If you are considering either trust modification or termination in Palm City, you need to speak to an attorney. Experienced legal counsel can help you review your options and determine which course of action best suits your needs. Reach out today.
There are a variety of situations in which a trust might be modified, and there are also potentially several mechanisms for doing so, even if the trust is irrevocable. However, the first step in assessing the options available always involves a careful, thorough reading of the trust agreement.
Some of the most common situations in which a trust might be modified involve unanticipated changes in circumstances. Changes in tax law, changes in beneficiary status such as the onset of a disabling/special needs condition, or concern about a beneficiary’s ability to properly handle an outright trust distribution may all constitute trust modification or termination in Palm City.
A trust might be terminated if the purpose for which the trust was created no longer exists or if the amount of assets in the trust no longer make it economically feasible to continue administering the trust.
There are several ways to potentially modify a trust. The best way of doing so will depend upon the options available according to the trust agreement and the preferences of the parties involved. For example, some trusts contain provisions allowing a Trust Protector to modify a trust. Those that do not contain Trust Protector provisions may bestow some ability to modify upon an Independent Trustee. Other modification options may include judicial and nonjudicial modification, as well as trust decanting.
The larger the size of the trust, the greater the potential liability for a trustee or other fiduciary. While modifying or terminating a trust through the court system simply may not be cost-effective for trusts containing modest assets, judicial modification offers a fiduciary greater certainty and enforceability and therefore is likely to be more appropriate for trusts containing greater asset values. Where trust assets are smaller in value, non-judicial modification and non-judicial settlement agreements may offer ways to modify a trust. Also, with proper notice to trust beneficiaries, a trust containing less than $50,000 may be terminated by the trustee under Fla. Stat. §736.0414.
Unless another mechanism (such as a Trust Protector, the exercise of power by an Independent Trustee, or trust decanting) is used, trust modifications generally will require court approval. However, there are some situations where a trust may be modified without court approval, but notice will almost always be required to be given to the trust beneficiaries.
If the settlor has died, the trust was created after 12-31-2000, and either the Rule Against Perpetuities period selected in the trust was 360 years or the common law rule of 21 years plus lives in being was selected BUT the trust also specifically authorizes non-judicial modification, then non-judicial modification is possible.
A trust may be terminated without court approval if the assets in the trust are less than $50,000. A trust may be terminated with court approval for a variety of reasons:
If a trust was created before 1-1-2001, the trust may not be terminated by a court under the premise that the termination is in the best interests of the beneficiaries.
If a trust was created after 12-31-2000, the Rule Against Perpetuities period is the common law rule of 21 years plus lives in being within the trust agreement, and the terms of the trust expressly prohibit judicial modification or termination, then the trust may not be terminated under the premise that termination is in the best interests of the beneficiaries.
Nonjudicial Settlement Agreements (NJSA’s) in Palm City allow the parties of a trust to modify a trust where the same approval could be issued by a court. NJSA’s are designed to provide the trustee and beneficiaries with an easier, simpler way of doing what the law allows without the necessity of going to court. This is simply one more way to modify or terminate a trust in Palm City.
Trust modification and termination in Palm City can only be done depending on the circumstances of your trust. However, many of the nuances of trust laws in Martin County are tied up in dense legal language. Instead of ignoring any opportunity you have to change or terminate a trust, contact an attorney for help.