Also known as:equitable deviations · deviation doctrine
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine permitting a court to modify the administrative or dispositive terms of a trust. The modification is available when circumstances not anticipated by the settlor have arisen and the change will further the purposes of the trust. This authority extends to converting an outright remainder into a special needs trust for a disabled beneficiary when the alteration preserves assets and advances the settlor's underlying intent.
Sources & Authorities
How it applies
Common Examples
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Disability Prompts Special Needs Conversion
Emanuel Escobar created a trust directing that restaurant properties pass outright to his son at his spouse's death. Years later the son suffered a traumatic brain injury that left him unable to manage the businesses. The trustee petitioned the court to convert the remainder into a special needs trust that would hold the assets and distribute income for the son's care. The court granted the petition because the son's unanticipated disability made the modification necessary to preserve the assets and fulfill the settlor's purpose of providing long-term support.
Unforeseen Incapacity Blocks Outright Distribution
Esme Ellington established an irrevocable trust that directed shares in a manufacturing company to pass outright to her grandson at age thirty. After the settlor's death a factory accident left the grandson permanently disabled and dependent on public benefits that an outright distribution would eliminate. The successor trustee petitioned to convert the remainder into a discretionary special needs trust that would retain the shares inside the trust. The court approved the change because the accident created unanticipated circumstances and the modification better served the settlor's goal of long-term financial security.
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Cases
Restatements
Casebooks
Course Outlines
Study Supplements
In re Stephen L. Chapman Irrevocable Trust Agreement953 N.E.2d 573 (Ind. App. 2011)
Common questions
Frequently Asked
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Does equitable deviation allow modification of dispositive terms or only administrative provisions?+
Modern doctrine permits modification of both administrative and dispositive terms. The key requirements are unanticipated circumstances and a modification that furthers the trust's purposes. Courts have approved conversion of outright remainders into special needs trusts when a beneficiary's later disability would otherwise defeat the settlor's intent to provide support.
Supporting sources
What must a trustee show to obtain equitable deviation for a disabled beneficiary?+
The trustee must establish that the beneficiary's disability arose after the trust's creation and was not anticipated by the settlor. The trustee must also show that converting an outright remainder into a special needs trust preserves assets and better advances the settlor's purpose of providing long-term support than an unmodified distribution would.
Supporting sources
Can a court grant equitable deviation over the objection of contingent beneficiaries?+
Yes. The doctrine focuses on whether the modification furthers the settlor's purposes under unanticipated circumstances. A contingent beneficiary's objection does not prevent relief when the primary beneficiary's support remains the trust's central aim and the change protects eligibility for public benefits.
Supporting sources
157 P.3d 888 (Wash. Ct. App. 2007)Wills Trusts and Estates
…the purpose of the settlor will be preserved through the modification. We agree and remand to the trial court to reconsider an equitable deviation in light of changed circumstances and the settlors' intent that the beneficiaries receive both medical care and general support from the trust's funds. FACTS ¶ 2 George X. Riddell and…
Trusts and Estates Trusts and Future InterestsTrusts · ModificationUBEFoundational