{"id":188,"date":"2021-09-08T00:00:00","date_gmt":"2021-09-08T00:00:00","guid":{"rendered":"https:\/\/norrismclaughlin.com\/njbr\/2021\/09\/08\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/"},"modified":"2021-09-08T00:00:00","modified_gmt":"2021-09-08T00:00:00","slug":"does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot","status":"publish","type":"post","link":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/","title":{"rendered":"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot!"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">A recent decision issued by the <a href=\"https:\/\/norrismclaughlin.com\/njbr\/2330\" target=\"_blank\" rel=\"noopener noreferrer\">Supreme Court of Alabama<\/a> highlights the importance, for both creators and beneficiaries of trusts, of understanding whether a trust is Revocable or Irrevocable, and the consequences that flow from that distinction.&nbsp; &nbsp;<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">Revocable and Irrevocable Trusts<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">Any trust has three players: a Settlor, a Trustee, and a Beneficiary. The Settlor creates (or &#8220;settles&#8221;) the trust, and the Trustee manages the trust assets based on written instructions from the Settlor (typically in the form of a Trust Agreement) for the benefit of a Beneficiary. A trust can be created during the Settlor&#8217;s lifetime (a &#8220;Living Trust&#8221;), in which case the trust can be either revocable or irrevocable, or upon the Settlor&#8217;s death, usually under the provisions of a Will (a &#8220;Testamentary Trust&#8221;) which, because the Settlor is deceased, is always irrevocable.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">An Irrevocable Trust generally cannot be revoked or modified, exactly as the name implies. However, in some states (including New Jersey and Alabama), either the Trustee or a Beneficiary (not the Settlor) of an Irrevocable Trust may bring an action in court to modify or terminate the trust, or an Irrevocable Trust can be modified or terminated upon consent of the Trustee and all Beneficiaries if the modification or termination is not inconsistent with a material purpose of the trust.&nbsp;&nbsp;<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">The Alabama Case<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">The Alabama case referenced above involved a Husband and Wife who in 2012 engaged in a common estate planning technique known as non-reciprocal SLATs, or Spousal Lifetime Access Trusts. Essentially, the Husband created a trust for the benefit of the Wife during her lifetime, and upon her death, the trust assets would pass to their three children; and the Wife created a trust for the benefit of the Husband during his lifetime, and upon his death, the trust assets would pass to the children.&nbsp;&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The trusts were designed to utilize the couple&#8217;s Federal Estate Tax Exemptions before those Exemptions were to be substantially reduced beginning in 2013 (which, as it turns out, did not happen), while retaining access to the underlying trust assets through their interests as beneficiaries. However, the Wife died in 2017. Accordingly, the assets of the trust that the Husband created for her passed to the children, thereby ending his access to the assets of that trust.&nbsp;&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The Husband brought an action in court to have the trust rescinded (in other words, revoked) and the assets returned to him, claiming that he did not understand that the trust assets would pass to his children if his Wife predeceased him. The court, relying on the testimony of his attorney, who stated that the trust worked exactly as designed and explained to his clients, held in favor of the children.&nbsp;<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">It Matters a Lot<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">The takeaway for Settlors of an Irrevocable Trust is that irrevocable means irrevocable; they cannot get back whatever money or property they transfer to the trust. The lesson for beneficiaries of those trusts is the same: if the Settlor has a change of heart after the trust is formed and funded, irrevocable means irrevocable.&nbsp;&nbsp;<\/span><\/p>\n<p>If you have any questions about this post or any <a href=\"https:\/\/norrismclaughlin.com\/njbr\/1410\" target=\"_blank\" rel=\"noopener noreferrer\">estate planning and administration matters<\/a>, please contact me at <a href=\"mailto:jjcostellojr@norris-law.com\" target=\"_blank\" rel=\"noopener noreferrer\">jjcostellojr@norris-law.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A recent decision issued by the Supreme Court of Alabama highlights the importance, for both creators and beneficiaries of trusts, of understanding whether a trust is Revocable or Irrevocable, and the consequences that flow from that distinction.&nbsp; &nbsp; Revocable and Irrevocable Trusts Any trust has three players: a Settlor, a Trustee, and a Beneficiary. The [&hellip;]<\/p>\n","protected":false},"author":92,"featured_media":189,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27,165,2],"tags":[37,80,81],"coauthors":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.1 (Yoast SEO v22.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot! - Guardians of Your Will<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot!\" \/>\n<meta property=\"og:description\" content=\"A recent decision issued by the Supreme Court of Alabama highlights the importance, for both creators and beneficiaries of trusts, of understanding whether a trust is Revocable or Irrevocable, and the consequences that flow from that distinction.