How can I amend a revocable trust created by a relative to change who approves my child’s expenses and who serves as trustee? – North Carolina

Short Answer

Under North Carolina law, the power to amend a revocable trust almost always rests with the person who created the trust (the settlor), not with a parent or beneficiary. Changing who approves a child’s expenses or who serves as trustee is usually done either (1) by the settlor signing a written amendment that follows the method in the trust document, or (2) by asking the superior court to modify the trust or change the trustee under the North Carolina Trust Code if certain conditions are met. A parent or beneficiary generally cannot unilaterally rewrite the trust but may have standing to request court relief or a trustee change in some situations.

Understanding the Problem

The core question is whether, under North Carolina estate planning law, a parent can change the terms of a revocable trust that a relative set up for a child, specifically to (a) alter who must approve the child’s expenses paid from the trust and (b) replace or add trustees. The trust is already funded and operating to pay the child’s expenses. The issue is whether the parent, as someone other than the person who created the trust, has any legal power to amend the trust’s terms or must instead work with the settlor, the trustee, or the court to adjust those roles.

Apply the Law

North Carolina has adopted a comprehensive trust code that governs revocable and irrevocable trusts, including who may amend a revocable trust, how trustees may be changed, and when a court may modify a trust’s terms. In general, a revocable trust remains under the control of the settlor while the settlor is living and competent, and beneficiaries and relatives do not gain amendment rights just because the trust benefits a child. However, the statutes also allow court modification of trusts and removal or replacement of trustees in defined circumstances, and they expressly allow actions to reform, terminate, or modify a trust to be brought without a limitation period under N.C. Gen. Stat. § 1-56.1.

Key Requirements

Settlor’s Amendment Power: While the settlor (the relative who created the revocable trust) is alive and competent, that settlor typically holds the exclusive right to amend the trust, following the amendment method described in the trust instrument or, if none, the default method under the trust code.
Trustee Change Standards: The North Carolina Trust Code allows removal and replacement of a trustee by the terms of the trust or by the superior court when statutory conditions are met, such as breach of duty, unfitness, hostility impairing administration, or substantial change in circumstances.
Court Modification of Terms: If the settlor cannot or will not amend, the superior court may modify a trust’s administrative or dispositive terms in certain situations (for example, where the purposes of the trust would be better served, circumstances have changed, or all required parties consent), but the court must stay consistent with the settlor’s probable intent.

What the Statutes Say

N.C. Gen. Stat. § 1-56.1 (No limitation for certain trust actions) – Allows actions to reform, terminate, or modify a trust under the North Carolina Trust Code to be filed at any time, with no statute of limitations for those specific remedies.

Analysis

Apply the Rule to the Facts: Here, a relative, not the parent, created a revocable grantor trust for a child’s expenses in North Carolina. That relative, as settlor, generally retains the power to amend the trust to change who approves expenses or who serves as trustee, as long as the relative is alive and has capacity. The parent, as someone who did not create the trust, ordinarily cannot sign a unilateral amendment. If the settlor is unwilling or unable to amend, and if the trustee relationship or expense-approval structure is harming or no longer serving the child’s best interests, the parent may have standing to petition the superior court to remove or replace a trustee or to modify administrative provisions, asking the court to align any changes with the settlor’s likely intent and the trust’s purposes.

Process & Timing

Who files: Typically the settlor, or if court relief is needed, an interested party such as a beneficiary, a parent acting on behalf of a minor beneficiary, or the trustee. Where: Civil division of the Superior Court in the North Carolina county where the trust is administered or where a trustee resides. What: Either (a) a written trust amendment signed and acknowledged by the settlor following the amendment article in the trust, or (b) a verified petition to modify the trust or remove/replace a trustee under the North Carolina Trust Code. When: Under N.C. Gen. Stat. § 1-56.1, an action to reform, terminate, or modify a trust may be filed at any time, but practical timing matters if the child’s expenses are ongoing.
The court, if petitioned, will require proper service on the trustee and interested parties and may appoint a guardian ad litem for a minor beneficiary. The court will then review evidence about the trust’s terms, the settlor’s likely intent, the trustee’s conduct, and how any proposed change would affect the child and other beneficiaries. This stage can range from an uncontested, document-based proceeding to a more involved hearing if anyone objects.
After considering the evidence, the superior court may enter an order denying relief, approving a trustee removal or appointment, or modifying specific trust terms such as who must approve distributions for the child’s expenses. The final outcome is a signed court order, which the trustee must follow, and, where appropriate, a conforming trust restatement or amendment that reflects the court’s ruling.

Exceptions & Pitfalls

If the settlor has become incapacitated, a guardian or agent under a power of attorney may have limited authority to act regarding the trust, but only to the extent specifically allowed by North Carolina law and the governing documents; broad, assumed power to rewrite the trust is not automatic.
If the trust has become irrevocable (for example, because the settlor has died), the path to change terms is narrower and more dependent on court-approved modification or consent of affected beneficiaries; simple “revocable trust amendment” language no longer applies.
Failing to follow the amendment procedure spelled out in the trust (such as required signatures, notarization, or delivery to the trustee) can render a purported amendment invalid, even if everyone informally “agrees.”
Attempting informal side agreements about who really approves expenses, without updating the trust or obtaining a court order, can expose the trustee to breach-of-duty claims and leave the child’s expenses in doubt if the trustee changes or relationships sour.
Because changes to trustees and distribution standards can have tax and long-term planning consequences, coordination with a North Carolina estate planning attorney (and, for tax questions, a CPA or tax attorney) is important before seeking a court order or signing any amendment.

Conclusion

In North Carolina, a parent generally cannot directly amend a revocable trust that a relative created for a child to change who approves expenses or who serves as trustee. Those changes usually must come from the settlor using the amendment method in the trust, or, if that is impossible or inadequate, from a superior court order modifying the trust or replacing the trustee in line with the settlor’s probable intent and the trust’s purposes. The most important next step is to review the trust document with a North Carolina estate planning attorney and, if appropriate, prepare either a settlor-signed amendment or a petition to the superior court.

Talk to a Estate Planning Attorney

If a revocable trust created by a relative for a child’s expenses is not working because of who controls spending decisions or who serves as trustee, our firm has experienced estate planning attorneys who can help explain the options under North Carolina law and prepare any needed amendment or court petition. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.