Some trusts are irrevocable at the time they are created. Some trusts start out as revocable trusts and then become irrevocable trusts. For example, a revocable living trust typically becomes irrevocable after the person or persons who established the trust are incapacitated or deceased.
What do you do if there is a situation that has developed that would require a change in the trust? You would think that the word “irrevocable” would mean that the trust cannot then be amended or changed. However, the set of statutes we have in Kansas, that are referred to as the “Kansas Uniform Trust Code” provide some flexibility. An irrevocable trust can be amended “upon consent of the settlor (person who established the trust) and all qualified beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust.” This means that the person who created the trust and all beneficiaries together can choose to amend an irrevocable trust and this can be done without needing a court order to do so. This is true in most states.
The Kansas Uniform Trust Code also provides that an irrevocable trust can be amended by the beneficiaries with court approval, even if the Settlor is incapacitated or deceased if the court “concludes that modification is not inconsistent with a material purpose of the trust.”
Not all beneficiaries have to be in agreement for a court to approve the amendment or modification of a trust. The statute goes on to say that even if not all of the qualified beneficiaries consent to a proposed modification of the trust the court can approve the proposed modification if the court is satisfied that:
(1) If all of the qualified beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) The interests of a qualified beneficiary who does not consent will be adequately protected.
In addition, the Kansas Uniform Trust Code provides that an irrevocable trust can also be modified by court order in Kansas if there are unanticipated circumstances or the inability to administer a trust effectively, particularly if not changing the trust would result in administration that would be impracticable or wasteful. Contact our Wichita office for assistance.
(See K.S.A 58a-410, 411 and 412)