Trusts can help your family avoid Colorado probate court after you pass away or become incapacitated. With a revocable living trust, you can designate which assets to pass along to specific beneficiaries.
If you did not establish a trust, then Colorado probate court may determine how your descendants receive assets from your estate. While trusts are useful for families, there are also cases where it is necessary to terminate or alter a trust. Depending on the situation, Colorado trust law may allow you to challenge a trust.
When Can I Terminate or Challenge a Trust in Colorado?
You may be able to terminate or contest a trust under the following circumstances:
- The trust is illegal. Trusts must abide by Colorado state law. If a trust is illegal under state law, the court may intervene and terminate the trust.
- Breach of fiduciary duties. Trustees have a legal obligation to manage the execution of a trust without allowing personal motives to interfere. If a trustee combined his or her assets with the assets of a trust, then you may have grounds to terminate the trust.
- Undue influence. If the grantor created and signed a trust under the illegal influence of another party, then you may be able to terminate a trust. An example of undue influence may be a relative who uses intimidation to coerce a grantor into influencing the trust for personal benefits.
- The grantor was not of sound mind. A grantor must be of sound mind while signing a trust. If the grantor created and signed a trust while suffering from a diagnosable health condition that affected his or her judgment, then it may be possible to terminate the trust.
Many trusts terminate after carrying out the terms of the trust or after the trust served its purpose. For example, the trustee may have the authority to terminate a trust after carrying out its terms, such as distributing assets to beneficiaries under the terms of the trust.
Can I Modify an Irrevocable Trust?
It is generally much easier to modify a revocable trust as opposed to an irrevocable trust. You may be able to modify an irrevocable trust under the right circumstances.
Depending on the changes to a trust, it may be easier to terminate the existing trust and create a new one. Our estate planning lawyer in Colorado can help you explore this potential option further.
What Is the Process for Terminating a Trust in Colorado?
You must follow certain procedural steps to terminate a revocable trust in Colorado. First, you must send the beneficiaries notice. There are additional steps that you must take to terminate a trust. The requirements are different for trustees.
Changing or terminating an irrevocable trust in Colorado is difficult. You would need the approval of the trust’s beneficiaries as well as judicial approval. If you want to modify an irrevocable trust, then our estate attorney can discuss your situation in more detail during a consultation.
Contact Our Estate Planning Attorney in Colorado for More Information
Do you have questions about changing a revocable or irrevocable trust? Contact our estate planning attorneys for more information. You can schedule a consultation with us by dialing (720) 770-3880 or by using the contact form on our site.