Trusts come in all varieties and are used for all imaginable purposes with one of the common aspects between any type of trust being that there are terms that are set to direct and restrict the actions of the trustee and sometimes beneficiary. However, over time, these terms may become outdated for reasons ranging from the imposition of certain investment methods that are now obsolete to restrictions on beneficiaries that are now against public policy. Whatever the change that is needed, many states have been active in creating new laws which allow for irrevocable trusts to be altered often with the consent of the beneficiaries and trustee. As a result, it is now recommended that the terms of a trust are periodically reviewed to make sure that they still make sense under the circumstances. An excellent example of this situation is the once common requirement that trusts invest in railroad stocks as they were once considered safe investments with reasonable growth potential before the age of the plane and automobile. When faced with a situation where a trust needs reformation, the first step should always to check what alterations are allowed by the trust instrument itself. If the trust cannot be altered, then look to the law of the situs of the trust to see if reformation is allowed and what steps should be taken. While reformation can be tough, it is still a better option than to allow the trust to suffer because the settlor was unable to predict the future.
See Steve Parrish, Trust Me, You Should Review Your Trusts, Forbes, December 14, 2015
