When you set up a California trust, you get even more protection when it is irrevocable. This largely separates you from legal ownership of the assets for items such as Medicaid trusts. However, irrevocable usually means that the trust’s terms cannot be changed, and the assets cannot be removed. Yet, there are some circumstances in which an irrevocable trust can be amended.
Most irrevocable trusts cannot be changed
Nonetheless, you should keep in mind that an irrevocable trust, under most circumstances, cannot be changed, and any exceptions to this rule are limited. If you form an irrevocable trust with the later expectation that you can change it, you may end up disappointed. In fact, the grantor would usually be prohibited from petitioning for changes. It would be unfair for him or her to benefit from an irrevocable trust and then get a do-over.
There are limited exceptions
The trustee and the beneficiaries may be able to make changes to the trust, but it would first require the court’s approval. If the purpose of the trust is outdated, or it has become too expensive to administer, a judge may allow some changes. In addition, some property could be sold or disposed of, and the trust could become obsolete. For example, if a life insurance policy is the basis of the trust, and it has lapsed, the terms of the trust may be changed. However, irrevocable generally means unchangeable, and property placed in the trust would remain there.
This is why it is essential to get an irrevocable trust right when it is established. You should consult with an attorney who is well-versed in trusts and trust litigation before doing anything because the consequences of a mistake could be grave. Trusts have definite benefits, but you should consult with a professional when establishing the trust.