Trusts have become an increasingly popular addition to a comprehensive estate plan due in large part to the various estate planning benefits a trust offers. If you already include a trust in your estate plan, or are considering the addition of one, you should know how to revoke that trust if you decide to down the road. More specifically, you need to know if you will be able to revoke a trust at all should you change your mind in the future.
Trusts have evolved to the point where even the average individual can benefit from the inclusion of a trust in his or her estate plan. In fact, many people choose to include more than one trust in their estate plan, thereby achieving numerous estate planning goals through the use of trusts. While trusts often serve a specific purpose, such as special needs planning, all trust share some commonalities. All trusts, for example, can be divided into two categories – revocable and irrevocable. Which type of trust you created, or plan to create, will determine if you are able to revoke the trust and, if so, how you revoke the trust.
Not surprisingly, a revocable trust is one that you may revoke at any time and for any reason. You may also modify or change the trust whenever you want. Most revocable trusts include a provision that addresses revocation of the trust. That provision typically indicates what you need to do to completely revoke the trust should you decide to do so at any point after the trust’s creation. If there is no revocation provision, a revocable living trust can usually be revoked by any action on your part that clearly shows your intent to revoke the trust. Check with your estate planning attorney in this case to ensure that your actions clearly indicate that intent.
If you created, or plan to create, an irrevocable trust, on the other hand, it cannot be revoked by you for any reason. Once an irrevocable trust becomes effective it cannot be changed, modified or revoked by the creator. Under limited circumstances, a court may be able to terminate an irrevocable trust; however, the trustor/settlor (person who created the trust) cannot do so. Therefore, care must be taken in the creation of an irrevocable trust to ensure that it achieves its intended purpose and that all the terms are just as you want them to be because there is no turning back once the trust takes effect.
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