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Modifying an estate plan in Pennsylvania

On Behalf of | Jan 24, 2020 | Estate Planning

Pennsylvania residents often revise their estate plans due to changing family situations or when changes are made to tax laws. Individuals sometimes pass away before they make important changes, but it may still be possible to revise estate plans that no longer serve their intended purpose. Trust documents can include provisions that allow changes to be made in specific circumstances such as new tax rules, but signatures from all of the trustees and beneficiaries are normally required to make the revisions.

When trusts no longer serve a valid purpose or their administration has become overly expensive, judges may be petitioned to order a modification. Another option is to allow a trust protector to determine whether or not a change is warranted. Trust protectors are third parties that may be appointed by the trust’s beneficiaries or trustees or named by a court. However, the original trust documents must specify that a trust protector can make these decisions.

When modifying an existing trust is not an option, it may be possible to decant the assets it contains into a new trust with more appropriate provisions. Lawmakers in Pennsylvania have not yet passed legislation to allow decanting, but the state’s Uniform Trust Act includes certain provisions that allow existing trusts to be modified. When a modification is not possible or administering the trust no longer makes financial sense, the best course of action may be to end the trust. A trust can be wound up if the trustees and beneficiaries agree or a judge issues an order.

Experienced Pittsburg, Pennsylvania, estate planning attorneys may seek to make modifications easier by drafting documents that include provisions such as a trust protector clause. Attorneys might also advise their clients to revisit their estate plans on a regular basis so that needed changes can be made proactively.

Source: The Pennsylvania Legislature, Title 20, Chapter 77, Trusts