Trusts are a modern and popular method of transferring property from one party to another. Unlike traditional wills, a trust may order this transfer at any time. A trust maker may place assets into a trust for various reasons, such as to limit their overall tax burden, provide for the long-term care of family members, or donate to charities.
However, trust makers (also known as settlors) may decide that they want to change the terms of a trust. In other situations, beneficiaries and trustees may also believe that a change or termination of a trust is in order. Trust modification and termination in Sugar Land takes specific legal steps. A knowledgeable trusts attorney from Romano & Sumner can walk you through these requirements and help make the desired changes.
State law operates on the assumption that a settlor may modify or terminate a trust at any point in the future. According to Texas Property Code § 112.051, by default, a settlor may modify or terminate a revocable trust (it cannot be irrevocable) in writing at any time. The sole exception to this rule states that a modification may not increase the duties of a trustee without that trustee’s consent.
However, many trusts are irrevocable due to a simple clause in the documentation that creates this caveat. In this case, a settlor may only change or terminate the trust with the consent of the trustee and all beneficiaries. An experienced local attorney can help settlors obtain this consent from all necessary parties and draft the new documents to make the desired revisions.
While a settlor retains most of the authority to change or terminate a trust, there are also limited circumstances in which a trustee or beneficiary may seek a change without the settlor’s consent. This is only possible by judicial order.
TX Prop. Code § 112.054 outlines the reasons why a court may take this action. It states that either a trustee or beneficiary can petition the court for a total or partial trust termination if:
Above all else, the court will only act if the proposed changes still align with the trust’s original objective. Similar rules apply to situations where a beneficiary or trustee asks the court to effectuate a trust modification. The parties always bear the burden of proving to the court that a trust modification or termination is in the best interests of the settlor. Our seasoned trust modification attorneys can take the lead in proving these concepts in Sugar Land court.
There are many reasons why you may seek to change or end a trust. The methods of achieving this depend on whether you are a settlor, trustee, or beneficiary. The language of the trust documentation itself will also play a major role.
Legal counsel can ease the process when seeking trust modification and termination in Sugar Land. Consult a dedicated attorney at Romano & Sumner to learn your legal options and get guidance throughout the process. Call today and set up a consultation.
Romano & Sumner, PLLC
