to reinstate their daughter as a beneficiary.
Why revocable trust becomes irrevocable?
Revocable trusts allow individuals who are putting together an estate plan to keep control of their assets throughout their lives. It prevents probate for those assets after they die, and retain some control over those assets after they die. For grantors concerned about what would happen if their young adult heirs received their entire inheritance at once. A trust provides a way to care for loved ones while limiting how much money they receive at once.
A revocable trust often allows beneficiaries to be rewarded for certain behaviours. For example, if Grandma wants her grandchildren to go to college, she might set up a trust to make a distribution to them each semester they make Dean’s List or when they graduate.
One of the more significant benefits of a trust is the ability to exert some control over how trust assets are distributed to beneficiaries. If beneficiaries could get around this and make changes to the trust after the grantor died, trusts would become less appealing to many individuals.
Possible to Change a Trust After the Death?
Can trust be changed after death? The court may change a trust’s administrative or dispositive terms, or even cancel it in very limited situations. The court may adjust a trust if there are circumstances that the settlor did not or could not foresee, and altering the terms of the trust will actually further the trust’s purposes. A court adjusting the trust would do so as closely as possible to what the settlor likely expected. In addition, if continuing the trust in its current terms is impractical. Or will hinder the trust’s administration, the court may amend the trust’s administrative terms.
If a petitioner can show undue influence on the part of a beneficiary, a court may agree to adjust the dispositive terms of a trust (that is, who gets distributions, under what conditions, and how much). Such competitions, on the other hand, are uphill battles that are incredibly difficult to win. If you are a potential beneficiary or a beneficiary who does not agree with a trust’s terms, your options are likely limited.
If you’re a grantor, you can review your trust every few years when you’re still alive and competent to ensure that the terms still represent your wishes.
Author’s Note-
Upon the demise of the trust’s manufacturer or manufacturers, certain living or revocable trusts become irrevocable. This means that if the successor trustee takes over the management of the trust, it cannot be changed in any way. The main responsibility of the successor trustee is to manage the trust in accordance with the original trustee’s explicit and implied wishes.
An irrevocable trust’s beneficiaries cannot be changed, added, or removed by a successor trustee. They must never give the impression that they have the authority to do so, particularly when it comes to forcing beneficiaries to sign releases of trustee liability in exchange for distributions.
