Four Differences Between a Trust Reformation and Modification

When the terms of a trust no longer give the same effect to the intent of the person who created it, interested parties can turn to the California courts for guidance. It may be possible to simply amend or revoke the trust if the settlor of the trust is still alive. After the settlor has passed, however, the trust typically becomes irrevocable. At that point, a trust modification or trust reformation may be an option. Each of these actions requires the approval and guidance of the court.

Key Differences Between Trust Reformations and Trust Modifications:

As an interested party needing to address a problem with the way a trust is written, you may be wondering what the difference is between a trust reformation and a trust modification. The following is an overview of some of the key differences:

  1. First of all, a trust reformation re-writes an inaccuracy in a trust and is treated as if the trust had been written that way since the beginning. A trust modification, however, changes the trust on a going-forward basis.
  2. Additionally, a trust reformation is designed to correct an inaccuracy caused by fraud or mistake. A trust modification, however, is designed to modify the terms of a trust to address an ambiguity within the trust or circumstances that have changed since the time the trust was written.
  3. Furthermore, All beneficiaries of a trust must consent to a trust modification.
  4. Lastly, the aggrieved party must present evidence that there was an error caused by mistake or fraud in order to obtain a trust reformation.

Whichever option is right for your situation, it is important to seek guidance from an experienced attorney. If you have found this article helpful, we encourage you to share it with your family and friends on Facebook!

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Scott Grossman

Scott Grossman

Attorney

The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307
 

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