It used to be that once you executed an irrevocable trust, you were more or less stuck with its terms. That is no longer the case.
Irrevocable trusts are often far superior to revocable trusts for many reasons, not the least of which is taxes. However, the big drawback to irrevocable trusts is in the name. They are irrevocable. Once the trust is properly executed, it is supposed to be set in stone.
If circumstances change and you no longer like the terms of the trust, that is too bad. You are stuck with it.
This has always caused many people to be wary of irrevocable trusts, especially younger people who expect many things in their lives to change.
No need to worry? Irrevocable trusts may no longer be truly irrevocable, as Forbes explained in "Old Money, New Bottle: Decant If You Don't Like the Terms Of An Old Trust."
A total of 25 states (including Florida) now allow old trusts to be decanted.
This process entails taking all of the assets from an old trust and putting them in an entirely new trust with different terms. It is technically the trustee who is allowed to do this. It is supposed to be for the benefit of the trust beneficiaries.
Interestingly, the trustee does not need to have permission from a court and often does not even need to inform the beneficiaries. The different states that allow decanting have different rules about what trust terms can be changed in the new trust. You will, therefore, want to seek out experts to make sure you decant in a state that allows you to do so.
If you have an old irrevocable trust and would like to change the terms, you now have options. Talk to an estate planning attorney to learn more.
For more information about estate planing in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (March 16, 2017) "Old Money, New Bottle: Decant If You Don't Like the Terms Of An Old Trust."