Parental Consent: Advocating for the Allowance of “Obviously Beneficial” Trust Amendments on Behalf of Minor Child Contingent Beneficiaries

Unlike their revocable counterparts, the main purpose for executing an irrevocable trust is typically to accomplish a broader goal than the simple avoidance of the probate process. Although assets funding an irrevocable trust will certainly avoid probate, some of the more common reasons for executing an irrevocable trust include removing valuable assets out of one’s name to qualify for Medicaid should the need arise for long-term care, setting money aside for the care of a loved one with a disability while maintaining the loved one’s eligibility for government benefits, and reducing the size of one’s taxable estate to avoid the payment of state and/or federal estate taxes. Although accomplishing these more complex objectives typically requires an irrevocable trust to remain in place and the assets within to be free from direct control of the grantor, there are ways for the grantor to revoke or amend an irrevocable trust if so desired. 

One of the permissible methods for revoking or amending an irrevocable trust in New York State can be found in § 7-1.9 of the Estates, Powers and Trusts Law. According to this statute, a grantor seeking to revoke or amend an irrevocable trust may do so “[u]pon the written consent, acknowledged or proved in the manner required by the laws of this state for the recording of a conveyance of real property, of all the persons beneficially interested in a trust of property.”1 

In addition to the primary beneficiaries of a trust, it is well-settled that contingent beneficiaries of a trust are “persons beneficially interested” whose “acknowledged written consent to any revocation or alteration by the creator must be secured.”2 In many instances, a contingent beneficiary of an irrevocable trust is a minor child who will only receive trust property if his or her parent predeceases the minor child. Complicating a grantor’s desire to effectuate revocation or amendment of an irrevocable trust is the fact that “[p]ersons under a disability, such as minors, who are beneficially interested in the trust cannot themselves consent.”3 Furthermore, New York law is clear that if the interests of a minor “may be impaired by the proposed alteration or amendment, then neither a guardian of the property nor a guardian ad litem is empowered to consent on the [minor]’s behalf.”4

Conversely, the law in New York State is currently unsettled as to whether a guardian of an infant’s property (including a natural parent) or a guardian ad litem can consent on behalf of an infant beneficiary when the proposed alteration or amendment is “obviously beneficial to the minor.”5 One line of cases has held that a guardian of an infant’s property may never consent “to a revocation or alteration of a trust” on the infant’s behalf.6 However, another line of cases—many of which are recent—has held that “the infant’s guardian . . . may consent on behalf of his or her ward where the infant will be benefited by the alteration or revocation.”7 If the issue of whether a guardian of an infant’s property could consent on behalf of an infant beneficiary to achieve revocation or amendment of a trust comes before the New York Court of Appeals, the Court should align its jurisprudence in accordance with this second line of cases, especially considering that the Court may have already ruled decisively on this issue over forty years ago.

In 1983, the New York Court of Appeals held in the case In re Estate of Cord8 that an amendment of a trust was not invalid “for noncompliance with the requirement for written consent of those beneficially interested.”9 The Court held that “[t]he history behind EPTL 7-1.9 . . . informs us that the design was to protect trust beneficiaries against unauthorized or unwarranted invasion.”10 Although “an irrevocable trust ordinarily cannot be modified except by consent of all those who may be adversely affected thereby,” the Court reasoned that it was “unreasonable to say that consent was required” when an “action could only have added to and not cut down on the benefits available to the beneficiaries.”11 Unfortunately for proponents of this view, commentators have cautioned that this case’s expansive rejection of EPTL § 7-1.9 in relation to beneficial amendments “may have been restricted to the tax apportionment issue at hand,”12 casting doubt on the current state of the law. 

Previous decisions from the New York Court of Appeals and other lower courts have taken a firm stance that the guardian of a minor beneficiary may never consent on behalf of a minor beneficiary to accomplish revocation or amendment of a trust. In the 1929 Court of Appeals case Whittemore v. Equitable Trust Co.,13 the court stated that “[a]ll the adult parties to the deed of trust have consented to the revocation; the children of the settlors, however, being minors, have not and could not consent.14 Forty years later, the 1969 Court of Appeals case In re Dodge’s Trust15 affirmed that “revocation could not be accomplished under the provisions of EPTL 7-1.9 because the settlor’s infant children and infant niece and nephew are beneficially interested in the trust and because of their infancy are legally incapacitated to consent to a revocation.”16

The 1971 Supreme Court of New York, Special Term, New York County case Application of Michael17 drew upon the historical practice of forbidding infant consent to conclude that the then-new codification of the estates laws still required “[t]he unanimous consent of all beneficiaries . . . . Infants could not consent then, and they cannot consent now.”18 Much more recently, in the 2008 Kings County Surrogate’s Court case Matter of Mergenhagen,19 the court held that, since “the grandchildren of the grantors, who have a contingent remainder interest in [a] 1991 trust, are persons beneficially interested in the trust and they did not execute a written consent to its revocation . . . because the grandchildren were minors at the time of the purported revocation, they could not have consented to it.”20 Additionally, the court found the seemingly broad holding from In re Estate of Cord to be a “narrow exception to the requirement of consent from all beneficially interested persons.”21 

