What about Revocable Trusts? Amending Revocable Trust is an extremely simple and straight forward process because the act and process of amending a trust is outlines in the Trust itself. In short, a Revocable Trust is made to be amended, and that kind of flexibility is essential to an estate plan where a Revocable Trust is at the core (this includes nearly all estate plans). For Irrevocable Trusts, the situation is quite a bit different. You see, one of the defining characteristics of an Irrevocable Trust is its lack of flexibility. It is this detachment of power from the creator of the Trust that asset protection, tax, and other benefits enter into the picture. So, for whatever specific purpose the trust was created, the lack of flexibility is essential to its purpose. And although on the face of them, it appears that Irrevocable Trusts would not be amendable, they in fact are. We just need to look to the California Probate Code for direction.
Amending Trusts is addressed in Sections 15400 through Section 15404 in the California Probate Code. As stated above, amending a Revocable Trust relies on Section 15402, which states in part, "...if a Trust is revocable by the Settlor [creator of the Trust], the Settlor may modify the Trust by the procedure for revocation." This essentially means that when one amends their Trust, they simply defer to the process outlined in the trust, which only involves the Creator of the Trust and no other party. However, when all Creators become deceased, this once Revocable Trust become Irrevocable, and now such changes can be made...unless we look to the other Code Sections.
California Probate Code Section 15403 states in part that, "...if all beneficiaries of an Irrevocable Trust consent, they may compel modification or Termination of the Trust upon petition to the Court." So, for an Irrevocable Trust to be amended, all of the beneficiaries of the Trust can do so by acting in collusion by petitioning the Court. Another part of Section 15403 addresses restrictions placed on the Court itself to allow such a modification. Without going into too much detail, these restrictions all focus around not modifying the Trust if such modification would usurp the intent of the Trust Creators. In other words, if one of the purposes of the Trust is to plan for and provide a retirement for the beneficiaries, the Court will unlikely allow a modification resulting in immediate distributions if all of the beneficiaries are in their thirties, even if they are all in agreement with the change. So for a Revocable Trust that is now Irrevocable due to the death of the Creators of the Trust, or any Irrevocable Trust where the Creators have died, all beneficiaries must be in agreement with the desired changes to the Trust, and only after a successful petition to a Court can the Trust be amended.
Now what about an Irrevocable Trust where the Creators are still alive? Well, we have a lot more options. California Probate Code Section 15404 states in part that, "If the Settlor [creator of the Trust], and all beneficiaries of a Trust consent, they may compel the modification or termination of the Trust." What this Section allows is all beneficiaries and the Creators of the Trust to get together and amend the Trust without having to involve the Court. There are additional provisions in the Section that still allow partial modifications if not all beneficiaries are on board. So for an Irrevocable Trust where the Creators are still alive, the Creators and the beneficiaries together can amend an Irrevocable Trust without involving the Court.
This is where that huge caveat comes into play. If the Creators are still alive, they can amend their Irrevocable Trust, but keep in mind all of the beneficiaries need to be on board (Note, that as stated earlier, there are options for partial modifications if not all beneficiaries are in agreement.) So, when desiring to change or amend and Irrevocable Trust, consider how the beneficiaries are going to react to the proposed change. The The most common change desired when one is amending an Irrevocable Trust has to do with changing the Trustee. This typically doesn't present a problem unless the beneficiaries feel very strongly about that particular beneficiary. This change may need to be presented with tact to the beneficiaries. Now, if the desired change has to do with the distribution provisions, consider the fact that it is likely that one or more of the beneficiaries