When someone decides that they are absolutely sure what they want to do with their estate and assets for all time, they can enter into an irrevocable trust that brings with it many tax advantages. After the death of the person who has entered into the trust, the assets in the trust aren’t subject to the withholding to which other assets are subject. However, if you’ve entered an irrevocable trust and wish to create changes in it, you have a bit of a problem on your hands. A few ways to approach breaking an irrevocable trust exist, but none of them work every time. An irrevocable trust is considered its own entity and you have, on record, relinquished all of the assets in it.
- Skill level:
Contact the lawyer who set up the trust and tell them that you wish to break the trust. Give them your reasons and ask if he can work with the beneficiaries to have the agreement resigned. If all parties agree to work together, then everyone can sign an agreement to dissolve the trust.
Determine that you are certain you wish to try to break the trust. It is a difficult, costly procedure and there is no guarantee that it will work.
Hire a lawyer who is not associated with the trust if the beneficiaries and the trust’s lawyer(s) refuse to resign the trust with you.
Explain that you wish to file papers to petition the court to break the trust. Offer to go to negotiation with the lawyers and beneficiaries before papers are filed, if your lawyer advises you to do so.
Attend mediation and try to find a solution that keeps the matter out of the courts. Explain the benefits to the other party and the benefits to yourself. If that doesn’t work, then be ready to go to court.
Gather evidence that supports your case. You will have to show why you created an irrevocable trust in the first place. Show financial statements and property records from the time of the trust’s creation, and then show why you think it should be reconsidered now. If you feel you were unduly influenced to sign the irrevocable trust, explain why and how.
File papers with your attorney and notify the other party in the matter. Plan a court strategy with your lawyer and attend the hearing. Abide by the decision of the court.
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