There are many ways you can plan for your future and help achieve your goals and those of your family. Estate planning is a crucial step on the road to financial health and providing for your family both during your life and after you are gone. No two estate plans are alike, as no two families are alike. The estate plan must be tailored to their assets, needs, and goals. As your family grows and changes, your estate plan needs to change as well. If your estate plan includes a trust, you may need to amend and change your trust documents.
Before you can determine how to amend, change, or even completely revoke your trust, you need to determine what kind of trust you have. Trusts generally fall into two categories: revocable and irrevocable. Although there are many sub-classes of trusts, they can all be placed into one of these two categories. By their very nature, irrevocable trusts cannot be amended, revoked or modified after their creation except for in very limited circumstances. Minnesota statute § 501C.0410-501C.0417 provides the eight circumstances that a non-charitable irrevocable trust may be modified by a court. These circumstances include, but are not limited to, correcting a mistake of law or fact, combing or dividing trusts, consent of all the beneficiaries, or unanticipated circumstances. Note that the settlor cannot unilaterally modify the trust; rather, he or she must seek approval from the court.
Modifying a revocable trust is not nearly as complex. If you are the settlor and wish to amend or revoke the revocable trust that you created, you simply need to speak with your attorney. Documents can be prepared to reflect your new goals and to make the trust fit your current needs. Note, however, that changing a trust can have serious implications that must be considered before you proceed. For example, if you elect to completely revoke the trust and reclaim all of the assets contained therein, you would lose any measure of creditor protection you may have enjoyed under the trust. There can also be repercussions during a divorce or when it comes time to pay your taxes. In short, before modifying your revocable trust, you need to discuss it carefully with your attorney to ensure that you are proceeding in the most practical and financially sensible way for your estate plan.
We have extensive experience assisting our clients with creating, modifying, and revoking trusts. Call today at (320) 299-4249 for a consultation.