A comprehensive living trust estate plan typically involves a variety of legal documents, strategies and options. Your estate plan is also likely to change over the years as life events call for changes in your plan. If you have chosen to include a trust in your estate plan you may, therefore, need to make changes to the trust. Whether or not you can make changes to a trust depends on the type of trust you created; however, if your trust can be changed, effectuating those changes is usually fairly simple.
Trusts are divided into two broad categories – testamentary (in a Will) and inter vivos (living) trusts. A Testamentary trust does not take effect until your death and, therefore, can be changed or revoked by you any time prior to your death. A living trust becomes effective as soon as all the formalities of formation are complete and sufficient assets are transferred into the trust to fund the trust. Living trusts are further divided into revocable and irrevocable trusts.
If you created an irrevocable living trust it cannot be modified, changed, or revoked by you once it becomes effective. Under certain narrow circumstances a court may be able to change or even terminate an irrevocable trust; however, the maker of the trust cannot do so.
If you created a revocable living trust is can be changed by you at any time and for any reason. Changes can be made by amending the trust or by a trust restatement. To amend a trust you simply attach a trust amendment to the original trust documents. The amendment must state in precise details what is to be changed. If anything is to be deleted from the original trust documents you must include this in the amendment along with anything to be added.
A living trust restatement is best for multiple changes or for a trust of long duration that is likely to require numerous changes. A trust restatement requires you to create a new trust document that “restates” the original trust with the intended changes built in to the new document. Though this may seem like creating an entirely new trust it has one important legal advantage over creating a new trust — assets do not have to be transferred out of the original trust and back in to the new trust.
Although changing a trust is relatively simple to accomplish, be sure your Illinois estate planning attorney incorporates the changes for you to ensure that they are done correctly and legally and properly states your wishes.
- My Parent/Spouse Shows Early Signs of Dementia. Can We Still Do Medicaid Planning? - July 20, 2015
- What Happens to a Living Trust When One Spouse Dies? - July 13, 2015
- Medicaid Spousal Impoverishment Rules - July 7, 2015