What rights does a Grantor have regarding their irrevocable Trust?

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What rights does a Grantor have regarding their irrevocable Trust?

Can the Grantor change the trustee(s) and trust company that are currently in place with a bank’s trust department and new trustees? What is required to make this change? I am the Grantor’s daughter. Dad wants me to prepare the appropriate paperwork and file the request with the court. Please outline the steps that need to be taken. I already have a letter from the current trust company stating that they will transfer the Trust to a new trust company when they receive the court order. What items should be included in the request to the court? Is there a specific form that I should provide to the court?

Asked on March 4, 2014 under Estate Planning, Kansas

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

What is an irrevocable trust? A trust is irrevocable when the person who created the trust ("settler") cannot change the terms of the trust or terminate the trust.   You can be sure a trust has been intentionally created as irrevocable when the language of the trust says it is.  Otherwise, a trust becomes irrevocable when the person who created the trust has died.

What is a beneficiary of a trust? Beneficiaries are persons (including corporations or charities) who have a beneficial interest in the assets of the trust.

There are different kinds of beneficiaries? Yep, and under the Ohio Trust Code ("OTC"), the kind of beneficiary you are will determine the information you have a right to receive from the trustee.  Not all beneficiaries are entitled to receive all kinds of information regarding the trust.   The trustee must determine what category a beneficiary falls in when it is time to provide them with information.  What a beneficiary is entitled to receive depends on whether they fall into two specific categories:

  1. Current beneficiary is a person who receives or is permitted to receive distributions of trust income or principal on the date the beneficiary’s status is determined.
  2. Qualified beneficiary is a beneficiary who, on the date the trustee determines the beneficiary's qualification, is 1) a current beneficiary, 2) a contingent beneficiary who would receive or would be permitted to receive distributions of trust income or principal if the interests of the then-current beneficiary terminated on that date, but the trust itself would not terminate;  or 3) a remainder beneficiary who would receive or would be permitted to receive distributions of trust income or principal if the trust terminated on that date.

Why is the date a trust was created or became irrevocable important? In the last decade the State of Ohio adopted the OTC which provides different rules for trusts created, or those that became irrevocable, on or after January 1, 2007.  The OTC also governs the type of information a trustee is required to give beneficiaries.

What about my rights as a beneficiary under a revocable trust? Revocable trusts are those that may be altered or revoked by the person who created them.  Even though the OTC was meant to cover revocable trusts, during the lifetime of the settlor of a revocable trust, the trustee’s duties to inform and report are owed exclusively to the settlor, even if the settlor has become incapacitated.

Answer: I suggest that grantor consult with an attorney in his or her locality that practices Wills and trust law to review the trust and give opinions. One in your locality can be found on attorneypages.com.

The trust should state the process re possible change of the trustee.


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