- Modifying or Revoking an Irrevocable Trust Under EPTL 7-1.9
- The Statute
- Legislative History
- Applying EPTL 7-1.9
- Step 1: If Creator Is Deceased, STOP! Cannot Apply EPTL 7-1.9
- Step 2: If Trust Has Explicit Revocation Rule, STOP! Apply It Before EPTL 7-1.9
- Step 3: Determine Beneficiaries
- Step 4: Determine Contingent Beneficiaries
- Step 5: If Beneficiary or Contingent Beneficiary Is Infant, STOP! Cannot Revoke Under EPTL 7-1.9
Trusts in NY Are Irrevocable by Default
EPTL 7-1.16 provides that a trust is deemed irrevocable unless the trust instrument expressly provides that it is revocable. Nevertheless, it is prudent to expressly state that the trust is irrevocable by including language such as the following: “This trust shall be irrevocable and shall not be subject to any alteration or amendment.”
Creator Can Unilaterally Amend or Revoke a Revocable Trust
Creator Cannot Unilaterally Amend or Revoke an Irrevocable Trust
People usually think that “irrevocable” means the trust creator cannot revoke or amend the trust. But this definition is incomplete.3 A trust is “irrevocable” because the trust creator cannot unilaterally amend or modify the trust. There are judicial and non-judicial ways to amend or revoke an irrevocable trust.
Modifying or Revoking an Irrevocable Trust Under EPTL 7-1.9
EPTL 7-1.9 provides that the creator of a trust may revoke it if the creator obtains the written, notarized consent of the trust’s beneficiaries.
Applying EPTL 7-1.9
Step 1: If Creator Is Deceased, STOP! Cannot Apply EPTL 7-1.9
You cannot use EPTL 7-1.9 if the creator is dead.
Step 2: If Trust Has Explicit Revocation Rule, STOP! Apply It Before EPTL 7-1.9
Typical trusts are either revocable or irrevocable, but something in between is possible.
- If the trust is revocable (and does not specify a revocation procedure), then the creator can revoke the trust outright without having to obtain the consent of the beneficiaries.
- If the trust is irrevocable (and does not specify a revocation procedure), then the creator might be able to revoke it under EPTL 7-1.9. In this case, proceed to Step 3 (below).
- A more difficult scenario is a trust that specifies a revocation procedure. If the trust has an explicit rule for revocation, then the creator must meet the conditions of that rule before applying EPTL 7-1.9.4
Step 3: Determine Beneficiaries
Step 4: Determine Contingent Beneficiaries
When applying EPTL 7-1.9, you must determine who the contingent beneficiaries are.
- Contingent beneficiaries are those who are named to take alternate dispositions.
- Contingent beneficiaries are typically a class.
- ==Do we look at alternate beneficiaries of the income, principal, or both???==
Step 5: If Beneficiary or Contingent Beneficiary Is Infant, STOP! Cannot Revoke Under EPTL 7-1.9
If infants are beneficially interested in the trust, then revocation cannot be accomplished under the provisions of EPTL 7-1.9 because infants are legally incapacitated to consent to a revocation.5
“While conventional wisdom implies that an irrevocable trust is irrevocable, a New York trust is not irrevocable in the purist definition of the term,” writes Michael J. Amoruso in Using EPTL § 7-1.9 to Revoke an Irrevocable Trust - Tax and Medicaid Considerations, April 11, 2005. ↩
See In re Dodge’s Trust, 25 N.Y.2d 273 (1969); Matter of Perosi v. LiGreci, 98 A.D.3d 230, 948 N.Y.S.2d 629 (App. Div. 2nd 2012). ↩
See In re Dodge’s Trust, 25 N.Y.2d 273 (1969). ↩