Author: Brenton McWilliams
Can a Revocable Trust be Changed?
For most questions about trusts, the express terms of the trust agreement itself prevail. In addressing the question whether a revocable trust can be changed, the first step to determining whether a trust can be changed is a review of the trust agreement to see what, if anything, the trust agreement says about changing the trust agreement. If the trust agreement doesn’t speak to amendment or changes to the trust or, if the trust agreement doesn’t address the specific circumstances present, then the default rules of the Alabama uniform trust code prevail. Trust agreements will commonly provide that on the happening of a certain event, some portions of the trust agreement can be changed and some portions cannot be changed.
The Alabama uniform trust code provides that, if the trust is a revocable trust (vs. an irrevocable trust) then an individual settlor (the person creating the trust) has the authority to make changes to the trust agreement.
If there are multiple settlors, such as a couple who creates a revocable trust together, the Alabama uniform trust code provides that, if the trust contains community property (property owned by a married couple subject to the laws of a community property state), one of the spouses may revoke or terminate the trust, but the trust agreement can only be amendment by joint action of both spouses.
The Alabama uniform trust code provides that if there are multiple settlors and the trust contains property other than community property (in other words separately owned property which would be typical in Alabama), each settlor can revoke or change the trust with regard to the property of the trust that is attributable to the settlor’s contribution.
How to determine whether the trust is a revocable trust?
Determining whether the trust is a revocable trust (vs. an irrevocable trust) requires a review of the trust agreement. Once again, the terms of the trust prevail over the Alabama uniform trust code. The Alabama uniform trust code states that a trust is revocable, as limited by the trust agreement, unless the terms of the trust agreement expressly provide that the trust is irrevocable. If the trust is revocable then, in accordance with any limitations in the trust agreement, the trust may be changed by the settlor.
Can the Settlor’s agent under a power of attorney change the trust?
On the question of whether the Settlor’s agent under a power of attorney can change the trust agreement, the Alabama uniform trust code again defers to the terms of the trust agreement. The Alabama uniform trust code states that the settlor’s powers to change the trust, revoke the trust or distribute the trust property may only be exercised by the settlor’s agent under a power of attorney to the extent expressly authorized by the trust agreement. In addition to authorization by the trust agreement, the agent must also be given the authority to carry out these actions by the power of attorney document itself.
Can the Settlor’s conservator or guardian change the trust?
Subject to limitations in the trust agreement, the Alabama uniform trust code provides that the settlor’s conservator, or the settlor’s guardian if no conservator has been appointed, may exercise the settlor’s powers to change the trust, revoke the trust or distribute the trust property only if the conservator or the guardian is given approval by the court supervising the conservatorship or guardianship (which would typically be the probate court in Alabama).
We have offices in Baldwin County, Alabama in Orange Beach, Foley and Daphne. If you need help with estate planning, including preparing a revocable trust or changing an existing revocable trust, please call us at (251) 215-9275 or write us on the contact page to discuss how we can help.