The short answer is, yes. –
An irrevocable trust is a trust agreement that is generally not subject to revocation or modification once the agreement has been executed and the trust is funded. There are exceptions that may allow you to change the terms of an irrevocable trust.
In any trust there are three main parties:
- The grantor is the person who created the trust.
- The trustee is the person who manages the trust. The grantor may appoint him or herself as the trustee or may appoint an independent third party.
- The beneficiaries are the ones who will receive the assets held in the trust.
Modification of an Irrevocable Trust under the Florida Trust Code—
The Florida Trust Code allows a court to modify an irrevocable trust where the modification is consistent with the intent of the grantor. The code provides three general scenarios in which an irrevocable trust’s terms may be modified:
- When the purpose of the trust has been fulfilled or has become illegal, impossible or impracticable to fulfill;
- When due to unanticipated circumstances, compliance with the trust substantially impairs the accomplishment of the purpose of the trust; or
- A material purpose of the trust no longer exists.
Usually, when people seek a modification of an irrevocable trust, there has been an unanticipated change in circumstances. For example, a modification of an irrevocable trust may be necessary due to changes in personal financial conditions or following the death of a family member. The Florida courts have broad discretion to change or terminate a trust and may even make changes on how the trust assets will be distributed if it finds doing so is necessary.
A court may also modify a trust when complying with the trust is no longer in the best interest of the beneficiaries. Although the court has discretion to make such modifications, it must conform to the extent possible with the grantor’s intent when it makes a change to the trust.
Modification of an Irrevocable Trust under Florida Common Law—
Florida Common Law is another vehicle through which an irrevocable trust may be modified. Under the Florida common law, a modification is allowed without the court first having to make any findings about the practicability of the trust. The grantor and beneficiaries could come to a joint agreement to either change or terminate the trust and petition the court for a modification. This makes sense because if the grantor and all the beneficiaries of that trust desire a change in terms, there is no need to keep the trust as is.
This does not contradict the Florida Trust Code because the Florida Trust Code does not prohibit the grantor and beneficiaries of the trust from consenting to a modification.
The Florida Trust Code allows the courts to make changes to correct mistakes in an irrevocable trust to ensure that the trust reflects the grantor’s intent. When the grantor or another interested party asks to reform a trust, the court may do so even if the language is unambiguous. The person seeking the reformation must show that the grantor’s intent was affected by the mistake.
Speak with a Florida Estate Planning Attorney…
As attorneys who specialize in Florida Estate Planning and Probate, our team is equipped with the knowledge and skill to create an estate plan that will work best for your circumstances. If you have any questions concerning modifications to an irrevocable trust, or are considering executing an irrevocable trust, we invite you to contact The Florida Estate Planning Law Firm, by e-mail or by calling our office at 305-384-3386.