Other, more recent cases have deemed acceptable those amendments and revocations by guardians on behalf of minor beneficiaries that are plainly beneficial to the minors at hand. In the 1991 New York County Surrogate’s Court case In re Trust, 22 a proposed amendment to a trust was considered likely to “substantially impair the interests of the infant grandchildren.”23

However, a guardian ad litem suggested a different course of action that was deemed to “not affect adversely any interest of the contingent minor remaindermen.”24 The court upheld the adult beneficiaries’ consent on behalf of the minor remaindermen. In 1995, the New York County Surrogate’s Court stated in In re Hausman25 that “it may permit amendment or revocation of the trust agreement without the consent of infants or other beneficiaries unable to give their consent, where the change is beneficial to their interest.”26 The court granted an application based on a guardian ad litem’s report that “petitioner’s proposed amendments . . . are favorable to the interests of his wards. The proposed changes not only increase the financial interests of his wards, but they also integrate and clarify the trust agreement, eliminating ambiguities and inconsistencies that could lead to confusion or future litigation.”27 In the 2009 case Petition to Terminate the Silverstein Mass. Qualified Pers. Residence Trust Barbara Silverstein, 28 the court stated that “[t]he court may permit the revocation of the trust agreement without the consent of infants or other beneficiaries who are unable to give their consent, as long as the proposed revocation is beneficial to the interest of those particular parties.”29 “Since the proposed changes d[id] not adversely affect the infant’s interest[,] the court dispense[d] with the consent of the infant contingent remainder person.”30 In the 2018 New York County Surrogate’s Court case In re Bowman, 31 there was a “proceeding to amend an irrevocable lifetime trust … with the consent of all of the adult beneficiaries.”32 A guardian ad litem appointed by the court “reported that the proposed amendment would provide additional flexibility in the administration of the trust and would be advantageous to the wards.”33 The court permitted the adults’ consent on behalf of the minor beneficiaries.34 

With an aging population and federal estate tax laws due to sunset without further action from Congress, there exists the potential for a large increase in the execution of irrevocable trusts to accomplish such goals as qualifying for Medicaid to finance long-term care and reducing one’s taxable estate to lessen the impact of lower estate tax exemptions. Given this possible upswell in irrevocable trusts, if the issue of whether a guardian can consent on behalf of a minor beneficiary to achieve revocation or amendment of an irrevocable trust comes before the New York Court of Appeals, the Court should strongly consider permitting parental revocation or amendment when the revocation or amendment would be plainly beneficial to the minor beneficiaries. Even though there are other ways to revoke or amend irrevocable trusts, such as through court orders or the exercising of powers of appointment, having the option of parental consent would help ease the concerns of grantors who are worried that they may be locking themselves into a legal arrangement that is difficult to unravel. To rule contrarily would place a chilling effect on irrevocable trusts just as they are about to heat up.

This article was originally posted in the Suffolk Lawyer.

1 N.Y. EST. POWERS & TRUSTS LAW § 7-1.9.

2 4 New York Civil Practice: EPTL P 7-1.9[4][a] (2023).

3 4 New York Civil Practice: EPTL P 7-1.9[4][b] (2023).

4 Id.

5 Id.

6 Id.

7 Id.

8 449 N.E.2d 402 (N.Y. 1983).

9 Cord, 449 N.E.2d at 405.

10 Id.

11 Id.

12 4 New York Civil Practice: EPTL P 7-1.9[4][b] (2023).

13 250 N.Y. 298 (N.Y. 1929).

14 Id. at 300.

15 25 N.Y.2d 273 (N.Y. 1969).

16 Id. at 278-79.

17 333 N.Y.S.2d 301 (New York County, Sup. Ct. Special Term 1971).

18 Id. at 302.

19 856 N.Y.S.2d 389 (Sur. Ct. Kings County 2008).

20 Mergenhagen, 856 N.Y.S.2d at 391.

21 Id.

22 573 N.Y.S.2d 129 (Sur. Ct. New York County 1991).

23 Trust, 573 N.Y.S.2d at 131.

24 Id.

25 1995 NYLJ LEXIS 4004.

26 Id. at *2.

27 Id.

28 2009 NYLJ LEXIS 1003.

29 Id. at *3-*4.

30 Id. at *4.

31 N.Y.L.J., April 10, 2018, at 22, col. 3 (Sur. Ct. New York County).

32 4 New York Civil Practice: EPTL P 7-1.9[4][b] (2023).

33 Id.

34 Id.