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Can a trust be amended or terminated? Sometimes a grantor, also called a settlor, of a trust (the person who created the trust) or a trust beneficiary ends up not liking some of the wording of a trust. Or sometimes life circumstances in general change so much that the wording of a trust isn’t working well for them anymore. Well, it really depends on several things.

can a trust be amended

If the trust is a revocable trust, then it for sure can be revoked by the grantor. And if there is the right kind of language in the trust, then the grantor could also amend the trust.

However, if the trust is an irrevocable trust, then things can get much more complicated and difficult. By general design, an irrevocable trust cannot be amended or modified. There are exceptions though.

First, there may be language in the trust that does allow for modifications. Although there won’t be termination language, because that would make it a revocable trust from the start.

Second, you could request a judicial modification of the trust. A court will allow a trust to be modified if you can show that the trust’s main purpose is being inhibited in some way.

A third way to change an irrevocable trust is by what is called “decanting”. This means the trustee modifies the trust by moving assets from one trust to a new trust with different terms. This is allowed by a state statute that was passed in 2013 and updated in 2017. Decanting can be tricky though depending on the wording of the original trust.

A fourth way to make changes to an irrevocable trust has been developed through common law (aka case law). Basically the grantor and all the beneficiaries have to consent to the modification. And no beneficiary can be under any incapacity. This last point can cause the most problems at times.

As you can now see, the answer to the question, can a trust be amended or terminated, really depends on the particular facts and circumstances of the trust document and the grantor, beneficiaries and trustee.

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