Modification of Irrevocable Trusts in Missouri
The Missouri Uniform Trust Code set forth a number of procedures by which interested parties in an irrevocable trust can request that the Court modify its provisions. A trust typically becomes irrevocable after the settlor/trust-creator dies or becomes incapacitated. Circumstances change and things unforeseen by the settlor will often arise. To that end, Missouri sets forth certain ways in which an irrevocable trust may be modified so that beneficiaries are not unduly burdened with trust provision’s which are no longer in anyone’s best interests.
There are two specific ways to modify an irrevocable trust. First, the Court may modify a trust’s terms if circumstances have arisen which were not anticipated by the settlor, and the modification will further the purposes of the trust. Section 456.4-412, RSMo. Second, a trust may be modified if it has become uneconomical under Section 456.4-414, RSMo. The general rule of thumb as to whether a trust is uneconomical is if the value of the trust property is insufficient to justify the cost of administration.
In addition, there is a general method to modify an irrevocable trust that may be accomplished if the beneficiaries consent under Sections 456.4A-411 and 456.4B-411, RSMo. Specifically, if all of the beneficiaries consent, the trust may be modified or terminated even if the modification is inconsistent with a material purpose of the trust. The modification may include the reduction or elimination of the interests of some of the beneficiaries, an increase in the interests of others, a change in the time or amounts of payments and distributions to beneficiaries, or provide for termination of the trust at a time earlier or later than that specified by its terms. Note further that the Court may sometimes modify the trust even if all of the beneficiaries do not consent if the Court is confident that the interests of all non-consenting beneficiaries will be adequately protected.
Trust litigation and modification can be very complex. Contact with questions.