Your living trust is your plan for the future. Sometimes, no matter how well you plan, life offers some unexpected twists and you may wonder how to make changes to a living trust. A few simple steps will allow you to make the changes you need.
Before you can begin changing a living trust, you need to understand the type of trust you have. If you have an irrevocable trust, it is extremely difficult to make changes to it because the trust was set up to be permanent and not alterable. Most people, however, create a revocable living trust. A living revocable trust is designed to be flexible so you can make any change you want to it. You can even delete the entire trust if you wish.
Reasons for changes
There are many reasons that you may find you need to amend a living trust. If you decide to change or add beneficiaries if you have a new grandchild or suffer the loss of one of your existing beneficiaries, you may wish to make changes. You might decide you want to change when or how the assets in the trust are distributed (such as deciding you’d like your beneficiaries to reach a certain age before inheriting). You may find you want to change your trustee or successor trustee or you might choose to change the powers given to your trustee. You can also amend a trust if you decide to add or remove property from the trust. Common situations that lead to a trust amendment are divorce or marriage, birth of a child or grandchild, a move to a state with different laws, a change in tax laws, a change in your financial situation, or the death of a beneficiary.
Note that if you are simply adding property to the trust, you probably do not need to do anything other than transfer ownership of that property into the trust. Add the item to the schedule of assets in the trust and it is owned by the trust. An amendment is not necessary since your trust is set up to accept new assets.
How to change a living trust
The simplest way to make a change to a living trust is with a trust amendment form. A living trust amendment allows you to make changes to an existing trust while keeping the original document active. If you have a joint trust with your spouse, you both must agree to any changes to the trust.
Fill out the form with the name of your trust. If this is the first change you’ve made to the trust, state that. If you have made other changes to the trust, you will need to list them by date. Indicate if this amendment overrides those previous changes or if you want them to remain in effect.
When you write the change you are making, be sure to refer to the original trust document by paragraph number so it is clear what provision you are changing. Be very clear about how you are changing this section of the trust. Make sure you state you are amending this section of the trust. Sign your living trust amendment before a notary. Attach the amendment to your original trust document and to any copies you made.
Restating a trust
Another way to make changes to your trust is to create a trust restatement. A restatement is a redo of the entire trust. The trust remains in effect, but its provisions are altered by the new document. This can make sense if you are making a great number of changes to the trust. Complete the trust restatement form, indicating the date of the original document and then restating the provisions, incorporating the changes you are making.
It is almost never a good idea to revoke your trust and start over because you will need to transfer assets out of the trust and then back into the new trust. Assets can get forgotten in this process. If you do wish to do this, you need to create a separate document stating you revoke the old trust, or state this in the new trust document. If you have a joint trust with your spouse, either of you can revoke it.
A trust amendment allows you to keep your trust current. Carefully updating your trust allows you to make sure your wishes are being carried out.
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