Probate & Trust Law Section Conference Manual ... - Minnesota CLE

III. MODIFICATION/REFORMATION OF TRUSTS
1. INTRODUCTION
It may be helpful to reform, modify and thus modernize many existing, older irrevocable trusts.
Modification, reformation and decanting of trusts have all gained popularity as a result of modern
trust laws, the Uniform Principal and Income Act, the Uniform Prudent Investor Act, directed
trust laws, changes in family circumstances and/or a desire to change trust administration.
2. MODIFICATION/REFORMATION
The ability to modify/reform the trust can generally be inserted into a trust document at its
creation. Reformations/modifications may also take place without language in the trust document,
if state law permits.
3. SELECTED STATE STATUTES:
Alabama (ALA. CODE § 19-3B-411);
Alaska (ALASKA STAT. § 13.36.360);
Arizona (ARIZ. REV. STAT. § 14-10411);
Arkansas (ARK. CODE ANN. § 28-73-411);
California (CAL. PROB. CODE § 15403-15404);
Delaware (DEL. CODE ANN. tit. 12, § 3313);
District of Columbia (D.C. CODE § 19-1304.11);
Florida (FLA. STAT. § 736.0412(1));
Iowa (IOWA CODE § 633A.2203);
Kansas (KAN. STAT. ANN. § 58a-411);
Maine (ME. REV. STAT. ANN. tit. 18-B, § 411);
Missouri (MO. REV. STAT. § 456.4A-411);
Montana (MONT. CODE ANN. § 72-33-406);
Nebraska (NEB. REV. STAT. ANN. § 30-3837(a));
Nevada (Nev. Rev. Stat. § 163.5553);
New Hampshire (N.H. REV. STAT. ANN. § 564-
B:4-411(a));
New Mexico (N.M. STAT. ANN. § 46A-4-411);
North Carolina (N.C. GEN. STAT. § 36C-4-411);
North Dakota (N.D. CENT. CODE § 59-12-11);
Ohio (OHIO REV. CODE ANN. § 5804.11);
Oregon (OR. REV. STAT. § 130.200(1));
Pennsylvania (20 PA. CONS. STAT. § 7740.1);
South Carolina (S.C. CODE ANN. § 62-7-411);
South Dakota (S.D. CODIFIED LAWS § 55-3-24);
Tennessee (TENN. CODE ANN. § 35-15-411);
Texas (TEX. PROP. CODE ANN. § 112.054);
Utah (UTAH CODE ANN. § 757-411);
Vermont (VT. STAT. ANN. tit. 14A, § 411);
Wyoming (WYO. STAT. ANN. § 4-10-412).
Reformations and modifications are generally easiest when both the grantor and the beneficiaries
are alive and all agree with the reformation/modification. Unborn beneficiaries can be represented
pursuant to a state’s virtual representation statutes. 114
Some states, including South Dakota, permit a trustee or beneficiary to petition the court to
modify or reform the administrative or dispositive terms of the trust. 115 This can be done if
circumstances, which were not anticipated by the grantor, have arisen and if the modification of
the trust would substantially further the trust or the purpose for creating the trust. 116 Additionally,
the reformation can generally be accomplished in order to conform the terms due to a mistake of
fact or law and the grantor’s intent can be established. 117 In order to achieve the grantor’s tax
objectives, the terms of a trust instrument may be construed or modified in a manner which will
not violate the grantor’s probable intention. 118
114 See Virtual Representation, Section V.
115 S.D. CODIFIED LAWS § 55-3-26.
116 S.D. CODIFIED LAWS § 55-3-26.
S.D. CODIFIED LAWS § 55-3-28.
118 S.D. CODIFIED LAWS § 55-3-28.
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