For a variety of reasons, many people choose to place their assets in revocable trusts. Those trusts will generally contain terms that govern the administration and distribution of the assets, such as providing for the distribution of assets or funds at a certain time, or placing certain restrictions on how assets can be used. But what if, after executing the trust, your circumstances or your wishes change and you want to change those terms?
The New Hampshire Trust Code, RSA chapter 564-B, provides for two methods of amendment: either substantial compliance with a method provided in the terms of the trust, or any other method manifesting clear and convincing evidence of the trust creator’s (also called the settlor) intent. The latter of the two options is only available if the terms of the trust do not specify that the method in the trust is the exclusive method of amendment.
Most trusts contain terms about how to effect an amendment to the trust. Under the first method listed in the statute, as long as the settlor complies or substantially complies with the amendment method called for by the trust’s terms, the amendment will generally be found effective.
Trust terms governing amendments, however, sometimes don’t specify that the methods in those terms are exclusive. If that’s the case, then the settlor can alternatively amend the trust via any method that shows his or her intent to do so by clear and convincing evidence. Clear and convincing evidence is a high bar to meet. It falls somewhere between the ‘more likely than not’ standard applicable in most civil cases and the ‘beyond a reasonable doubt’ standard applicable in criminal cases. So, if an action the settlor takes displays clear and convincing evidence of his or her intent to amend the subject trust, and the trust itself doesn’t contain any terms making the trust’s method of amendment exclusive, the settlor can effect an amendment to their trust that way.
Settlors seeking to amend their trusts should review their trust’s terms with an experienced attorney, and discuss with them how to amend those terms if they desire. Settlors should also be aware of how their actions might be viewed as evidencing an intent to amend their trust, and discuss with their attorneys how to avoid bringing about unwanted amendments.
Know the Law is a bi-weekly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to firstname.lastname@example.org. Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.