Can a Judge Approve an Amendment on a Trust that I a Beneficiary, Refused to Sign Off On?

Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.

“I am 49 years old. My mother passed away 4 years ago, leaving an Irrevocable Trust with 4 beneficiaries and my step-father as Trustee. As there were 2 children from each marriage, the Trust was then split into A and B. Any amendments to the Trust required the signatures of all 4 beneficiaries. Keeping the interest of myself and my family first, I refused to sign one such the amendment only to find out that the Judge went ahead a approved it anyway. Now that my step-father has passed away, this has resulted in severe financial hardship for my family as we made plans based on this amendment not being binding. I was never notified of the decree or I would have argued the decision while my step-father was alive. Is the judges order binding? What happened to my rights as a beneficiary?”

As a practical matter, you’re probably going to have to determine how much you have lost due to the change and compare that to the cost of fighting the change.

Different states have significantly different rules regarding whether and to what extent a court can make changes to an irrevocable trust. Therefore, the exact procedures that should have been followed, and the extent of the court’s power to make changes, will depend on the particular rules of your state. The best way to find out about how your state’s rules apply to your particular situation would be to consult with a local attorney, but there is a good chance that your local judge was probably acting within his or her authority under the law.

However, it is generally the case that interested parties are supposed to be notified of court proceedings, for the specific reason that it gives them the opportunity to object. The fact that you did not get notice would be the most likely grounds for you to challenge this change. Keep in mind, however, that if the trust assets have been distributed, you may have a practical difficulty in getting them back in order to rectify the change, even if you win.

One other thing to keep in mind: some states still allow “no contest” clauses. If your state does, and if the trust has such a term, you will also need to consider the risk that if you do challenge the change and lose, that might mean you won’t inherit anything at all. That’s not to say that you shouldn’t challenge it, but you should consider all the possible risks before you do.