A living trust in Pennsylvania can be revised at any time while the person who created the trust is still alive. Once a testator passes away, however, the living trust then becomes irrevocable. Changes can then be made only if all of the beneficiaries consent to the revisions and submit them for court approval. This process doesn’t always proceed smoothly. In the case of John S. Middleton, co-owner of the Phillies baseball team, a dispute with his two sisters regarding revisions to their family trust required significant time and effort to resolve.
Middleton agreed to pay his sister, Anna Nupson, $22 million to settle a dispute that arose from a 2003 revision made to a trust originally created by their mother in 2001. In the trust created in 2001, the litigants’ mother left all of her 258,029 shares of the family’s cigar company to her son. John Middleton faced criticism from the judge when his attorneys concealed from the court the fact that there were two versions of Mrs. Middleton’s trust documents.
Prior to the settlement, the judge also stated that there might be tax issues involved. Transferring assets between a trust’s beneficiaries once that trust has become irrevocable due to the testator’s death may trigger a gift tax levy. To avoid or minimize these types of problems, it’s important to have a qualified estate planner explain the potential options and consequences. Otherwise, disputes and legal challenges between heirs could interfere with the carrying out of your long-term wishes.
Feldstein Grinberg Lang & McKee, P.C. are experienced attorneys who have helped Pennsylvania families work out the many complex details and conditions required to successfully change irrevocable trusts. To find out if your family’s irrevocable trust can be revised effectively and to learn what needs to be done, call 412-301-7395 or contact us online to schedule a personal and confidential consultation.