Although trusts were once used only by the rich and famous, that is no longer the case. Today, even the average estate planner can benefit from the use of a trust in his or her estate plan. If you have chosen to incorporate a trust into your estate plan, you may wonder what happens if you want to make a change to the trust. The answer to that depends on what kind of trust you created.
Trusts are first divided into two categories – testamentary and inter vivos, or living trusts. Because a testamentary trust only becomes effective when you die, it can easily be changed at any time up to that point. A living trust can further be categorized as irrevocable or revocable. As the name implies, changing an irrevocable trust is virtually impossible absent a court’s intervention. A revocable trust, however, can be changed by the maker.
Although people often try to make small changes or corrections to a trust document by simply making “margin notations” and then initializing the changes, that is really not the preferred method as it can lead to confusion or a challenge to the authenticity of the document. A better method is to create a trust amendment or trust restatement. A trust amendment is basically just a piece of paper on which you note the changes and then “amend” to the original trust document. A trust restatement is usually used for more extensive changes. That allows you to essentially replace the entire trust while still retaining the original date and trust terms.
If you decide that changes to your trust are warranted, be sure to contact your estate planning attorney to determine which method is best for you or join us for one of our upcoming estate planning seminars.
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