Is there a way to get a house deed out of the trust? Is it possible to revoke an irrevocable trust? Who has to agree to that? Great questions, states Beck & Lenox Estate Planning & Elder Law, LLC.
Nj.com’s recent article entitled “Can I dissolve an irrevocable trust to get my house out?” says that prior to finalizing legal documents, it is important to know the purpose and consequences of the plan.
An experienced estate planning attorney will tell you there are a variety of trust types that are used to achieve different objectives.
There are revocable trusts that can be created to avoid probate, and other trusts placed in a will to provide for minor children or loved ones with special needs.
Irrevocable trusts are often created to shield assets, including the home, in the event long-term nursing care is required.
Conveying assets to an irrevocable trust typically starts the five-year “look back” period for Medicaid purposes, if the trust is restricted from using the assets for, or returning assets to, the individual who created the trust (known as the “grantor”).
When you transfer assets to a trust, control of the assets is given to another person (the ‘trustee”).
This arrangement may protect assets in the event long-term care is required. However it comes with the risk that the trustee may not always act how the grantor intended.
For instance, the grantor can’t independently sell the house owned by the trust or compel the trustee to purchase a replacement residence, which may cause a conflict between the grantor and trustee. Because the trust is irrevocable, it could be difficult and expensive to unwind.
In light of this, it’s important to designate a trustee who will work with and honor the wishes of the grantor.
An experienced estate planning attorney retained for estate and asset planning should provide clear, understandable and thoughtful advice, so the client has the information needed to make an informed decision how to proceed. Is it possible to revoke an irrevocable trust? It is possible, according to Beck & Lenox, if all the beneficiaries agree to that. Our office has helped families amend an irrevocable trust if a change in a trustee is desired, as an example. Completely revoking the trust may have bad consequences if your original intention was to protect assets for Medicaid qualifications down the road.
Reference: nj.com (April 6, 2021) “Can I dissolve an irrevocable trust to get my house out?”