Personal Injury, Probate, Employment, & Complex Litigation


Modifying An Irrevocable Trust

Irrevocable trusts are often thought to be irrevocable no matter what, but like a lot of things about the law, “irrevocable” should have an asterisk after it to denote that “irrevocable” means, irrevocable most of the time.

There are two statutory exceptions to when an irrevocable trust can be modified. Probate Code sections 15403 and 15409.

Probate Code section 15403 allows for modification if all beneficiaries agree to a modification of the trust, the court will allow the agreed upon modification (with once again, some exceptions applying. In most circumstances that don’t involve people suing each other first, a universally agreed upon modification will come from a family agreeing that some disposition of property was made by mistake—either the decedent didn’t mean for the trust to say what it says, or that the decedent shouldn’t have made the disposition term the way they intended. Most of the time these circumstances wouldn’t allow for the court to overrule the decedent’s intent, but when all beneficiaries agree, there is no legitimate reason in overruling them, barring the one statutory exception. If the continuation of the trust is necessary to carry out a material purpose of the trust (for example providing continued financial support for the health and well-being of an individual, not a lump sum payment). If that situation is applicable, then the beneficiaries must prove to the court that the reason for modifying the trust outweighs the interest in accomplishing a material purpose of the trust. So, for example, showing the court that the health and well-being of the individual is actually better accommodated by a lump sum payment.

Probate Code section 15409 allows modification of the trust pursuant to a petition filed by either a beneficiary or trustee if that trustee or beneficiary can prove that due to circumstances not known or anticipated by the decedent cause the continuation of the trust to substantially impair the purpose of the trust. So, once again, if the purpose of the trust is to care for the health and well-being of an individual by providing payments over time, and after the decedent passes away, the individual becomes homeless, at that point a lump sum payment allowing the individual to buy a home may be much more appropriate for caring for the individual. What makes Probate Code section 15409 special though, is that it only takes a sole actor to change the terms of the trust, not an agreement of all beneficiaries.