Estate, Powers and Trusts, § 7-1.9: Revocation of trusts
A trust is an estate planning tool that can be used to give property to those you care about, either while you are still living or after you pass away. To set up a trust you as the trust creator create the terms of the trust with the trust document. In the trust document you name a trustee, the beneficiaries, and the rules related to how the trustee is to manage the trust. You would then transfer assets to the trust. A trust can be revocable or irrevocable. In general, a revocable trust can be changed or revoked. Under certain circumstances event an irrevocable trust cannot. New York probate law has special provisions related to how a trust can be revoked. Under New York Estate, Powers and Trusts, section 7-1.9, in order to revoke a trust the creator must indicate the intention to revoke in writing using the same formalities required to record the conveyance of real property. If the trust was recorded in the office of the clerk or registrar, then the revocation document must be recorded in the same office. Because the rules related to creating and revoking a trust are complicated, it is important to contact an experienced New York Estate Lawyer who will help you make sure that your trust and other estate planning documents are executed or revoked in a manner that is consistent with New York law.Related Statutory Provisions
- Interest remaining in the creator of a trust: Estates, Powers and Trusts, section 7-1.7
- Duration of trusts for benefit of creditors: Estates, Powers and Trusts, section 7-1.8
- Revocation of lifetime trust by will: Estates, Powers and Trusts, section 7-1.16
If you create a revocable trust you can change or terminate it at any time during your lifetime. This allows you to modify the trust due to such changes in your family or changes in your finances. For example, you may want to change your trust if you get married, get divorced, have a child or have a grandchild. You may also want to change it if you or a family member suffers a disability. However, it is not necessary for there to be some sort of family change or financial change for you to change your trust. You may change the terms of the trust simply because you change your mind about what property you want to include in the trust or who you want to benefit from it. However, when you pass away your revocable living trust will become irrevocable, and it cannot be changed.Example
In Perosi v. Ligreci, 948 N.Y.S.2d 629 (N.Y. App. Div., 2012), Nicholas LiGreci created an irrevocable trust and named his brother as trustee. Nicholas later named Linda Perosi as his attorney-in-fact, giving her power to act as his agent on all of his financial matters, including the power to name a trustee of any trust. With the consent of the beneficiaries of the trust, Perosi executed an amendment naming a new trustee and a new successor trustee pursuant to EPTL 7–1.9. Before the Nicholas signed the amendment, he died. The original trustee sought to set aside the amendment arguing that the trust was irrevocable and that the attorney-in-fact did not have power to change it. The court ruled in favor of the attorney-in-fact. Under EPTL 7-1.9 an irrevocable trust can be amended as long as all of the beneficiaries agree. Also, while New York law prohibits an attorney-in-fact from amending a will, there is no law which prohibits an attorney-in-fact from amending a trust.Estate, Powers and Trusts, section 7-1.9- Revocation of trusts
- Upon the written consent, acknowledged or proved in the manner required by the laws of this state for the recording of a conveyance of real property, of all the persons beneficially interested in a trust of property, heretofore or hereafter created, the creater of such trust may revoke or amend the whole or any part thereof by an instrument in writing acknowledged or proved in like manner, and thereupon the estate of the trustees ceases with respect to any part of such trust property, the disposition of which has been revoked. If the conveyance or other instrument creating a trust of property was recorded in the office of the clerk or register of any county of this state, the instrument revoking or amending such trust, together with the consents thereto, shall be recorded in the same office of every county in which the conveyance or other instrument creating such trust was recorded.
- For the purposes of this section, a disposition, contained in a trust created on or after September first, nineteen hundred fifty-one, in favor of a class of persons described only as the heirs, next of kin or distributees (or by any term of like import) of the creator of the trust does not create a beneficial interest in such persons.
- A testamentary or lifetime trust wholly benefitting one or more charitable beneficiaries may be terminated as provided for by subparagraph two of paragraph (c) of section 8-1.1 of this chapter.
To learn more about probate, wills, trusts and other estate planning documents, contact Stephen Bilkis and Associates. We will help create a trust for you that is consistent with your specific goals. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your estate issue.