A living trust is a very popular estate planning tool, in large part because there are so many estate planning goals and objectives that can be furthered using a living trust. Once a trust has been established, however, there may come a time when the desire to revoke or terminate the trust arises. To ensure that a revocation or termination is handled properly, you should work with an experienced New York estate planning attorney. To give you an idea of what is involved, however, the Long Island trust attorneys at Eghrari Law Firm explain what you need to know about revoking or terminating a living trust in New York.
Trust Basics
The creation of a trust agreement establishes a trust which is a legal arrangement that allows the Settlor (creator of the trust) to appoint a Trustee who is responsible for managing the trust assets and administering the trust for the benefit of the beneficiary or beneficiaries designated by the Settlor. A trust can be established during the life of the Settlor, referred to as a “living trust” or a “lifetime trust” or it can be created via a provision in the Settlor’s Last Will and Testament, in which case it is referred to as a “testamentary trust.” A living trust can also be revocable or irrevocable.
Revoking or Terminating a Revocable a Living Trust in New York
Whether a trust can be revoked or terminated as well as the process for revoking or terminating a trust depends in part on who wants to revoke or terminate the trust. New York law views all living trust as irrevocable unless the trust agreement specifically states that the trust is revocable. If the Settlor wants to revoke or terminate a trust and the trust agreement clearly makes it revocable, the process of revoking or terminating the trust is relatively simple. New York law only requires the Settlor (or anyone else authorized in the trust agreement to revoke or terminate the trust) to put the intent to revoke or terminate in writing, have the instrument witnessed, and deliver a copy to at least one Trustee (unless the person revoking/terminating the trust is the sole Trustee).
Revoking or Terminating an Irrevocable Living Trust in New York
If the trust in question is an irrevocable living trust, it stands to reason that the trust would be – irrevocable. In fact, however, an irrevocable trust is not irrevocable in New York. New York law allows for the revocation or termination of an irrevocable living trust if all required parties consent in writing to the revocation or termination. Typically, this means that the Settlor, Trustee(s), and all qualified beneficiaries must consent to the revocation or termination of the trust. If the original trust agreement was filed in the Office of the Clerk or Office of the Register, then the revocation or termination should also be filed with the same office.
Terminating an Uneconomical Living Trust
Sometimes, it becomes economically unfeasible to continue the administration of trust. For example, if the value of the trust assets has diminished to the point where the trust expenses are likely to exceed the available assets, New York law allows for the termination of the trust by judicial Order. A Trustee or beneficiary of the trust may petition the appropriate Surrogate’s Court to have the trust terminated.
Do You Have Questions about Revoking or Terminating a Trust in New York?
For more information, please join us for an upcoming FREE seminar. If you have questions about how to revoke or terminate a trust in New York, contact the Long Island trust attorneys at Eghrari Law Firm by calling us at 631-265-0599 to schedule your appointment.
What Happens to an Unclaimed Inheritance in New York?
See Larger Map
Get Directions