By the Law Offices of Lisa C. Bryant, INC.
If you own real property in California, it very likely you made a revocable living trust to protect your property from probate at your death. Most living trusts are only revocable so long as the creator of the trust has capacity and is still living. For married couples who make a living trust together, sometimes some or all of the trust becomes irrevocable at the death of the first spouse.
Once a trust becomes irrevocable, most people believe there is no way to change it; however, there are many ways a surviving spouse or beneficiaries can make changes—it just typically requires court approval. Since none of us can predict the future, there are many times in which it can be critical to be able to change an irrevocable trust include when there is a change in the law, an error by the drafting attorney, and if a beneficiary needs to preserve public benefits.
If an irrevocable trust needs to be changed, there are a few ways it may be possible to avoid court. First, some irrevocable trusts have provisions that include language for a trust protector. This is a neutral person (not the trustee) who may have some limited authority to make changes to an irrevocable trust. Usually, this authority is limited to replacing a trustee or tweaking administrative provisions to comply with current law. California also recently passed new legislation that allows a trustee to decant an old irrevocable trust to a new trust. If you are familiar with decanting wine, the process is somewhat similar with trusts—you leave behind the outdated/undesirable language in the old container and pour it into a new container. Much like how a trust protector’s authority is limited, the usefulness of trust decanting is also limited in a number of ways. Finally, California Probate Code § 15404 allows a settlor (trust creator) and all beneficiaries to modify or terminate a trust if everyone consents.
If farther reaching modification is necessary or not everyone agrees, a creator of a trust, trustee or beneficiary is typically able to go to court to ask for changes. If all beneficiaries of a trust consent, then the court may modify trust (California Probate Code § 15403). A court may also modify an irrevocable trust based on changed circumstances (California Probate Code § 15409) including unanticipated changes in the law or a beneficiary’s personal circumstances.
If you are considering making changes to your living trust or have not had your living trust reviewed in some time, keep in mind it is always easiest to accomplish changes while you are healthy and living. If you have questions about your current estate plan or about beginning an estate plan, do not hesitate to call our offices at (408) 402-4064 to schedule your complimentary consultation.
All materials have been prepared for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, and may be subject to change without notice.