The goal of estate planning is to provide security for your family’s future, by creating a comprehensive, customized plan for your assets. A revocable trust is one of many valuable options for estate planning. As with most things, however, the plan may need to change, as your financial situation or family dynamic changes. So, if you are wondering: you change your trust when the time comes, You actually have several options.
Why revocable trusts are useful
One great benefit of a revocable trust is that it can be modified at any time, during your life. In fact, whenever your circumstances change, it is a good idea to review your trust and make any revisions that are necessary. It is this flexibility that makes a revocable living trust an extremely useful estate planning tool.
Ways to modify a revocable trust
Making changes to a revocable trust does not have to be a complicated process. There are basically three methods: amendment, restatement or revocation. Revocation is not technically a modification, but it is still a way to change the terms of an existing trust. No matter which method you choose, there are certain laws that may affect whether or not your changes are valid. So, be sure to consult with an estate planning attorney in your state to make sure your changes will be valid.
Modifying your trust by amendment
There can be some situations where an amendment is all you need. For example, if you get married or have a baby, an amendment that adds new provisions for the new additions to your family will likely be sufficient. Adding new property to your trust, or changing your beneficiaries can also be accomplished quite easily with an amendment.
In some cases, revocation may be a better option
On the other hand, if the revisions you are considering will be complex or extensive, it may be a better idea to simply revoke the trust entirely and draft an entirely new one. By revoking the original trust and starting over, it will be easier to ensure your new terms are clear and accurate. The main drawback, however, is that you will need to once again go through the hassle of transferring certain property to the new trust.
Creating a restatement of your trust
Amending your trust once, can be an easy way to modify its terms. However, if you add too many amendments, it can get confusing. Another option is to restate the existing trust, without revoking it entirely. This way, you only need to include the changes you need to make, while retaining the original date of the trust. You will not need to re-transfer your trust property, which saves money and hassle. In fact, restating a trust is a very simple process. You need only state that the trust is a restatement of the original, and indicate that the original terms of the trust remain in force, with the exception of the new terms.
If you have questions regarding revocable trusts, or any other estate planning needs, please contact Wilcox Attorneys, PA online or by calling us at (470) 443-0062.
- Estate Planning is Essential Whether You Are Married or Not - April 25, 2018
- Income Tax Basis in Estate Planning – Part 2 - April 23, 2018
- The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages - April 18, 2018