MODIFYING AN IRREVOCABLE TRUST UNDER FLORIDA LAW

An irrevocable trust is generally a more rigid trust instrument compared to other types of trusts. For example, when a person deposits assets into an irrevocable trust, that person relinquishes their control over the assets. Of course, irrevocable trusts also have their advantages; they can help preserve the trust assets from creditor's claims, and they can offer substantial tax savings when the beneficiaries receive the trust assets.

Although irrevocable trusts offer less flexibility than other types of trusts, this does not necessarily mean that an irrevocable trust can't be modified. In certain circumstances, a Florida court might approve modification, or even the revocation of an irrevocable trust.

Under Florida law, a court can order a modification of an irrevocable trust if the modification does not conflict with the purpose for which the settlor created the trust. If, for instance, the purpose of the trust has already been accomplished, or if that purpose is impracticable or impossible, the court can modify or terminate the irrevocable trust. Likewise, an irrevocable trust may also be subject to amendment or termination if unanticipated circumstances arise that would make complying with the original terms of the trust inconsistent with the settlor's purpose for creating it.

Before seeking a judicial modification or termination of an irrevocable trust, all interested parties should understand the potential consequences of that course of action.

An irrevocable trust can be an immensely valuable estate planning tool. Anyone who is thinking about setting one up should understand not only the advantages of an irrevocable trust, but also the potential downsides. An experienced trust administration attorney can explain the possibilities for modifying or terminating an existing irrevocable trust.

Please reach out to us at 141 5th Street NW, Suite 300, Winter Haven, Florida 33881 at 863.294.1114.

Established in 1991, Rignanese & Associates is available to work with clients on their legal needs.

On behalf of J. Kelly Kennedy, Attorney/CPA, PLLC, which has been acquired by Rignanese & Associates, PLLC.

Source: 2015 Florida Statutes, "Florida Trust Code Chapter 736.04113," accessed on March 15, 2016