The simple, knee-jerk answer to that question should be no, as that’s the point of an irrevocable trust. But, believe it or not, if you said that, you’d be wrong. There are actually several different ways to revoke an irrevocable trust. It’s not a simple procedure, but there are certain times that it makes sense to get rid of it and start over.One such time would be when a trust was set up 10 or 15 years before. Given the changes in the income and estate tax laws, the trust may be more trouble and expense than it’s worth. Worse, a trust set up to save taxes might even increase them.

The common situation involves a bypass or credit shelter trust. In an old-style typical estate plan, when the first spouse dies, say the husband, assets equal to his exemption from federal estate and gift taxes are placed in this trust. The surviving spouse has access to the earnings and if need be the principal, but at her death the trust assets bypass her estate and go straight to the kids. The point is to preserve the husband’s exemption from estate tax. It made sense for a lot of families when the amount exempt from federal estate tax was $675,000 per person in 2001 or even $2 million in 2008.

But in December 2010 Congress temporarily upped the exemption to $5 million and in January 2011 made that exemption permanent and indexed for inflation. (It’s up to $5.34 million for 2014.) Furthermore, since 2011, spouses have been able to inherit each other’s unused exemptions. So, now a couple can actually shield a combined $10.68 million from federal estate tax without a bypass trust. But, with the trust in place, when the husband died, a much greater amount of assets ended up going into it than desired, possibly even leaving the surviving wife with very little.

What if your spouse died years ago? Inheriting a spouse’s exemption isn’t retroactive and had to be taken when he died. But if your own assets, combined with what’s in the trust, are below $5.34 million, your family might save income tax by getting rid of the trust. For one thing, when you die, the tax basis of your directly owned assets (but not those in the trust) get “stepped up” to their current market value, meaning heirs can sell immediately without owing any capital gains tax. For another, if you leave earnings accumulating in the trust, it can cost extra taxes. Undistributed trust income is taxed at the highest individual income tax rate, which is over 40%. By contrast, any income from assets you own directly would only pay a max of 28%.

So, how do we get rid of this type of trust? Most bypass trusts actually allow the trustee to distribute the assets to the surviving spouse. The trustee normally wouldn’t want to do this as it puts all the assets back into the spouse’s estate. A trustee can also terminate a trust if it’s relatively small ($100,000 or less) or if it’s uneconomical to maintain it ($5,000 annual trustee fees on a $200,000 trust) or, in legalese, if it doesn’t serve a “material purpose” of the creator. If the trustee won’t go along, you would have to petition a judge to terminate the trust.

But be careful. Before you decide to take apart your bypass trust, consider whether it’s needed to shield your family from New York State estate taxes (New York only has a $1 million exemption), or to protect the money from going to creditors or a new spouse. Also, if a trust is actually sitting with a capital loss (say it was funded with a residence before the housing market crashed), there might be a tax benefit to keeping it intact.

The other good time for an “irrevocable” trust to be revoked is in the case when a Medicaid qualified trust was set up but the grantor (or grantor’s spouse) needs nursing care before the five year look-back has expired. The Department of Social Services would tell you that the grantor is not eligible for Medicaid and that there will be a penalty period because of the transfer of assets into the trust. In order to get rid of that penalty period, the grantor needs to get the assets back into his name and then do something else with the assets to qualify for Medicaid.

This time the trust is actually revoked by statute (specifically NYS E.P.T.L. 7-1.9(a)). But in order to accomplish this “all persons beneficially interested in trust property” have to agree to revoke the trust. This is easier said than done. If there are minors as contingent beneficiaries, or if a grantor or trustee has died, the task then becomes almost impossible. The court will appoint a temporary guardian for the minors to make sure their interests are protected. It’s rare that the guardian would then agree to revoke the trust as it’s almost never in the minor’s best interest to do so. If a trustee has died and the successor has taken his or her place, they may not want to do what the grantor would like and revoke the trust. Worse, if one of the grantors has died, the trust then truly becomes irrevocable as it is now impossible for all of the persons to agree.

So, can you revoke an irrevocable trust? Yes, but it is difficult to do and should only be attempted after careful consideration. You don’t want to end up worse off than when you had the trust.