Life can upend and alter even the best-laid estate plans. While irrevocable trusts are intended to be unchangeable, under the right conditions, settlors may be able to amend or even terminate the trust. Changing an irrevocable trust

Changing or Terminating an Irrevocable Trust in California

People have a variety of reasons to amend an irrevocable trust. For example, tax laws may have changed since the trust was established; a beneficiary became disabled; or a divorce, death, or other unexpected life event took place.

The simplest way for the trustor or other interested party to challenge the terms of an irrevocable trust is to petition the court to recognize that, due to circumstances not known or anticipated by the settlor, the continuation of the trust would “defeat or substantially impair” its purposes. California’s Probate Code otherwise allows for an irrevocable trust to be changed or terminated if all of the following parties agree to the change:

  • The trustor, if still alive
  • The trustees
  • The beneficiaries, whether named or referred to as a category (for example, “the heirs” or “next of kin”)

Why the Court May Refuse to Terminate an Irrevocable Trust

  • The continuation of the trust is necessary to fulfill the material purpose of the trust.
  • The material purposes of the trust outweigh the reasons or need for modification.

So, while California law does allow for the modification of termination of irrevocable living trusts, modifying such a trust in any way always involves some level of judicial oversight. Since the court could refuse to authorize any change to an irrevocable trust even if the settlor is still alive, petitioners should be prepared to provide compelling reasons why the trust needs to be amended.

Contact a California Estate Planning Attorney

The Law Firm of Kavesh, Minor & Otis, Inc. has decades of experience helping Californians of all backgrounds protect their estates from uncertainty. Please send our attorneys a message online, or call us at 1-800-756-5596 to schedule your free, no-obligation consultation as soon as possible.

 

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
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