Irrevocable House Trust vs. Will

[NeonMoon]

Also, let's say something was done w/o me knowing about it (which would not be legal) since I would have to agree to it... Correct??? Wouldn't I have been informed that I am no longer the Trustee?

 

[Taxing Matters]

I read thru the document and it says..."The Grantor may discharge a Trustee, Co-Trustee, etc. for cause or without cause, absolutely in their sole discretion....... I guess this means that my mom can remove me as Trustee of the Trust. Would it even hold up at this point since it is an Irrevocable Trust?

An irrevocable trust is one in which your mother can't undo the whole trust and take back all the trust assets for herself. Irrevocable doesn't mean unchangeable. So changes like replacing the trustee may be done if the trust document has a provision allowing for that. Making a change in the trustee does not undo the trust, it simply changes who manages the trust. So long as she is not mentally incompetent she retains that power and may exercise it any time. In order for that to go smoothly she would need to promptly inform you that you've been removed as trustee and either she or the new trustee would need to promptly inform anyone the trust deals with (like financial institutions) of the change in trustee too.

 

[Zigner]

Also, let's say something was done w/o me knowing about it (which would not be legal) since I would have to agree to it... Correct??? Wouldn't I have been informed that I am no longer the Trustee?

You don't have to agree to it or even need to be informed. It would, of course, be wise to inform you so that you no longer try to take any actions based on your belief that you are the trustee.

 

[NeonMoon]

An irrevocable trust is one in which your mother can't undo the whole trust and take back all the trust assets for herself. Irrevocable doesn't mean unchangeable. So changes like replacing the trustee may be done if the trust document has a provision allowing for that. Making a change in the trustee does not undo the trust, it simply changes who manages the trust. So long as she is not mentally incompetent she retains that power and may exercise it any time. In order for that to go smoothly she would need to promptly inform you that you've been removed as trustee and either she or the new trustee would need to promptly inform anyone the trust deals with (like financial institutions) of the change in trustee too.

As far as I know, it's unchanged. Since I am the trustee and manage the "house" trust, I am still get the tax bill that I pay/manage. I am still registered in NYC and being the trustee if that makes sense. I my brother had been named, he would be getting the bills to pay and that is not the case.

 

[NeonMoon]

UPDATE: I have a copy of my mother's updated will and I have the original Trust document in my possession ( since I am the Trustee). I have an attorney and he will review it tomorrow (both documents).

 

[quincy]

UPDATE: I have a copy of my mother's updated will and I have the original Trust document in my possession ( since I am the Trustee). I have an attorney and he will review it tomorrow (both documents).

Updates are always appreciated on this forum, so thank you for returning. It is good that you have an attorney working with you now.

 

[NeonMoon]

I just came across a note from my sibling where he states he had my mom's attorney change the irrevocable trust's terms. I am the sole trustee of my mom's irrevocable trust. I get all the paperwork for taxes, etc. If this were true, would I have to be notified that there was a change made since acting as trustee I would have to be made aware of the changes to carry out?

 

[Zigner]

I just came across a note from my sibling where he states he had my mom's attorney change the irrevocable trust's terms. I am the sole trustee of my mom's irrevocable trust. I get all the paperwork for taxes, etc. If this were true, would I have to be notified that there was a change made since acting as trustee I would have to be made aware of the changes to carry out?

Not necessarily, although you likely should have been.

 

[NeonMoon]

Wouldn't it be unethical if the lawyer didn't inform me. I have taken the Irrevocable Trust Documents out and re-read everything. I am the sole Trustee that my mom named to carry out the wishes of the trust. In this case, I should be informed, correct?

 

[Zigner]

Wouldn't it be unethical if the lawyer didn't inform me. I have taken the Irrevocable Trust Documents out and re-read everything. I am the sole Trustee that my mom named to carry out the wishes of the trust. In this case, I should be informed, correct?

It might be...but unethical lawyers aren't unheard of.

 

[NeonMoon]

I've known him for 40 years and his dad was my family's lawyer. You would think he would have some common sense to inform me.

 

[Zigner]

I've known him for 40 years and his dad was my family's lawyer. You would think he would have some common sense to inform me.

Your question was whether or not you should have been notified. I answered that question, with no implications about the actual situation. Gather more information before coming to a conclusion.

 

[quincy]

I just came across a note from my sibling where he states he had my mom's attorney change the irrevocable trust's terms. I am the sole trustee of my mom's irrevocable trust. I get all the paperwork for taxes, etc. If this were true, would I have to be notified that there was a change made since acting as trustee I would have to be made aware of the changes to carry out?

From what did you quote? Attribution is important.

You should have your attorney review the amendments to the trust.

Here is New York’s 2023 “decanting” statute (10-6.6):
https://law.justia.com/codes/new-york/ept/article-10/part-6/10-6-6/

 

[quincy]

In New York State, an irrevocable trust generally cannot be amended without the trustee's knowledge because the trustee is a key party responsible for administering the trust. Here’s a detailed explanation:
1. General Rule on Amending Irrevocable Trusts in NY

• Irrevocable trusts are designed to be unchangeable after they are established. However, amendments can occur under specific circumstances, such as:
  • Provision in the Trust Document: If the trust itself includes language allowing amendments under certain conditions, those conditions must be followed.
  • Consent of All Beneficiaries: Under New York's Estates, Powers and Trusts Law (EPTL) § 7-1.9, an irrevocable trust can be amended if:
    • All beneficiaries agree to the modification.
    • The grantor also consents (if still living).
  • Court Approval: A court may approve an amendment if there is a compelling reason, such as correcting an error or addressing unforeseen circumstances.

2. Trustee’s Role in Amendments

• The trustee must typically be notified of amendments because:
  • They are responsible for administering the trust according to its terms.
  • They need to ensure any changes comply with the trust and applicable law.
  • Amendments often require trustee involvement for execution or implementation.

3. Court Intervention

• If a trust amendment occurs through a court order, the trustee must be given notice and an opportunity to be heard, as they are an interested party.

4. Potential Issues with Non-Disclosure

• Amending an irrevocable trust without the trustee’s knowledge can raise significant legal concerns, including:
  • Breach of Fiduciary Duty: If the trustee is not informed, they cannot fulfill their fiduciary responsibilities.
  • Fraud or Improper Conduct: Lack of notice could suggest improper actions by the grantor or beneficiaries.
  • Legal Challenge: The trustee or other parties could challenge the amendment in court, potentially invalidating it.

Conclusion:
In New York State, amending an irrevocable trust without the trustee’s knowledge would likely be improper unless there is an extraordinary legal or procedural basis for doing so.

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