&nbsp; &nbsp; Revocable and Irrevocable Trusts Any trust has three players: a Settlor, a Trustee, and a Beneficiary. The [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/\" \/>\n<meta property=\"og:site_name\" content=\"Guardians of Your Will\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-08T00:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/norrismclaughlin.com\/njbr\/wp-content\/uploads\/sites\/11\/2022\/12\/Irrevocable-Trust.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1332\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"James J. Costello, Jr.\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"James J. Costello, Jr.\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/\",\"url\":\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/\",\"name\":\"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot! - Guardians of Your Will\",\"isPartOf\":{\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/#website\"},\"datePublished\":\"2021-09-08T00:00:00+00:00\",\"dateModified\":\"2021-09-08T00:00:00+00:00\",\"author\":{\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/950c4559be5d41ea08ff8447a7776947\"},\"breadcrumb\":{\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/norrismclaughlin.com\/njbr\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot!\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/#website\",\"url\":\"https:\/\/norrismclaughlin.com\/njbr\/\",\"name\":\"Guardians of Your Will\",\"description\":\"NJ Beneficiary Rights Law Blog\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/norrismclaughlin.com\/njbr\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/950c4559be5d41ea08ff8447a7776947\",\"name\":\"James J. Costello, Jr.\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/image\/7a61a89ee5527c366254f29d00e1d05e\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f233127ccffb1e8c448e3b46fc187716?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f233127ccffb1e8c448e3b46fc187716?s=96&d=mm&r=g\",\"caption\":\"James J. Costello, Jr.\"},\"sameAs\":[\"http:\/\/wordpress-599075-1937274.cloudwaysapps.com\/attorney_profiles\/james-j-costello-jr\/\"],\"url\":\"https:\/\/norrismclaughlin.com\/njbr\/author\/jjcostello\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot! - Guardians of Your Will","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/","og_locale":"en_US","og_type":"article","og_title":"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot!","og_description":"A recent decision issued by the Supreme Court of Alabama highlights the importance, for both creators and beneficiaries of trusts, of understanding whether a trust is Revocable or Irrevocable, and the consequences that flow from that distinction.&nbsp; &nbsp; Revocable and Irrevocable Trusts Any trust has three players: a Settlor, a Trustee, and a Beneficiary. The [&hellip;]","og_url":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/","og_site_name":"Guardians of Your Will","article_published_time":"2021-09-08T00:00:00+00:00","og_image":[{"width":2000,"height":1332,"url":"https:\/\/norrismclaughlin.com\/njbr\/wp-content\/uploads\/sites\/11\/2022\/12\/Irrevocable-Trust.jpg","type":"image\/jpeg"}],"author":"James J. Costello, Jr.","twitter_card":"summary_large_image","twitter_misc":{"Written by":"James J. Costello, Jr.","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/","url":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/","name":"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot! - Guardians of Your Will","isPartOf":{"@id":"https:\/\/norrismclaughlin.com\/njbr\/#website"},"datePublished":"2021-09-08T00:00:00+00:00","dateModified":"2021-09-08T00:00:00+00:00","author":{"@id":"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/950c4559be5d41ea08ff8447a7776947"},"breadcrumb":{"@id":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/norrismclaughlin.com\/njbr\/will-contests\/does-it-matter-trust-revocable-or-irrevocable-yes-matters-a-lot\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/norrismclaughlin.com\/njbr\/"},{"@type":"ListItem","position":2,"name":"Does It Matter if a Trust Is Revocable or Irrevocable? Yes, It Matters a Lot!"}]},{"@type":"WebSite","@id":"https:\/\/norrismclaughlin.com\/njbr\/#website","url":"https:\/\/norrismclaughlin.com\/njbr\/","name":"Guardians of Your Will","description":"NJ Beneficiary Rights Law Blog","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/norrismclaughlin.com\/njbr\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/950c4559be5d41ea08ff8447a7776947","name":"James J. Costello, Jr.","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/norrismclaughlin.com\/njbr\/#\/schema\/person\/image\/7a61a89ee5527c366254f29d00e1d05e","url":"https:\/\/secure.gravatar.com\/avatar\/f233127ccffb1e8c448e3b46fc187716?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f233127ccffb1e8c448e3b46fc187716?s=96&d=mm&r=g","caption":"James J. Costello, Jr."},"sameAs":["http:\/\/wordpress-599075-1937274.cloudwaysapps.com\/attorney_profiles\/james-j-costello-jr\/"],"url":"https:\/\/norrismclaughlin.com\/njbr\/author\/jjcostello\/"}]}},"_links":{"self":[{"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/posts\/188"}],"collection":[{"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/comments?post=188"}],"version-history":[{"count":0,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/posts\/188\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/media\/189"}],"wp:attachment":[{"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/media?parent=188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/categories?post=188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/tags?post=188"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/norrismclaughlin.com\/njbr\/wp-json\/wp\/v2\/coauthors?post=188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}