As long as you have a revocable trust, it can be amended whenever you choose, during your lifetime. If your financial situation, family situation or any other aspect of your life changes, it is good to review the terms of your trust and make revisions as necessary. Many clients ask whether it is necessary to come into our office to make changes to a trust. At the very least, you will need to come by to sign, after the changes have been made.
A trust must be signed to be valid
The grantor must sign the trust for it to be valid. Essentially, a trust is a contract between the grantor and trustee. With a living trust, the trustee is typically the same as the grantor, so there is no particular need for the trustee to sign. Usually, the successor trustee is not required to sign the original trust agreement, but there is certainly no rule against obtaining all signatures, if possible.
How do I make changes to a trust?
There are three ways to make changes to a trust: amendment, restatement and revocation. You can simply draft an amendment that contains whatever changes you need to make, and then add the amendment to your original trust. In order to ensure that your trust remains valid, it must comply with the laws of your state. Your estate planning attorney can make sure your trust, and its amendments, are valid.
A restatement may be less confusing
While amendments may seem simple, once you have created several different amendments to an existing trust, the result may be confusing. An alternative is a restatement. This way you need only include the changed terms, while keeping the original date of the trust. The property that has already been transferred to the trust will not be disturbed. The process of creating a restatement is easier in most cases.
Revoking your trust and starting from scratch
Depending on the circumstances, an amendment or restatement may still be too complicated or confusing. If you have a new baby, or you get married, an amendment may be sufficient to simply add those beneficiaries. However, if the revisions you need to make are likely to be extensive or confusing, it might be better to revoke the original trust and start over. Doing this allows you to be sure the terms are accurate and easy to understand.
The only real drawback is that, all of the property already transferred to your trust must be transferred again to the new trust. This means more trouble and expense. Ultimately, you have the choice of amending your trust, restating it or revoking it and starting again. When you decide it is time to make changes to a trust, discuss the advantages and disadvantages of each method with your estate planning attorney to decide which is best for you. If you have questions regarding revocable trusts, or any other estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.