Dear Garden State Trust:
Can a trust be changed after it has been funded?
Yes and no. What kind of trust are you talking about? A revocable living trust may be changed by its creator at any time and in any way, even cancelled completely—that is what “revocable” means, after all.
Irrevocable trusts, on the other hand, may not be altered so lightly. The beneficiaries of an irrevocable trust have vested interests that may be enforceable by law. These may be rights to present trust income or future principal.
From your signature, I take it you hope to “tie up” your assets so as to exert control of them from beyond the grave. This can be done if that is truly your wish. However, estate planners generally recommend building some flexibility into estate plans, because you can’t foresee the future circumstances, you can only provide guidance for the objectives of your trust. You may, for example give the trustee some discretion in the distribution of trust income or principal, taking into account the successes or failures of the beneficiaries. In a marital trust for a surviving spouse, it is common to provide the spouse with a general power of appointment, which may be used to redirect assets at the trust’s termination.
Sometimes the terms of an irrevocable trust may be altered through a process called decanting, in which assets are poured into a successor trust. Finally, you might want to include a trust protector for your trust, someone with the power to amend the trust consistent with the vision that you have for it.
We would be pleased to have an in-person meeting to tell you more.
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