Trust Modification and Termination in Virginia Beach

Many people use trusts as an estate planning tool. A trust can shield assets from creditors, protect a vulnerable loved one, reduce estate taxes, and keep property out of probate. Avoiding probate saves money and ensures that trust beneficiaries have immediate access to property upon your death.

An irrevocable trust is effective at protecting your assets from creditors and reducing estate taxes. Some people might be hesitant to create an irrevocable trust because, as the name implies, the grantor cannot revoke it once established.

However, that does not mean that an irrevocable trust is completely inflexible. An experienced estate planning lawyer at Parks Zeigler can advise you about methods of trust modification and termination in Virginia Beach.

A Trust’s Purpose Is Paramount

The person who creates a trust is called the grantor. The grantor puts their property into the trust and titles it in the trust’s name. The trust becomes the owner of all the property in the trust, and the grantor no longer has control over it. Instead, the grantor appoints a trustee to oversee and manage the property.

When a grantor establishes a trust, the documents creating it must state its purpose. For example, a grantor might establish a charitable trust to provide support to an organization or cause. They also might create a trust to obtain tax advantages or provide for their children and grandchildren.

The grantor of an irrevocable trust cannot modify it once it is established. However, when developments the grantor did not anticipate prevent or impair a Virginia Beach trust from accomplishing its purpose, modification or termination could be possible. Our team can review a specific trust and determine whether the law would permit it to be changed.

Modification By Consent

Sometimes all the interested parties agree that changing or dissolving the trust is a good idea. When the grantor and all the beneficiaries agree, Virginia Code § 64.2-729 requires the Virginia Beach court to grant a modification or termination of a trust, even if doing so would not further the trust’s stated purpose. If the grantor is dead or does not consent, a court would consider the grantor’s purpose when deciding whether to modify or terminate a trust.

The law also allows termination or modification by consent due to changes in circumstances the grantor did not anticipate, difficulty in administering the trust, or when the trust has become uneconomical. In general, a court would attempt to modify the trust and would only terminate it if modification would not resolve the issue. The burden of proof is on the parties wishing to change or terminate the trust to prove that doing so is appropriate.

Non-Judicial Settlement Agreements

When all the interested parties agree, it is sometimes possible to change or terminate a trust without going to court. Virginia Code §64.2-709 allows the interested parties to develop a written agreement to make any changes that a court could implement, including modification or termination of the Virginia Beach trust. However, the changes must not interfere with the trust’s purpose.

Non-judicial settlement agreements are binding on the signatories. However, an agreement will not be effective unless all the interested parties—meaning the beneficiaries, contingent beneficiaries, and grantor if they are alive—sign it.

A non-judicial settlement agreement can be a cost-effective way to change or terminate a trust. These documents require careful drafting and interested persons should engage competent legal counsel.

Speak With a Virginia Beach Attorney About Changing or Terminating a Trust

An irrevocable trust is a useful estate planning tool for many people. Although the grantor cannot change their mind unilaterally after establishing the trust, changing or terminating it is possible in some circumstances.

Talk to a Parks Zeigler, PLLC attorney about trust modification and termination in Virginia Beach. We can explain your options and help you accomplish your desired result. Get started today.

Areas We Serve

With an office near Town Center, Virginia Beach and a second location beside the Chesapeake courthouse, our team provides quality legal representation across the entire Hampton Roads Area.

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