Most people who create an estate plan include a trust of some sort. A popular and effective type of trust is the irrevocable trust. An irrevocable trust is a legal document that is generally not subject to modification or revocation upon its execution. However, there are a few exceptions that allow a party to revise the terms of an irrevocable trust. In this article, we discuss how to modify an irrevocable trust in Florida.
Parties to an Irrevocable Trust
An irrevocable trust involves the three following parties:
Grantor: The grantor is the individual who creates the irrevocable trust.
Trustee: The trustee is the individual who manages the irrevocable trust.
Beneficiaries: The beneficiaries are the individuals who will receive assets held in the irrevocable trust.
Irrevocable Trust Modification Under the Florida Trust Code
The Florida Trust Code permits a court to modify an irrevocable trust as long as the modification is consistent with grantor’s intent. Specifically, the code allows for the modification of an irrevocable trust when:
- The purpose of the irrevocable trust has been fulfilled or has become impossible, impracticable, or illegal to fulfill;
- Due to circumstances that weren’t anticipated, compliance with the irrevocable trust will substantially impair the accomplishment of the trust’s purpose;
- A material purpose of the irrevocable trust no longer exists; or
- Changes are necessary to correct mistakes to ensure consistency with the grantor’s intent.
In addition, a court may modify an irrevocable trust when compliance with the trust is no longer in the best interest of the trust’s beneficiaries. And although courts have discretion to make modifications under such circumstances, such changes must conform with the grantor’s intent to the greatest extent possible.
Irrevocable Trust Modification Under Florida Common Law
In addition to the Florida Trust Code, Florida common law provides another way to modify an irrevocable trust. Under common law, also known as court-made law, changes to an irrevocable trust are permissible without any findings regarding the practicability of the trust. Under Florida common law, the grantor and beneficiaries of an irrevocable trust may reach a joint agreement to either terminate or amend the trust and petition the court to make such a modification. The reason that Florida courts allow this is that if the grantor and all beneficiaries of an irrevocable trust desire the same changes, then there is no practical reason to keep the trust as it is.
Contact a Florida Estate Planning Lawyer
If you need assistance with estate planning in Florida, the Law Office of Angela Siegel is here for you. When you come to us for assistance, founding attorney Angela Siegel will create an estate plan for you that meets your unique needs and ensures you and your family are protected for years to come. Please contact us today to schedule a free initial consultation with our talented estate planning lawyer.