In New York, an irrevocable trust is a trust that cannot be revoked or modified without either a court order or written consent from all parties involved (all trustees, beneficiaries and people who made the trust).
Is a New York Trust Revocable or Irrevocable by Default?
A New York trust is irrevocable by default. NY EPTL § 7-1.16. However, it is still a good idea to not leave the issue hanging in the air and to instead specify if a trust is revocable or irrevocable.
Even an irrevocable trust is only irrevocable if there is no consent of all the parties involved. It can be revoked with a written consent of all the parties involved, including grantors, trustees and beneficiaries. If some of the parties are not available or are minors, contact a New York estate attorney.
Even a trust that is expressly stated to be revocable becomes irrevocable upon the death of the settlor/grantor, the person who made the trust.
Can You Revoke or Modify a New York Irrevocable Trust?
As life circumstances change, a trust may need to be changed or updated. But what happens if the trust is irrevocable? Does that mean that the trust can never be revoked or changed?
Most irrevocable trusts in New York have a work-around that allows them to be changed or modified, even if they are irrevocable. We would have to look at the language of the trust and other circumstances, but most irrevocable trusts have a way out that allows us to have them revoked.
Usually, we are able to either use one of the powers of the trustee to “decant” the trust, or transfer it to a different trust, or we are able to use consents of beneficiaries, trustees and grantors to modify the trust and resignations of trustees if a trustee needs to be changed.
If a trust does not have a way out, or one of the people involved does not agree to sign the consent to modify the trust, then the only way to modify the trust, if any, it through the court. An estate attorney can draft a petition explaining to the court the reasons why changes need to be made to the trust. If the person who is not agreeing to the modification submits an opposition to the trust modification. It is not easy to get the court to modify an irrevocable trust, especially if one of the people involved objects. It will be up to the judge to decide whether or not to grant the trust modification, based on the arguments presented by the respective estate lawyers.
If you need an attorney to deal with an irrevocable trust in New York, call Albert Goodwin, Esq. at 212-233-1233 or 718-509-9774.