Recently, a family member asked me a question that many people probably wonder about—she wanted to know whether or not a trustee can make changes to a trust after someone dies.
In answering this question, I think some background information is important. There are three positions for every trust. First, there are the people who create it, the “Trustor(s).” The Trustor(s) are the people who transfer their property into the trust. Second, are the people who manage the assets placed into the trust, the “Trustee(s).” Now, for a revocable living trust, the Trustee(s) most often are the same people as the Trustor(s) as long as they are alive and competent. Finally, there are the people who benefit from it, the “Beneficiary/ies.” Again, during their lifetimes, the Trustor(s) are also typically the beneficiary/ies of a revocable living trust they create.
Now, the Trustors of a revocable living trust can amend or even revoke it as long as they are alive and competent. Written into the trust document itself is a provision designating who will step in and manage the affairs should a Trustee become unwilling or unable to act. For a married couple, what this typically means is that the other spouse will become a sole manager. In cases where one spouse has passed away or both of them become incapacitated, then a named successor or successor(s) will step in as Trustee or Co-Trustees.
The trust document itself should include instructions regarding how the trust may be amended. So, in order to make changes to the trust itself, a formal amendment must be prepared and signed by both the Trustor(s) as well as the Trustee(s). So, going back to the question, the Trustor(s) or creator(s) of the document are the ones who have the power to make changes or even revoke it during their lifetime, and the Trustee(s) sign onto any changes made. But, when a person passes away, their revocable living trust then becomes irrevocable at their death.
By definition, this irrevocable trust cannot be changed. For married couples, this means even a surviving spouse can’t make changes as to their spouse’s share of the assets. And this is what most people want, because it ensures their property goes to who they want after the surviving spouse dies, and not even a surviving spouse can change it. (That doesn’t mean the spouse can’t have any access to the money after the first spouse’s death, but it does mean that ultimately, whatever is left over will go to the beneficiary/ies designated by the first spouse to die.)
Typically, in an AB trust, the surviving spouse will act as trustee over both trusts, of which they have full authority to make changes to the “A” Trust, also known as the Survivor’s Trust, because it remains revocable while they are alive. And they may have the power to change the named successor trustees for both the A and the B trusts, but they can’t change the distribution plan of the B trust.
Bottom line: a trustee can NOT make changes to an irrevocable trust they are administering.
If you have any questions about your estate plan, we invite you to schedule an appointment with one of our attorneys.