Can a Trust Be Changed After Death?

Oct 3

Can a trust be changed after death? The answer to this question is probably everyone’s least favorite reply: it depends. Yes, depending on different factors, some trusts can be changed post-mortem. In this article, we’ll explore the conditions under which changing a trust post-mortem would be allowed.

What Is the Purpose of a Trust?

The general purpose of a trust is to distribute the settlor’s assets to the designated beneficiaries in the manner they want after their death. The successor trustee is appointed by the settlor to manage and administer the trust post-mortem, or in the case they become incapacitated. Essentially, they are in charge of and control the assets of the trust once the settlor passes. This is why it is essential to choose someone you can trust 100% to be your successor trustee.

While the settlor is still alive, in a revocable trust, he or she usually has complete control over the trust, and only by way of death or mental incapacity does the successor trustee gain control of the trust. That begs the question, does the successor trustee have the power to change the trust after the settlor’s death?

What Are the Different Kinds of Trusts?

In terms of being able to change the terms of a trust, there are irrevocable trusts and revocable trusts. An irrevocable trust cannot be changed after the settlor’s death. This means that neither successor trustee nor beneficiaries can execute amendments or revoke the trust. Most trusts are set up this way—to become irrevocable by default post-mortem.

Most revocable trusts are made so that they can be changed by the settlor while they’re still alive. However, there are cases where the settlor will maintain the revocable status of the trust after their death. In most cases, this is so their spouse or another trusted individual can execute amendments or revoke trust after the settlor has passed.

What Authority Does the Successor Trustee Have?

Generally speaking, the successor trustee does have a large amount of control over the trust after the settlor dies, but they cannot simply do whatever they want, especially since the beneficiaries have a right to know the contents of the trust as well. Their powers are limited to carrying out the instructions of the trust as the settlor intended unless they have also been given power of appointment or unless a court or agreement indicates otherwise.

Power of appointment enables the successor trustee, or whoever it has been granted to, the ability to change some provisions of the trust. This mostly pertains to beneficiaries and their inheritance. For instance, if a successor trustee has been granted power of appointment, general power of appointment, or special or limited power of appointment, this may enable them to distribute funds to beneficiaries at their discretion.

Both the successor trustee and beneficiaries have the power to contest a trust if they suspect misconduct such as mental abuse, financial abuse, or the settlor being under undue influence. The successor trustee and beneficiaries can also petition the court to modify or terminate a trust if they feel it is the most logical course of action. The final decision on the request is up to the judge.