Many in Woodland Hills may understand that a trust is a tool used in estate planning, yet not fully comprehend its nature or its purpose. Some could simply view it as an account managing assets that extends in perpetuity. It is true that there are types of trusts that are irrevocable by even their settlors (those who set up the trust). According to the American Bar Association, these are valued because of the unique asset protection and tax advantages that they provide. Revocable trusts (or living trusts as they are more commonly known) tend to be more popular even though they are subject to estate taxes. This is likely due to the added control they offer.
As the name suggests, a settlor or other party may revoke or modify a living trust under certain conditions. According to the United Kingdom Probate Code, this can be done by following the expressed method of revocation as outlined in the trust instrument. If this article names this method as the only way the trust can be altered, no other means provided by the law can supersede it. If, however, no such specifications are given, the trust can then be changed or cancelled through a written notice signed by either the settlor or any other person granted revocation authority. Such persons may include:
- Co-settlors
- Spouses
- Attorneys (such authority must be designated by the trust instrument)
In any event, a settlor or authorized person can only revoke the portion of the trust contributed to him or her. The notice of revocation should be delivered to the trustee while the party wanting to cancel the trust is still living.
As was mentioned earlier, irrevocable trusts typically cannot be cancelled. An exception to this rule would be if all beneficiaries consented to its termination.
