Reformation of Trust Attorneys Advocate for Beneficiaries
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Protecting your interests and your future
A properly drafted trust is an important estate planning tool. It protects assets during the often-difficult probate process and provides for loved ones. But what happens when an irrevocable trust no longer functions in a way it was intended to, or the laws have changed? How does a trust beneficiary receive the support they deserve?
What is the difference between a revocable trust and an irrevocable trust?
There are similarities and differences between revocable and irrevocable trust:
Revocable trust: Most trusts are established within the lifetime of the creator (or settlor or grantor) of the trust, who is often the initial trustee and beneficiary, as revocable trusts. This means that the settlor or grantor of the trust may revoke the trust during his or her lifetime. Generally, a revocable trust will have specific provisions for amending the trust to adjust to the needs of the settlor and beneficiaries.
Irrevocable trust: Generally, an irrevocable trust may not be reformed or amended by anyone – even the person who created the trust cannot revoke or amend it once it is executed. Some irrevocable trusts are established during the lifetime of the grantor or settlor of the trust. More often, irrevocable trusts are created as testamentary trusts under a decedent’s Will or because revocable trusts automatically become irrevocable trusts upon the settlor’s death. Therefore, whatever conditions or benefits are set up at or before the time the trust becomes irrevocable usually stay that way.
Why would an irrevocable trust require reformation by a court?
Even the best-laid plans sometimes cannot anticipate every possible major changes. The same is true of trusts. Here are examples of why a trust would require reformation:
A grantor has set a condition on an irrevocable trust which he or she no longer believes is appropriate.
A beneficiary experiences a major health or financial crisis.
Tax laws change so a trust’s provisions are obsolete.
An irrevocable trust does not provide for a successor trustee and there is no way to appoint one.
All beneficiaries agree that the trust is not functioning as it was originally intended to.
Sometimes, it is necessary for interested parties to seek a reformation of or modifications to an irrevocable trust from a court. The attorneys at Altman & Associates are highly experienced in making this legal process work for you.
New legislation is critical to whether a court will reform a trust.
Due to recent legislation, the date a trust was created is a critical factor in seeking reformation or modification of the trust in court. On January 1, 2015, Maryland’s Uniform Trust Act will take effect. Among the advantages of the new law, an irrevocable trust can be reformed or modified with the consent of the trust beneficiaries if this action follows the intent of the trust. Many new laws regard trusts, but they only apply to trust created by January 1, 2015. Our attorneys understand the intricacies of the new law, along with the case law and process regarding the reformation or modification of existing trusts.
Contact our experienced Maryland reformation of trust attorneys today for assistance.
At Altman & Associates, our Maryland reformation of trust attorneys advocate for trust beneficiaries and enforce the intentions of the trust. We have convenient office locations in Columbia and Rockville. Contact us by phone at (301) 468-3220 or to schedule a consultation.
