Changing a Trust after death

A recent article regarding Whitney Houston’s estate highlights something that is both good and bad about the estate planning process – it is not over, even after it’s over (for you, that is).  When I started practicing law, I used to think that once a client died, his or her Will or Revocable Trust was “set in stone.”  I think that this idea gave me comfort that a client’s work, something that I helped to facilitate, would be implemented exactly as written.

This fairy tale is simply not a reality, and frankly, that’s okay.  Whitney Houston’s case is a modern example of changing a trust after the trust grantor is gone.  In that case, the trustees believe that the current payment schedule from the trust for Ms. Houston’s daughter, who is 19 years old, will be exposed to many outside influences to her detriment.  Therefore, the trustees want to alter the trust terms so that the intent of the trust, namely, providing for her daughter’s maintenance and support, can be accomplished long into the future.  The fear, it would seem, is that large payments could result in a waste of trust assets.

From this article, we really don’t have much information to really understand this case.  It does, however, remind us that one of the keys in administering a trust is to meet the grantor’s objectives (hopefully these are discernible from the language of the trust or by outside evidence).  Occasionally, the language of a trust cannot meet those objectives.  In Florida and in most states, trustees can petition a court that has jurisdiction over the trust to modify that language.

To make some sense of this, let’s imagine that you created a trust for your children that provides for their health, support and education until they reach age 25, at such time the trust assets are distributed to them.  When you created this trust, your children were typical teenagers who got into trouble every now and again, but nothing major.  After your death, imagine that a child becomes addicted to cocaine – at age 25, he will get access to all of his trust!  Wouldn’t it be helpful to change this trust so that the trustee can suspend or withhold distributions?

While you may not be a celebrity, if you have any assets to pass to loved ones (including life insurance), you should be comforted in knowing that your trustees may be able request a court modification of your trust after you are gone.  That way, unforeseen circumstances will not frustrate your personal and financial goals for your family.