Budgeting Financial Planning Estate Planning Exceptions to an Irrevocable Trust An irrevocable trust can be changed under some circumstances By Julie Garber Julie Garber Julie Garber is an estate planning and taxes expert with over 25 years of experience as a lawyer and trust officer. She is a vice president at BMO Harris Wealth management and a CFP. Julie has been quoted in The New York Times, the New York Post, Consumer Reports, Insurance News Net Magazine, and many other publications. learn about our editorial policies Updated on January 29, 2022 Reviewed by Michael J Boyle Reviewed by Michael J Boyle Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics. learn about our financial review board Can an irrevocable trust be changed? Often, the answer is no. By definition and design, an irrevocable trust is just that—irrevocable. It can't be amended, modified, or revoked after it's formed. But there are exceptions to every rule, as the saying goes. Here are some things to consider if you think you're stuck with the terms of a trust that can never be changed. Trustee or Beneficiary Modification or Judicial Modification Terry Vine / Getty Images Some irrevocable trusts are written with instructions to the trustees or beneficiaries allowing the terms of the trust agreement, its formation document, to be modified under specific and limited circumstances. Charitable trusts usually contain provisions to allow modification of the trust agreement to comply with changes in federal tax or other laws. This type of modification can be accomplished using a document signed by the trustee and all the beneficiaries. Typically, current as well as remainder beneficiaries must sign. A remainder beneficiary is a charitable organization that receives the balance of the trust after its income is distributed to other beneficiaries for a period of time. A court may also order judicial modification of a trust when it's petitioned to do so by the trustee and/or beneficiaries. If circumstances have changed and made the administration of an irrevocable trust unreasonably expensive or if its purpose has become outdated, the trustee and/or the trust beneficiaries can request that the terms of the trust be modified or that the trust be completely terminated through mutual agreement or judicial modification. Trust Protector Modification Modern estate plans often incorporate the use of a "trust protector," an independent third party appointed by the trustee, the trust beneficiaries, or a court. If the irrevocable trust document contains provisions allowing for the appointment of a trust protector, one can be hired to examine the facts and circumstances surrounding a desired change to the trust. The trust protector would then make a final determination as to whether the change should be made. If the trust protector recommends that it should, they will either sign the applicable documents making the amendment or seek court approval for the change. Exercise of a Power of Appointment If the trustee or the beneficiaries of the irrevocable trust have been given a lifetime or testamentary "power of appointment," the terms of the trust can be changed for the benefit of current or future beneficiaries. This simply requires signing a document which exercises the power in accordance with the terms specified in the trust agreement. Disposition of Trust Property Although it won't change the provisions of an otherwise irrevocable trust, the sale or other disposition of all the property held by the trust can effectively cause it to be terminated. The trust would still exist, but it would serve no purpose, it would become an empty entity. For example, if an irrevocable life insurance trust or "ILIT" owns a life insurance policy on which the required premiums are not paid, the policy will eventually lapse, leaving the irrevocable trust empty. What Should You Do? Irrevocable trust agreements are generally not easy to read and understand. If you are the trustee or a beneficiary of an irrevocable trust that you would like to change, check the trust agreement for information identifying which state's laws govern the trust's provisions. This section can usually be found toward the end of the trust agreement. It will be titled "Governing State Law" or something similar. Then consult with an estate planning attorney who is familiar with the governing state's trust laws to determine if anything can be done to change the provisions of your otherwise irrevocable trust. Laws can vary considerably from state to state. Frequently Asked Questions (FAQs) Are all trusts irrevocable? There are four primary forms of trusts: living, testamentary, revocable, and irrevocable. As the name suggests, a revocable trust is the opposite of an irrevocable trust. The individual who creates and funds it can revoke and "undo" it at any time, for any reason, and can unilaterally make changes to it without anyone's agreement or permission. Both revocable and irrevocable trusts are living trusts. A testamentary trust doesn't exist until after its creator is deceased. It's formed by the executor of the probate estate according to directives contained in the decedent's last will and testament. Why would anyone form an irrevocable trust if they're so difficult to change or undo? An irrevocable trust provides numerous advantages that wills and revocable trusts don't share. Assets placed in an irrevocable trust can't be reached by your creditors, or by lawsuits or judgments. They don't contribute to your estate and gift tax after your death. This type of trust is a separate entity for income tax purposes as well. You don't have to claim it as income on your own personal return. And both revocable and irrevocable trusts avoid the probate process after your death. Would a revocable trust ever have to change and become irrevocable? A revocable trust automatically becomes irrevocable upon the death of its grantor—the individual who formed and funded it with assets. The grantor is no longer available to make changes to the trust or revoke it, so it's now irrevocable. These trusts typically shut down after distributing their assets to the beneficiaries named in the formation documents. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Superior Court of California, County of Santa Clara. "Can a Trust Be Canceled or Amended?" Fidelity Charitable. "Charitable Remainder Trusts." Thompson Coburn. "Spinning Straw Into Gold: Modifying Irrevocable Trusts." Northern Trust. "Trust Protectors," Pages 1-3. Halliday Financial. "Trust Connection," Page 1. Karen S. Gerstner & Associates, P.C. "Basics - Irrevocable Life Insurance Trusts," Page 6. University of Wyoming. "What Everyone Should Know About Trusts," Page 2. HG.org Legal Resources. "Why an Irrevocable Trust Is Better Than Gifting." The New York Community Trust. "Revocable Trusts and Other Important Documents."