Are you wondering is an asset protection trust revocable? Asset Protection Trusts are normally “irrevocable” meaning that people cannot just assign them away like other assets. However, there are four ways to revoke or amend an Asset Protection Trust if you desire.
A Trust Protector May Be Able to Modify or Revoke the Trust.
One way to revoke or amend an Asset Protection Trust is through a trust protector. A trust protector is an independent party (usually an attorney or trusted family member) that the trust document may name. Sometimes the trust documents names a specific person, and sometimes it simply allows for the grantor or beneficiaries to app0int one. (There is usually an entire section dedicated to naming a trust protector and listing their powers.) That person can serve as the decision maker regarding changes to the trust in specific scenarios. The trust agreement should specify when, where, and how the trust protector can make a modification. The trust protector can take action based on those guidelines.
A Trustee Can Decant the Trust to a New Trust.
A trustee can decant an Asset Protection Trust. Decanting is the process of transferring assets to a new trust and changing the terms of the original trust agreement. This process requires a trustee to manage the assets, calculate legal requirements, and manage required paperwork. Decanting can be beneficial when one or more beneficiary’s circumstances have changed. It can also be useful if you need to make a modification due to changed laws.
The Grantor Can Use Special Power of Appointment to Transfer Trust Assets.
The trust may or may not include a special power of appointment. (Most Asset Protection Trusts do not.) However, if the trust does include the provision, the grantor can transfer trust assets from one trust to another. Also, the grantor may also be able to use a special power of appointment to transfer the trust assets to someone else, such as a spouse or child.
Revoking or Amending a Trust By Court Order on consent of all of the beneficiaries
Depending on the terms of the trust and state laws, it may be possible to revoke or amend an asset protection trust with the consent of all of the beneficiaries. This is typically done through a court order and requires the participation of both parties. You should consult an attorney to make sure you follow all legal requirements and procedures.
Arizona has a specific statute about modifying or terminating a irrevocable trust by consent. Most other states have similar laws.
Still Wondering Is An Asset Protection Trust Revocable? We Can Help.
Your Asset Protection Trust is revocable. It can be unwound or simply updated. But you need an experienced asset protection attorney to help you. If you want to dissolve or change your trust, just give us a call at 602-443-4888. We’d love to help.
At SWPL, our experienced attorneys are here to help you through the process of revoking or amending your Asset Protection Trust. We understand the legal landscape and its complexities. We will work with you to ensure that your trust is amended or unwound in accordance with all applicable laws. Contact us today for a consultation and learn more about how we can help make sure your asset protection trust is set up correctly.