Can an Irrevocable Trust Be Revoked by Heirs?

Comparing heirs and beneficiaries is a little like comparing a family sedan to a sports car. They're both vehicles, but they have some fundamental differences.

Both heirs and beneficiaries can inherit. Beneficiaries are people who are specifically named in a will or trust documents. Heirs are people spouses and other relatives who would have a legal right to inherit if someone were to die without a will or other estate plan. Heirs can be beneficiaries – and they often are – but they might not be if the decedent decides to disinherit them. It's an important distinction when determining whether you, as an heir, have standing to revoke an irrevocable trust.

Challenges by Heirs

Heirs cannot revoke an irrevocable trust if they're not also beneficiaries, but they can challenge or contest it. The procedure is much the same as contesting a will with one major difference. You can file a trust challenge either during the trustmaker's lifetime or after his death, but you can only contest a will after the testator has died. Until this time, he reserves the right to revoke or change his will at any time so it's not a binding document.

The burden of proof when contesting a trust is similar to that of contesting a will. You must typically prove there's an error in the trust's formation documents or that the trust maker was not of sound mind at the time he created it. The threshold for sound mind is a little more stringent for an irrevocable trust than for a revocable trust or a will. As with will contests, a trust contest is typically a full-blown legal proceeding involving a trial. Breaking the trust would ultimately come down to the opinion of a judge.

Revocation by Beneficiaries

Irrevocable trusts are supposed to be forever, but in actuality, they can sometimes be broken. During the trustmaker's lifetime, an irrevocable trust is easier for heirs to revoke – provided they're also beneficiaries. Some states, such as New York and Virginia, allow irrevocable trusts to be broken upon the written, unanimous consent of all beneficiaries. Revocation typically requires the trustmaker's agreement and consent as well.

Post-Death Revocation

Revoking an irrevocable trust after the death of the trustmaker is a similar process, but it can require a court appearance. Some states allow beneficiaries to file a petition with the court requesting termination of the trust. Your odds of success would also depend on the unanimous consent of the beneficiaries and the trustee.

Although the court can overrule the dissent of one or more beneficiaries, it might not do so unless the beneficiaries can demonstrate that the trust no longer serves the purpose for which it was intended. Courts are not inclined to fly in the face of an irrevocable trustmaker's wishes after his death without good cause.

Exceptions to the Usual Rules

When a charity is a trust beneficiary, this can complicate revocation. Because of taxation issues, charitable trusts usually can't be revoked. Even with the charity's consent, the court might not allow such a trust to be broken. Complications can also arise if any of the beneficiaries are minors. States that have adopted the Uniform Trust Code typically allow parents or guardians to speak for minors in such a situation, but other states will not do so. In these jurisdictions, the trust might not be revocable until all beneficiaries are of legal age.

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About the Author

Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.


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