Trust amendments can often be misunderstood, but are very useful tools for your trust. When you spend the time to create a trust, you want to make sure you are taking the “long” view. When you’ve set it up, there are often assets to be transferred. If the assets are real estate and bank accounts, there can be significant paperwork to retitle the asset into the trust’s name. Depending on where you live, there can even be filing fees for the process. So after going through all of that work to create and fund your trust, what do you do when you want to make a change?
I was between sets on the tennis court this weekend when my partner and I got onto exactly this subject. He and his wife had set up a trust years ago. They have a cabin that the trust owns and some other vacant property as well. At the time they set up the trust, their children were underage and they appointed his brother as the successor trustee. But now, the children are grown, they love spending their summers at the cabin, and his brother is a bit older and doesn’t live nearby anymore. He had spent the week looking at websites to try and find an answer, but then apparently he remembered that he plays tennis with an attorney each weekend (and apparently maneuvered to make sure he was my partner for tennis). After all his research, he decided trust amendments weren’t something he wanted to do himself.
What Is A Trust Amendment?
Rather than create a whole new trust, my friend needs a trust amendment. The amendment is a separate legal document that changes specific portions of your trust. It leaves the rest of the trust unchanged. This is different from a restatement, which is used to replace and supersede all of the provisions of your trust. There’s no set rule for when an amendment is used instead of a restatement, but generally, an amendment is used for small changes, such as
- Changing successor trustees;
- Updating someone’s name (they got married or divorced); and
- Adding or deleting specific bequests.
Over time, however, your amendments can add up. If it takes you more than one hand to count your amendments, it may be time to restate your trust to make sure you have one coherent document for your trustees to work with.
When Should I Use A Restatement?
When you are making significant changes to a trust, a restatement is often a better option. There can be many different major changes, but some examples are
- Removing a beneficiary from the trust;
- Adding a new spouse as beneficiary; and
- Changing distributions for charitable reasons.
Whether you are considering an amendment or a restatement, it’s a good idea to at least consult with an attorney who can help parse out the issues for you.
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- Do I Still Need An Old Trust That Was Drafted 20 Years Ago?
If you are interested in amending or restating your trust, or if you need a trust drafted, call my office to set up a Legal Strategy Session and we can review the best options for you – (877) AMAYERS.