ESTATE PLANNING: Who can amend the trust?

2013-06-22T15:10:00Z ESTATE PLANNING: Who can amend the trust?Christopher W. Yugo Times Business Columnist nwitimes.com
June 22, 2013 3:10 pm  • 

Q: Can I amend my father’s trust using the power of attorney that he gave me? If not, is there any other way to amend the trust?

A: I’m going to make three big assumptions here. The first one is that your father is still alive. If your father is deceased, the power of attorney can’t be used. The second assumption is your father is incapacitated in some way and he is unable to handle his affairs. If your father isn’t incapacitated then he may have some serious issue with you messing with his trust agreement. The final assumption is that the trust can be amended.

Assuming that your father’s trust can be amended and he is incapacitated but alive, you might be able to use the power of attorney to amend his trust. You should check the power of attorney to determine if it grants the attorney in fact the authority to amend trust documents. The ability of an attorney in fact to amend the principal’s trust is limited to the authority granted in the power of attorney.

Now assuming that you have the authority to amend your father’s trust, you’ll want to remember an attorney in fact is a fiduciary and you have obligations to the grantor. If you are attempting to change something in the trust that benefits you personally, there are likely some serious self-dealing issues. As a fiduciary, you have to be careful when taking actions that benefit you personally. If it appears that you are taking some action that benefits you personally, you may be breaching your duty.

Assuming that you have the authority to amend the trust and you can dodge the self-dealing issues, you need to look at the trust and determine if the trust expressly authorizes an attorney in fact the authority to amend it. I think you will find most trusts don’t authorize someone other than the grantor to amend it. There might be a provision that makes the power to amend personal to the grantor and restricts someone other than the grantor from amending it.

On the other hand, you might find some language in the trust that allows an attorney in fact to amend anything in the trust except to change the beneficiary designation. If there is language in the trust affecting the ability to amend it, you will want to make sure that you act accordingly.

If you don’t have the authority to amend the trust or if the trust restricts the amendments, you might need to seek a court order. You can always docket the trust and petition the court.

Now even if you can amend the trust, I suggest you think long and hard before amending the trust. Is there really a valid reason to amend it? I’m not sure I’m comfortable with someone substituting his or her judgment for that of a grantor. An estate plan is very personal and proper deference should be given to the creator. Be careful trying to set aside a grantor’s instructions, even if you can. It may be legally viable but morally questionable.

Christopher W. Yugo is an attorney in Crown Point. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chrisyugolaw@gmail.com. Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

Copyright 2014 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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