A living trust represents one’s plans for the future – the better the plans, the more structured one’s life is. That said, sometimes, even the best laid plans can be rendered useless by unexpected changes that happen in life. Changes like this can get you thinking about wanting to change your own plans – and in this particular context – your living trust.
Changing a living trust can be simple provided certain key steps are followed. Here is a guide on how you can go about that:
What type of trust do you have?
In order to understand how changing your living trust would work, you first need to understand the type of trust that you currently have. Trust are of two types – irrevocable and revocable. Irrevocable trusts are meant to be permanent, and therefore are very difficult to make changes to. A revocable trust, on the other hand, is flexible in nature, and can be easily changed or even deleted if necessary.
Why should you change your trust?
There are several reasons why you may need to change your living trust. Some of the most common reasons for this are adding and/or changing beneficiaries in the event of a birth of a grandchild, the death of an existing beneficiary, divorce, change in financial status, change in laws, moving to a state with different laws. Other reasons include a change in intention in how assets should be distributed (for example, if you decide that beneficiaries must reach an age before they inherit the assets), removing or adding a property to the trust, changing the trustee and/or the successor trustee, or making a change in the powers that would be vested in the trustee.
In the event that the sole reason you want a change in your living trust is to add property to the trust, all you need to do is transfer the ownership of that property into the trust by adding it to the trust’s schedule of assets. Given that trusts are set up in a way to readily accept new assets, making amendments will not be necessary.
Changing the living trust
The easiest method of changing a living trust is to fill out a trust amendment form. This is a legal instrument that helps you make changes to your living trust without compromising the integrity and active status of the original document. If the trust in question has been made jointly with your spouse, the agreement of both of you would be required to amend the trust.
Sections to fill out require basic information – the name of your trust, whether or not this is the first change to the trust, previous changes to the trust (if applicable), and a statement of whether the amendment overrides previous changes or will remain in effect.
When writing the change, do make sure state that you intend to make changes to the trust, refer to the relevant paragraph number in the original trust document, and then state how you will change the section. Once you are done, you must sign the living trust amendment in the presence of a notary, and then attach said amendment to the original trust document and its copies.
How to restate the trust
Besides using the amendment form, you can also make changes to the trust by making restatement. Essentially, it is total redo of the trust that allows the trust to remain active while the new document alter its provisions. Restating trusts can be particularly useful if the number of changes you are making are several in number.
Making the restatement involves filling out a trust restatement form, stating the date of the original document, restating provisions, and then incorporating the changes that you intend to make.