A trust may be modified under Colorado law for a number of reasons. Circumstances may change so that the trust no longer effectively carries out the wishes of the settlor. Terminating a trust early or modifying its terms is not generally a simple process. Modification is controlled by the wording of the trust itself. Any other document, such as a will, is not sufficient.
Aside from the settlor modifying their own trust, the beneficiaries and the court may also modify a trust under certain circumstances. The trustees may modify the trust so long as two conditions are met. First, all beneficiaries must agree to the modification. The law recognizes current and potential beneficiaries. If an unborn child is a potential beneficiary, then it is impossible for the beneficiaries to modify the trust themselves. The modification must also not violate the original intent or purpose of the trust.
If the beneficiaries or settlor are unable to modify a trust themselves, they can petition the court to modify the trust. If a situation arises where a modification is appropriate but is legally barred due to the way the trust was created, the court can override the limitations of the trust and make the modification. Those seeking the modification must prove that what they are seeking is in the best interests of the trustees and follows the original intention of the trust.
Due to the complicated nature of modifying trusts, it is a good idea to consult an attorney when seeking to modify a trust. An estate planning attorney can advise a client on if a trust modification is possible and what the client will need to do in order to modify the trust. If the matter must be taken to court, then an attorney can help a client present their case for modification to the judge.
Source: National Paralegal, ‘Power to revoke, modify or terminate trusts”, accessed on Jan. 13, 2015