Irrevocable trusts are an invaluable estate planning resource. However, due to tax changes (fiscal cliff) and other issues, irrevocable trusts with an estate plan in mind, need to be changed related to subsequent modifications of estate tax laws. Can irrevocable trusts be amended? The answer to that is yes, in certain circumstances.
New York Estates, Powers and Trusts Law, section 7-1.9, provides a means to modify, change or amend an irrevocable trust. This section of law allows the settlor, the individual who made the trust, upon written consent of all trust beneficiaries, to amend or revoke the trust in whole or in part. In the event that one beneficiary refuses to agree to the modification or is unable to consent to the modification, this section of the estate law cannot be utilized to amend or modify the trust. Examples of situations, where trusts cannot be amended are when one of the beneficiaries is a minor, an incompetent or the settlor has died.
In the event the settlor becomes incapacitated but has previously executed a Power of Attorney, the individual with the Power of Attorney can provide consent on behalf of the settlor to the amendment or modification of the trust.
Decanting A Trust
Section 10-6.6 of the New York Estates, Powers and Trusts Law allows trusts to be decanted. Decanting involves the moving of trust assets from one irrevocable trust to another trust. The new trust can be modified even if a necessary person under EPTL section 7-1.9 was unable to get consent for an amendment under this section.
Should you have an irrevocable trust and wish to make changes, modifications or alterations, New York law allows various routes to accomplish these goals. You should consult with an experienced estate planning attorney if you or other family members face this issue.