Amendments

Many of the Trust and Will instruments will need Amendments in order to protect you and your family.

Trust Amendment is a legal document that changes specific provisions of a Revocable Living Trust but leaves all of the other provisions unchanged, while an Amendment and Restatement of Trust completely replaces and supercedes all of the provisions of the original Revocable Living Trust.

Understanding the Basics of Revocable Living Trusts

Before discussing when Trust Amendments or full Amendments and Restatements are required, you’ll need to understand what a Revocable Living Trust is – a legal contract between the Trustmaker and Trustee that can be changed at any time and requires the Trustee to oversee the management of property transferred into the trust by the Trustmaker for the benefit of the Beneficiary of the trust. The key to a Revocable Living Trust is the fact that it’s revocable – meaning that at any time while the Trustmaker is alive and competent the Trustmaker can change, modify, update, or completely revoke the provisions of the trust agreement. Since this is the case, the name of the legal document that’s required to change, modify, or update the trust agreement is called a Trust Amendment and the legal document that’s required to revoke the trust agreement is called a Trust Revocation. Contrast a Trust Amendment with a Trust Amendment and Restatement, which is a type of trust amendment that completely supercedes the terms of the original trust agreement. The name and date of your trust will stay the same (for more on this, see below), but each and every provision of the original agreement will be replaced by the terms of the restatement.

When Are Trust Amendments vs. Restatements Required?

While there aren’t really any written rules as to when an Amendment instead of a full Amendment and Restatement is required, the general rule is that if the changes that the Trustmaker wants to make are minimal – adding or deleting specific bequests, changing who will serve as Successor Trustee, updating a beneficiary’s or Successor Trustee’s legal name due to marriage or divorce – then a simple Trust Amendment will cover these types of changes. On the other hand, if the changes that the Trustmaker wants to make are significant – adding a new spouse as a beneficiary, completely cutting out a beneficiary, changing from distributions to family members to distributions to charity or vice versa – then a complete Amendment and Restatement should be considered. What if you’ve made a series of three or four simple Trust Amendments over the past 10-15 years and you want to make another change? Then consider consolidating all of your changes into a complete Amendment and Restatement – this will prove to be helpful to your Successor Trustee who will have a single document to follow instead of piecing together the provisions of four or five separate documents.

The Legalities of Trust Amendments

If you’re considering making a change to your Revocable Living Trust, don’t simply mark up your trust agreement and stick it back in the drawer. Why? Because a Trust Amendment must be signed with the same formalities as the original trust agreement, so your hand written changes will, depending on applicable state law, either void the trust agreement or be ignored. Instead, ask your estate planning attorney to prepare the Trust Amendment for you so that it will be legally valid and binding on all of your beneficiaries. The settlors may at any time during their joint lifetimes alter, amend, or revoke this trust by a written instrument signed by both settlors and personally delivered by either of them or sent by certified mail to the trustee. Either of the settlors acting alone may alter, amend, or revoke this trust insofar as it affects all or any portion of the trust estate which is derived from the separate or community property of that settlor by written instrument executed by the settlor and delivered to the trustee from time to time during the settlors’ joint lifetimes. No amendment substantially increasing the trustee’s duties or liabilities or changing the trustee’s compensation will be valid without the trustee’s written consent. The trustee will not be obligated to act under any amendment unless the trustee accepts it. If the trustee is removed for refusal to accept an amendment, the settlors will pay to the trustee any fees due and will indemnify the trustee against all liabilities that the trustee has incurred in administering the trust.