Modifying or Terminating a Trust

A trust is created when ownership, of certain assets, is transferred to a trustee. The trustee is in place to manage the assets for the beneficiary that was put in place by the grantor. The two most commonly known kinds of trusts are a living trust and a testamentary trust. A living trust is made while you are still alive and it may give grant you control over the income generated by the trust. On the other hand, a testamentary trust does not go into effect until the person dies. This is because it is a part of the deceased individuals will. Living trusts can be broken into two categories: irrevocable and revocable. An irrevocable living trust cannot be altered or canceled, unless the grantor and the beneficiaries both agree to do so. A revocable living trust can be canceled or changed at any time by the grantor.

When Modifying or Terminating a Trust Makes Sense

Modifying or terminating a trust makes sense in several situations. Perhaps one of your beneficiaries is now deceased, and you would prefer to change who the primary beneficiary is. What if you many more assets now than you did 10 years ago when the trust was put into place? What if you have significantly less assets since it was put into place? What if you and the beneficiary had a falling out and you no longer want them to receive what you were going to leave them. These are just a few of the many reasons why a person may want to modify or terminate a trust.

Revocable Living Trusts

As mentioned previously, this kind of trust can be cancelled or changed in anyway by the grantor. This can be done at anytime he or she sees fit and it does not require the consent of the beneficiaries.

Irrevocable Trusts

This kind of trust cannot be cancelled or changed at any point without the beneficiaries consent. Modification or termination can only take place if both parties come to an agreement. 

Testamentary Trusts

This kind of trust is irrevocable. However, since it is a part of your will you can amend it in any way you see fit.

Obtaining Legal Help

Having a qualified attorney for this process will help prevent many unwanted headaches. He or she can advise you on what kind of trust makes sense for you. Your lawyer can also let you know what specific state, federal laws apply to each trust, and how they can benefit or hurt you. Furthermore, he or she can assist you with properly modifying or terminating your trust.