By its nature, an irrevocable trust cannot generally be changed. And the big fear of every irrevocable trust is inflexibility. Of the many “future looking” powers we can include in a trust, trustee replacement can be key.
A trustee replacement power is generally granted to an adult child, giving him or her the ability to change trustees if future circumstances warrant it. This can work well if a child ends up in another state, or if a bank trustee undergoes mergers that change its original character. Sometimes the relationship with the trustee can sour, and when that occurs, it makes little sense to force the beneficiary to continue with it. One thing is for sure – the absence of a good working relationship between the beneficiary and the trustee generally means the trust will not work well.
A replacement power can even allow a bank to be replaced with an individual, though some clients prefer to limit all replacement powers to a corporate entity.