A trust is meant to protect assets, carry out the wishes of the person who created it, and provide for beneficiaries. But life doesn’t always follow the original plan. Whether due to changes in family structure, finances, or health, there may come a time when a trust no longer fits the situation. Fortunately, California law provides several legal pathways to modify or reform a trust.
At OC Trial Group, APC, we help individuals and families in Orange County and across California take the right steps to update their trusts. Here’s an overview of how the process works—and when you may need to get the court involved.
Start With a Careful Review
The first step in any modification is reviewing the trust itself. Key questions include:
- Is the trust revocable or irrevocable?
- Does the trust contain provisions allowing changes?
- What has changed since the trust was created?
People typically seek modifications when there are outdated terms, new financial priorities, or changes in family relationships, such as divorce, remarriage, or the addition of children or grandchildren.
Modifying a Trust With Beneficiaries’ Agreement
If all of the trust’s beneficiaries agree that a change is needed, they may be able to request a modification or even termination of the trust. This usually involves a court petition, and the court must determine that the change won’t interfere with the core purpose of the trust.
This option is common when the trust’s terms no longer make sense—such as outdated investment rules or distribution schedules that no longer fit the beneficiaries’ needs. However, even if everyone agrees, it’s important to approach this carefully, especially when tax consequences could arise.
Modifying a Trust With the Settlor’s Consent
If the person who created the trust (called the settlor) is still living, and all beneficiaries are in agreement, the trust can often be modified without court involvement. This method is typically faster and more cost-effective, especially when the changes are straightforward.
Things get more complicated if:
- A settlor has passed away
- A beneficiary is a minor or legally incapacitated
- The proposed changes go against the original intent of the trust
In these cases, you may still need to seek court approval or involve a legal representative for certain beneficiaries if they are under a legal disability, like a minor.
Modifying a Trust Due to Changed Circumstances
There are also situations where a trust can be modified even without unanimous agreement or the settlor’s involvement. If circumstances have changed significantly since the trust was created—and those changes were not anticipated—then a court may allow modification or termination.
For example:
- A beneficiary’s health has declined, and the trust doesn’t allow enough flexibility to meet their needs
- A significant change in financial markets has rendered the trust’s terms impractical or burdensome
Even if the trust includes provisions like a spendthrift clause to protect assets, a court can step in to make adjustments when necessary to carry out the purpose of the trust.
Divorce and Marital Agreements
Some trusts are tied to marriage or divorce. In cases where a trust is part of a divorce or marital settlement agreement, changes may be required to divide property or update beneficiary designations. These types of modifications must be handled carefully to comply with both trust law and tax regulations.
Decanting: Updating a Trust Without Court or Beneficiary Approval
One option available to trustees in California is called decanting. This allows a trustee to move assets from an old trust into a new one with updated terms, without going to court or getting beneficiary approval, as long as the settlor’s intent is preserved, the trustee has discretion under the original trust, and no beneficiary objects.
Decanting can be especially useful for modernizing trust terms, adjusting distribution rules, or removing outdated administrative provisions.
Let OC Trial Group Help You Modify or Reform a Trust
Modifying a trust is not a one-size-fits-all process. Whether you’re a trustee trying to fulfill your duties or a beneficiary concerned about your rights, it’s important to work with a firm that understands California trust law from both the estate planning and litigation sides.
At OC Trial Group, APC, we help trustees, beneficiaries, and families find practical, effective solutions—whether through mutual consent, court approval, or decanting. We’re here to protect your interests and ensure the trust continues to serve its purpose. Contact us today to discuss your trust modification options and take the next step toward resolving your trust concerns with confidence.