You signed a living trust years ago, and since then you have remarried, a child has grown up, or you have sold the house the plan was built around. Whether you can change that trust in Texas depends mainly on whether it is revocable. A Texas trust is revocable unless its terms expressly make it irrevocable, and the person who created a revocable trust can generally amend or revoke it in writing. An irrevocable trust is harder to change, but a court or, in some cases, a trustee may still be able to modify it depending on the surrounding circumstances.
At The Law Office of Whitney L. Thompson, we help individuals and families in Houston and the surrounding area create trusts and review existing ones when circumstances change. Before signing an amendment or asking a trustee or court to act, reviewing the trust document itself is the most reliable way to see which kind of change is available to you.
Changing a Revocable Trust During Your Lifetime
If you created a revocable trust, you generally keep the power to change it. Under the Texas Trust Code's revocation and amendment rules, a settlor may revoke a trust unless it is expressly irrevocable and may modify or amend a revocable trust. If the trust was created by a written instrument, the revocation or amendment must also be in writing.
Your trust document may also set its own procedure for amendments, such as signing requirements or notice to a co-settlor. Following those terms helps avoid later disputes over whether a change took effect. If you have made several amendments over time, a restatement may make the trust easier to follow by replacing its existing terms in one updated document rather than adding another amendment.
Changing the trust's terms does not by itself transfer property into the trust. Assets that were never titled in the trust's name may still need to be transferred separately.
An agent acting under a durable power of attorney does not automatically have the same authority to change your trust. Texas law generally allows an agent to create, amend, revoke, or terminate an inter-vivos trust only if the power of attorney expressly grants that authority and another agreement or instrument governing the property does not prohibit it.
When a Revocable Trust Becomes Irrevocable
A revocable trust generally becomes irrevocable as to a settlor's interests when that settlor dies, subject to the trust's terms. The trustee must then generally follow those terms rather than make changes the settlor could make during life. If spouses create a trust together, its terms determine what the surviving spouse may still change.
Divorce is a turning point that Texas law addresses directly. When a marriage ends, provisions in a revocable trust that benefit the former spouse, give the former spouse a power of appointment, or name the former spouse as trustee are generally revoked automatically. Relatives of the former spouse who are not also your relatives are treated the same way. A court order, the trust's own terms, or a property agreement between the spouses can override that result.
Automatic revocation is a safety net, not a plan. The revoked gift generally passes as if the former spouse had disclaimed it, which may not send it where you would choose, so reviewing and amending the trust after a divorce still matters.
How a Texas Court Can Modify an Irrevocable Trust
A trustee or beneficiary can ask a court to modify or terminate an irrevocable trust when the request meets one of the grounds in Section 112.054 of the Texas Property Code. Those grounds include when:
The trust's purposes have been fulfilled or have become illegal or impossible
Unanticipated circumstances make a change helpful to the trust's purposes
Administrative terms need to change to prevent waste or problems with administration
A change is needed to meet the settlor's tax objectives or qualify a beneficiary for government benefits without contradicting the settlor's intentions
Continuing the trust is unnecessary to achieve a material purpose, or the proposed change is consistent with its material purposes, and all beneficiaries consent
Even when every beneficiary agrees, a change on that basis generally still requires a court order in Texas.
A court can also reform a trust to correct a scrivener's error in the governing document if clear and convincing evidence establishes the settlor's intent. The court must act as closely as possible to the settlor's probable intent. A spendthrift provision is a factor the court considers, but it does not by itself prevent modification, termination, or reformation.
Can a Trustee Change an Irrevocable Trust Without Court Approval?
Sometimes, yes. Texas allows a process often called decanting, in which a trustee with authority to distribute principal moves some or all of the trust principal into a second trust with different terms. The authorized trustee cannot be the settlor, and the trust document cannot expressly prohibit the use of this power. A general statement that the trust is irrevocable, or a spendthrift clause, does not by itself prevent decanting.
How much can change depends partly on the trustee's discretion. A trustee with full discretion over principal has more flexibility. A trustee with limited discretion, such as a standard based on health, education, support, or maintenance, must preserve specified beneficiary and distribution provisions in the second trust. Decanting also cannot reduce or modify a beneficiary's current vested right to certain mandatory distributions.
The trustee generally must give current and presumptive remainder beneficiaries written notice at least 30 days before the proposed distribution and provide copies of the existing and proposed trust agreements. The notice must tell beneficiaries that they can object and may petition a court to approve, modify, or deny the proposed decanting. These rules make decanting a useful tool in trust planning and administration, but whether it fits depends on the trust's language and the change you hope to make.
Get Trusted Legal Guidance From a Seasoned Attorney
If your trust no longer fits your family or finances, our Houston estate planning attorney can review the document, determine whether it is revocable, and help you identify the appropriate way to make a change. For an irrevocable trust, we can help you evaluate whether decanting or a court petition may be available and what the process would require.
We have offices in Houston and Bay City and serve clients in Harris, Fort Bend, Brazoria, Montgomery, Matagorda, Wharton, and Jackson Counties. Contact us at The Law Office of Whitney L. Thompson to learn what your trust allows you to change and the cleanest way to make that change.
