3 Examples of When an Irrevocable Trust Can – and Should – Be Modified
Did you know that irrevocable trusts can be modified? If you didn’t, you’re not alone. The name lends itself to that very belief. However, the truth is that changes in the law, family, trustees, and finances sometimes frustrate the trust maker’s original intent. Or, sometimes, an error in the trust document itself is identified. When this happens, it’s wise to consider trust modification, even if that trust is irrevocable. Here are three examples of when an irrevocable trust can, and should, be modified or terminated:
Posted on April 18, 2016
1. Changing tax law. Adam created an irrevocable trust in 1980 which held a life insurance policy excluding proceeds from his estate for federal estate tax purposes. Today, the federal estate tax exemption has significantly increased making the trust unnecessary.
2. Changing family circumstances. Barbara created an irrevocable trust for her grandchild, Christine.Now an adult, Christine suffers from a disability and would benefit from government assistance. Barbara’s trust would disqualify Christine from receiving that assistance.
3. Discovering errors. David Sr. created an irrevocable trust to provide for his numerous children and grandchildren. However, after the trust was created, his son (David Jr.) discovered that his son (David III) had been mistakenly omitted from the document.
Are You Sure Your Trust is Still Working for You?
If you’re not sure an irrevocable trust is still a good fit or if you wonder whether you can receive more benefit from a trust, we’ll analyze the trust. Perhaps irrevocable trust modification or termination is a good option. Making that determination simply requires a conversation and a look at the document itself. Please call our office now to schedule a chat.
More from our blog…
Capacity Requirements for Executing Estate Planning Documents
Proper execution of a legal instrument requires that the person signing have sufficient mental "capacity" to understand the implications of the document. While most people [...]
What You Should Know About Long-Term Care
Research shows that roughly one in seven adults aged 65 or older will need long-term care at some point in their later years. Meanwhile, tens of millions [...]
Understanding Medicaid: What Does Medicaid Cover?
In the complex and frequently changing landscape of health care in the United States, Medicaid stands out as a vital program. Since 1965, it has [...]
Elder Financial Abuse: How an Elder Law Attorney Can Help
Elder financial abuse is a significant issue affecting many older adults nationwide. It involves someone exploiting or misusing an older person’s finances or assets for [...]
Recent blog posts
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five