A revocable trust is an of estate planning document, especially for families. This is because it allows the assets in the trust to avoid the lengthy and expensive court process of probate. Instead, a revocable trust immediately transfers the assets of the trust to the named beneficiaries when the owner passes away.
Typically, a revocable trust will have a provision that says upon the death of the owner, the trust becomes irrevocable. With an irrevocable status, the trust cannot be changed or adjusted. This happens to protect the wishes of an account owner, ensuring that the estate plan stays according to the wishes of the deceased. If anyone has concerns about the estate plan, they will have to petition the court and convince them that something has to be changed, added, or removed from the trust.
In effect, the automatic switch from revocable to irrevocable protects the estate plan and preserves the interests and wishes of the deceased. However, it can also pose some problems, such as when honest mistakes were made in the trust. To correct it, the parties must go to court and submit a petition. But there are some exceptions.
Revocable Trusts Owned by Married Couples
Generally, revocable trusts become irrevocable at the first death. However, some revocable trust plans owned by a married couple can have different terms in which the trust becomes permanent after the second death.
In these instances where one of the spouses passes away, the other spouse can still make changes to the revocable trust in the same manner that they would in a private will. The trust only becomes permanent and irrevocable when the surviving spouse passes away.
A revocable trust can also be adjusted or changed if there were minor mistakes made in the document. Some trust plans allow for these changes, specifically if there is a pressing tax issue or if there is a better place for more favorable laws.
However, if the revocable trust document was drafted properly at the death of the owner, it becomes permanent and irrevocable to the point that no one can change or amend it. The only resort that parties can take to change the trust is to challenge it in court.
Challenging a Trust In Court
A revocable trust that has been made irrevocable because of the death of the owner can always be challenged. The party seeking to make changes would have to petition the court and convince them that the change is necessary. Some common grounds that can be brought forth are that the deceased did not have capacity to create the trust or was under duress. However, a very high standard of proof is required to challenge a trust in court.
Once the trust owner passes away, it will be very difficult for other parties to change or amend the trust, unless the deceased authorized them to do so. That’s why it’s important to properly draft a revocable trust to ensure that no problems will arise when it becomes permanent and irrevocable.