Modifying Irrevocable Trusts Without Going to Court
Until 2004, it was very difficult to modify an irrevocable trust without going to court. That year, Tennessee adopted the Tennessee Uniform Trust Code which allows various changes to be made to irrevocable trusts without going to court.
Earlier this month, Christy Reid, from Charlotte, North Carolina, and I presented a paper on this topic. We discussed four tools for modifying trusts: non-judicial settlement agreements, non-judicial consent modifications, decanting, and trust divisions. This is not the exclusive list of tools for making modifications. These are the tools that we use most often to help our clients improve the operation of their trusts.
While preparing for the presentation, I reviewed the laws of other states and concluded that Tennessee has the most flexible laws. I found a couple of places where our laws could be improved, and I will attempt to have these changes made.
It is also possible for judges to modify trusts. Sometimes, going to court is the only viable solution. We prefer to use a non-judicial method when available because it is less expensive for our clients and takes less time.