At Blackstone Solicitors, we often encounter questions from clients about whether they can modify a trust once it has been created in their will. Trusts are a powerful tool for estate planning, allowing you to protect and control the distribution of your assets after your death. However, life is unpredictable, and circumstances often change—whether that’s a new addition to the family, a change in financial circumstances, or evolving legal and tax considerations.
This article explores whether and how you can modify trusts in wills after they have been created. We’ll guide you through the key considerations, the processes involved, and the importance of seeking professional advice to ensure your wishes are accurately reflected and legally sound.
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For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of Trusts in Wills and once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing from the start and also avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
Understanding Trusts in Wills
A trust in a will, often referred to as a “will trust,” is a legal arrangement created upon your death. It enables certain assets to be managed by trustees for the benefit of named beneficiaries. Popular types of will trusts include:
- Discretionary trusts: Offering flexibility to trustees in how they distribute income or capital to beneficiaries.
- Life interest trusts: Granting a beneficiary the right to use or receive income from an asset during their lifetime, with the capital passing to others upon their death.
- Bare trusts: Providing direct ownership of assets to beneficiaries once they reach a specified age.
Trusts are an excellent way to manage inheritance, but they also involve specific legal provisions that can be challenging to alter once the trust has been created.
Modifying a Trust in a Will Before Death
If the trust is part of your will and you are still alive, it can generally be modified. Wills, including their trust provisions, can be altered or revoked at any time during your lifetime, provided you have mental capacity.
- Amending the Will
- Minor changes to your will, such as updating the terms of a trust, can often be made by adding a codicil. This is a supplementary document that alters specific provisions of your will without requiring an entirely new one.
- If more substantial changes are required, such as introducing a new trust or removing an existing one, it is advisable to draft a new will. This ensures clarity and avoids potential disputes.
- Professional Advice
- Modifying a will that includes trusts can have significant legal and tax implications. Consulting a solicitor ensures that your revised intentions are clearly expressed and remain legally valid.
- Costs
- Making changes to a will typically costs between £100 and £500, depending on the complexity of the amendments. Drafting a new will, including trust provisions, may range from £500 to £2,000 but may be more depending upon circumstances.
Can a Trust Be Modified After Death?
Once a will trust is activated upon death, altering it becomes more complex. However, under certain circumstances, modifications may still be possible.
- By Agreement of Beneficiaries (Deed of Variation)
A deed of variation allows beneficiaries to modify the terms of a trust, but this requires agreement from all affected parties. For example, beneficiaries might agree to redirect assets to a different individual or adjust the terms of distribution to reflect new circumstances.
- Requirements:
—All beneficiaries must be over 18 and have mental capacity to agree.
—The variation must occur within two years of the testator’s death to avoid adverse tax consequences.
- Common Uses:
—Addressing unforeseen financial needs of a beneficiary.
—Optimising inheritance tax (IHT) planning.
- Costs:
—Solicitor fees for drafting a deed of variation usually range from £750 to £2,000, depending on the complexity.
- Powers of the Trustees
In some cases, trustees may have the authority to make changes to the trust. This depends on the wording of the trust document, which may grant discretionary powers. Common powers include:
- Adjusting how income or capital is distributed among beneficiaries.
- Changing investments held by the trust.
- Adding or removing beneficiaries (in discretionary trusts).
However, trustees must act in the best interests of all beneficiaries and within the limits of their legal powers.
- Court Intervention
If beneficiaries cannot agree or the trust does not provide sufficient flexibility, modifications may require court approval. This typically involves:
- Applications under the Variation of Trusts Act 1958:
Courts can approve changes to a trust if they are in the best interests of certain beneficiaries, such as minors or unborn individuals.
—Example: Extending the duration of a trust to better protect vulnerable beneficiaries.
- Rectification of Errors:
If a trust contains mistakes or fails to reflect the testator’s true intentions, courts may rectify the document. This requires strong evidence of the error.
Court processes can be time-consuming and expensive, with costs often exceeding £5,000.
When Should You Consider Modifying a Trust?
Life events and changes in legislation can make it necessary to revisit your estate planning decisions. Situations that may warrant a review include:
- Changes in family dynamics: A divorce, remarriage, or the birth of a new child or grandchild may require adjustments to reflect new priorities.
- Financial changes: A beneficiary’s financial circumstances may improve or deteriorate, necessitating a change in the trust’s terms.
- Tax law changes: Updates to IHT or capital gains tax regulations may affect the efficiency of your trust structure.
- Health and care considerations: If a beneficiary develops care needs or vulnerabilities, modifying the trust may provide better protection.
Regular reviews of your will and trust provisions—ideally every five years or following major life events—help ensure they remain fit for purpose.
Challenges of Modifying Trusts
While modifications can often be made, there are some challenges and limitations to bear in mind:
- Beneficiary Agreement: Gaining unanimous consent from all beneficiaries can be difficult, especially if their interests conflict.
- Legal and Tax Implications: Changes to trusts can trigger unexpected tax liabilities, particularly IHT and capital gains tax.
- Complexity: Trust modifications often require expert legal, financial, and tax advice to navigate the complexities.
How Blackstone Solicitors Can Help
At Blackstone Solicitors, we specialise in wills, trusts, and estate planning across England and Wales. Our experienced solicitors can help you:
- Draft or amend your will to reflect your changing circumstances.
- Assess the feasibility of modifying existing trusts.
- Navigate the legal and tax implications of changes.
- Facilitate deeds of variation or applications to court, where necessary.
We understand that every client’s situation is unique, and we provide tailored advice to meet your needs.
Final Thoughts
While trusts in wills are designed to provide long-term solutions for managing your estate, they are not always set in stone. Whether you wish to modify a trust before or after your death, options exist to adapt to changing circumstances. However, the process can be legally and financially complex, making professional advice essential.
At Blackstone Solicitors, we are here to guide you through every step of the process, ensuring your estate planning goals are achieved with clarity and confidence. Contact us to discuss your needs and explore how we can help you secure the future for yourself and your loved ones.
We have a proven track-record of advising upon all aspects of private client work. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.to incorporate, what kind of ownership
How to Contact Our Private Client Solicitors
It is important for you to be well informed about the issues and possible implications of setting up a Trust. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Trust solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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