Modifying Irrevocable Trusts: Methods, Governing Law, Consent Requirements, and Tax Considerations

This CLE webinar will provide estate planning counsel with practical techniques to modify an irrevocable trust. The panel will describe the various modification methods, including decanting, construction, reformation, division, and amendment. The program will also address potential state law issues and will detail key tax considerations in light of the proposed tax bill.

Estate planners often encounter circumstances where a previously drafted irrevocable trust is defective in some key aspect and requires modification. This defect may be due to a change in circumstances or an error in drafting, or as a reaction to legislative changes impacting the tax treatment of trust income. The recent tax bill may require estate planning counsel to review existing trusts to ensure they are tax-efficient vehicles for wealth transfer.

There are several ways in which an irrevocable trust can be fixed. Decanting is only one option among many that may be used to correct a trust. Estate planning counsel must be proficient at recognizing which techniques may apply to a particular set of facts and then implementing those techniques.

Additionally, counsel must analyze the applicability of state law. A number of states have seen significant developments in the law governing irrevocable trusts. The panel will explain the advantages of changing a trust's situs to benefit from the various methods available for modifying an irrevocable trust.

Listen as our experienced panel reviews the key tools available to modify a trust and prepares estate planning counsel for determining state law applicability, notice and consent requirements, and tax considerations.