When events or unexpected developments occur, you may rethink the trust you have created or even wish to revoke it. Although it may be possible to revoke a trust in certain instances, it is important to consider the consequences and ensure you take the proper steps to avoid disputes and uncertainties in the future.
What type of trust can you revoke?
A settlor can make their trust revocable or irrevocable. A revocable trust be revoked or changed at any time; an irrevocable trust, however, cannot be revoked once in place. There are very limited situations in which it may be possible to question the validity of an irrevocable trust, but the settlor cannot revoke the trust on demand. However, a settlor can retain control in an irrevocable grantor’s trust by a limited power of appointment. This does not allow the settlor to revoke the trust, but the settlor can change the terms of the trust regarding the trustee and beneficiary designations.
It is important to note that once a settlor dies, a revocable trust becomes irrevocable.
How can you ensure the proper revocation of a trust?
Specific steps must be taken to successfully revoke a trust, including:
- Consulting with your estate planning attorney
- Declaring the revocation of the trust
- Notifying the trustee
- Changing the ownership of assets from the trust to the settlor or another party
Any misstep in the revocation process can nullify the revocation or cause disruption and uncertainty in the future. An estate planning attorney can guide you through the process and provide advice for any issues you may face.