Can Irrevocable Trusts Be Revised in Virginia?

Trustee or Beneficiary Modification:   

 

By definition, an irrevocable trust is just that – irrevocable.  However, under certain circumstances a family will be able to revise an irrevocable trust so that they are not stuck with antiquated language that no longer serves the family’s best interests.  Below, are certain legal steps that can be taken to either amend or terminate a trust document.  

 

Some irrevocable trusts (usually those drafted by an attorney) are written with instructions to the trustees or beneficiaries allowing the terms of the trust agreement to be modified or changed under specific and limited circumstances.  

 

Attorneys usually try to build flexibility into trust documents to ensure that future generations will be able to deal with the modern and present day issues confronting them.  Below are three simple provisions that an attorney might include in a trust document that are helpful if you want to be able to modify the trust in the future: 

  • A simple power granted to a trustee to revise the trust’s terms or provisions.
  • Appointment of a trust protector who is given the authority to take care of reforming the trust.  Usually, the trust protector is someone other than the trustee who has been named to oversee the actions of the trustee, remove and replace a trustee, fix a trust, fill trust vacancies, and revise trust terms.  
  • Inclusion of a decanting provision, which allows the trustee (or some other person) to actually crate a new trust with new adapted terms into which the assets from the old trust are added.  

 

Even if this type of language is included in your trust document, it is still important to have an attorney help you and your family carry out these provisions.  An attorney can help you consider how the trust language will impact the present and future beneficiaries.  

 

 

Court Petition Process

 

A court can also order a judicial modification of a trust when the trustee and/or beneficiaries petition it to do so.  A court will usually allow a trust to be changed if circumstances have changed so much that the administration of the trust has become unreasonably expensive or the purpose of the trust has become outdated.  

 

If everyone agrees that the terms of the trust should be modified, it is helpful to have all interested parties sign an affidavit stating that they agree to the proposed changes.  Doing this will help make sure the judge is aware that everyone involved is in agreement and does not feel that they will be materially harmed by the change.  If the interested parties do not all agree, the process will likely be more time consuming and complicated.  However, if there is an overwhelming reason to change the terms of the trust, it is still beneficial to petition to court to modify or revoke the trust.  

 

Next Steps:

 

Irrevocable trust agreements can be hard to understand because of their complicated and, often, antiquated language.  If you are a beneficiary of an irrevocable trust that you would like to modify or revoke, contact the attorneys at Smith Strong at (804) 325-1245 or (757) 941-4298 to help you with this process.