When can a court make changes to an irrevocable trust?

Any kind of action in which a court is asked to change, modify or otherwise amend the terms of the trust instrument, or to prohibit or permit a trustee to take actions that are not authorized by the terms of the trust, or to terminate a trust either in its entirety or in part, is referred to as a trust modification. Trust modifications are regulated by Section 112.054 of the Texas Trust Code.

Some examples of when the trust code will allow a court to “modify a trust” are:

  1. When circumstances that were not known to or anticipated by the settlor (the person originally creating the trust, also referred to as the grantor or trustor) of the trust and when the requested order will further the purposes of the trust;
  2. If continuing the trust is not necessary to achieve any clear purpose of the trust provided all the beneficiaries consent;
  3. A modification is necessary to achieve certain tax objectives and is not otherwise contrary to the settlor’s intention;
  4. Whenever the purposes of the trust have been fulfilled or have become illegal or impossible to fulfill; and
  5. When a modification of certain terms of the trust is necessary or appropriate to avoid impairment of the trust administration.

Category : Probate Law &Trust Litigation

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