A revocable trust is a trust that the grantor, or trust creator, can terminate or change at any time. The law generally assumes that because the grantor can terminate the trust at anytime, the grantor can also amend the trust at anytime, even if the trust does not include amendment language. However, amendment language may be helpful for the grantor, and may even be necessary if somebody other than the grantor wants to amend the trust. However, amendment language is not necessary for a revocable trust to be legal and enforceable.
Revocable trusts exist under the laws of each state in which the trust has been created. The general rule under most state laws is that a grantor can amend a revocable trust. However, some state laws do not follow this general rule, or impose specific requirements on amending a revocable trust. For example, some states follow the rule that a grantor cannot unilaterally amend a revocable trust if doing so would cause unreasonable detriment to one or more beneficiaries. in such cases, the grantor can revoke the trust and start over, but cannot modify or amend the existing trust.
Amendment language in a revocable trust is helpful, even if it is not necessary under state law. Amendment language clarifies that any amendment to the trust is legal and valid. Where the grantor relies on general rules of state law, ambiguity and uncertainty can arise. If a beneficiary challenges the grantor's right to amend the trust, the dispute may end up in court. Amendment language can help end those types of disputes.
A revocable trust can also include amendment language authorizing a third party, other than the grantor, to amend the revocable trust. For example, the trust agreement can include language authorizing the trustee to amend the trust under certain circumstances. Amendment language is necessary whenever a third party amends a revocable trust.
State judges always have authority to amend revocable trusts, even if the trust does not include amendment language and even if state laws would not generally permit unilateral amendment by the grantor. Judges have inherent authority to modify trusts if necessary to avoid unforeseen detrimental effects on the beneficiaries, or to avoid some type of illegal or inappropriate activity. Either the trustee or any of the beneficiaries can apply for an order amending the revocable trust.
- "Make Your Own Living Trust"; Dennis Clifford; 2011
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