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 circ*mstances 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
Revoking a trust
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.
New York Estate Lawyer
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 800.696.9529 to schedule a free, no obligation consultation regarding your estate issue.
FAQs
In general, under EPTL § 7-1.9 a living Grantor can terminate or amend an Irrevocable Trust provided that those with a beneficial interest under the Trust consent in writing.
What is the revocation clause in a trust? ›
Trusts are either revocable or irrevocable. As suggested by its name, a revocable trust is a trust that can be modified or revoked by the settlor after it has been signed. An irrevocable trust, on the other hand, cannot be modified or revoked by the settlor once it has been signed.
Does a beneficiary on a bank account override a trust? ›
Much like how a designated beneficiary supersedes a will, it usually also overrides a trust.
Why should I not list my trust as a primary beneficiary? ›
The primary disadvantage of naming a trust as beneficiary is that the retirement plan's assets will be subjected to required minimum distribution payouts, which are calculated based on the life expectancy of the oldest beneficiary.
How do you revoke a trust in NY? ›
To revoke a trust created under New York law, Section 7-1.9(a) of the Estates, Powers & Trusts Law (“EPTL”) simply requires the written consent of the Trustmaker and all the trust beneficiaries. Once the trust is revoked, the trust assets can be returned to the Trustmaker, effectively “undoing” the property transfers.
How long do you have to contest a trust in New York? ›
Filing a trust contest proceeding.
If the heirs and trustee cannot resolve the matter, the heirs can file a petition contesting the trust with the New York Surrogate Court. A trust contest proceeding must be filed with the Court no later than six years after the settlor's death.
What are the two rules regarding revocation? ›
The rule of offer and acceptance, as well as the rule of consideration, play a fundamental role in determining when a contract can be revoked. By familiarizing oneself with these rules, individuals and businesses can engage in contracts with a clearer understanding of their rights and obligations.
What are the three types of revocation? ›
Types of Revocation
Revocation by operation of law. Mutual cancellation by both parties. Revoking an offer before it is accepted. Revoking an acceptance before consideration takes place.
What are the three ways a trust can be terminated? ›
There are different types of trust termination, including revocable trust termination, irrevocable trust termination, termination by agreement, and termination by operation of law.
What can override a beneficiary? ›
The Will will also name beneficiaries who are to receive assets. An executor can override the wishes of these beneficiaries due to their legal duty.
The executor of an estate is named in a will. An executor must be given permission by a probate court to withdraw money from the account and close it. The court will want to see proof that you're the executor and a certified copy of the death certificate before granting access to the money.
Can an executor override a beneficiary on a bank account? ›
An executor cannot override a beneficiary's rights in specific ways. Firstly, they must honor the wishes stated in the will, ensuring the assets are distributed accordingly. Legal boundaries restrict any alterations to the distribution plans detailed in the will.
What assets should not be placed in a revocable trust? ›
Apart from cash and medical and health savings accounts, many things are considered that they cannot be placed in the revocable trust. For instance, certain retirement accounts (401-K, IRA, 403-B) and vehicles.
What are the disadvantages of putting your house in a trust? ›
One disadvantage of placing your house in a trust is the loss of direct ownership. Transferring your property to a revocable living trust makes the trust the legal owner. While you retain control as the trustee, this change in ownership may affect your ability to mortgage or refinance the property.
What are the disadvantages of a revocable trust? ›
The biggest downsides of a revocable trust include the following:
- Your trust assets aren't protected from creditors.
- You may not qualify for needs-based Medicaid coverage for a nursing home because the assets held in trust are still counted as resources when determining benefits eligibility.
Under New York Estates, Powers and Trusts section 7-1.12, a special needs trust, also referred to as a supplemental needs trust, is a special type of asset protection trust that is designed specifically to help provide for the needs of people with severe disabilities.
What are the requirements for a trust to be executed in NY? ›
(a) Every lifetime trust shall be in writing and shall be executed and acknowledged by the person establishing such trust and, unless such person is the sole trustee, by at least one trustee thereof, in the manner required by the laws of this state for the recording of a conveyance of real property or, in lieu thereof, ...
What are the powers of a trustee in the Probate Code? ›
What powers does a trustee have?
- make reasonable repairs,
- insure the property,
- sell assets,
- make prudent investments,
- pay certain administrative bills and expenses, and.
- make distributions and payments to the beneficiaries according to the trust document.
One key difference is that the Trustee is appointed in a Living Trust and an Executor/Personal Representative is named in a Last Will and Testament. The second major difference is that a Trustee does not need to go through Probate to settle an estate because Living Trusts avoid Probate Court.
