Changing a parents’ trust after they’re gone is a touchy subject. On the one hand, people create a trust to make sure their wishes are carried out, and they don’t like the idea of their beneficiaries changing the parts they don’t like. On the other hand, sometimes circumstances change, and carrying out the trustor’s wishes would be difficult, impossible, or just plain unfair. For those circumstances, there are a couple of options for the trustee and beneficiaries:
- Get a court order. Courts are allowed to modify irrevocable trusts, so a court order is the gold standard when you want to make a change to a trust’s terms. The downside, of course, is that you have to go to court, which can be time-consuming and expensive. You also need to convince the court actually to give the order. This is not difficult if everyone agrees, but if anyone objects to the change, this petition can blow up into a full-scale lawsuit. The upside is that, once the order is given, the case is closed, and the only recourse the unhappy beneficiary has is to complain at Thanksgiving dinner.
- Get all beneficiaries to agree. If, however, everyone is in full agreement that this change is good, you can avoid the court process entirely. The Probate Code, which sets down all the rules for trusts and estates, allows an irrevocable trust to be modified if the trustee and all beneficiaries are in agreement. To make sure this doesn’t come back to bite you later, have all beneficiaries sign something to show that they agreed to this. Nothing’s worse than having a “he said/she said” contest in front of a judge – except insulting or threatening the judge. That’s worse. Much much worse.
Let me repeat that these options should only be used when the trust terms are unnecessarily difficult, or when the terms would not effectively carry out the trustor’s wishes. A trustor’s wishes should be respected whenever possible, so save these for the truly exceptional circumstances.
If you want to learn more, please feel free to email me at email@example.com.
 Trustor = the person who created the trust (a.k.a. “Grantor” or “Settlor”)