Can a successor trustee change a trust and undo all of your hard work? Read on to find out.
You went through the trouble of creating a trust, now you’re wondering if the successor trustee can change your trust by altering the terms, distribution schedule or removing beneficiaries. So, can a successor trustee change a trust and undo all of your hard work? Read on to find out.
A trust is a legal instrument that shields your assets from probate and allows you more control over how your estate is managed after you pass away. Trusts generally involve the grantor or creator of the trust, the trustee and the beneficiaries. Like a last will and testament, a trust allows someone to formally declare their last wishes regarding their legacy. Trust assets can avoid probate, unlike assets controlled by the last will and testament.
Additionally, while a will only comes into effect after you die, trusts can be used both during your life as well as after. Typically, the person who creates the trust is the initial trustee. In the trust documents, they designate an individual or multiple individuals to take over the management of the trust after they die — known as successor trustees.
Many people create a revocable living trust during their lifetime. Since they won’t be around to carry out their final wishes themselves, they designate one or more successor trustees to oversee the distribution to the trust beneficiaries. Naming successor trustees is important to ensure your assets get into the right hands. If you don’t appoint a successor trustee before you die, you leave the fate of your legacy to the courts.
The successor trustee has a significant amount of control over the trust, but they are typically prohibited from making any changes to the trust’s terms.
The duties of a successor trustee will vary by trust, but generally, a successor trustee can:
However, a successor trustee cannot:
Generally, a successor trustee is unable to change or restate a trust with different terms. This is because most revocable trusts become irrevocable when the trust grantor dies, which means the trust cannot be altered in any way. This means they can’t add or remove beneficiaries listed by the original trustee or reduce a beneficiary’s share unless the trust document grants them the power to do so. Additionally, they can’t pretend to have that power in an effort to influence beneficiaries to take certain actions (i.e., signing trustee liability release forms).
Though a successor trustee can’t change an irrevocable trust, they may be able to have certain aspects of the trust amended if they can prove to a court that the grantor was coerced into making the decision or made it under duress.
A successor trustee cannot alter the inheritance to your beneficiaries, unless you grant them specific authority in the trust agreement. This is to protect your beneficiaries from arbitrary distribution changes such as increasing or decreasing one beneficiary’s share. Though a successor trustee can’t change the amount of the distributions, they do have control over when and how they pay beneficiaries.
So, can a trustee change a trust? Likely not in any meaningful way. This is mainly due to the fact that most trusts become irrevocable when the trust grantor dies, making it illegal for any changes to be made to the trust.
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This post was written by MyAdvocate's team of estate planning attorneys.