Remember that dusty estate plan you have sitting in your drawer? The binder with your will naming Uncle Henry as executor, except that he’s not around anymore? Time for an update on your estate planning documents. What are your options?
You have three choices: amend, restate, or start over.
The first step to deciding whether you can amend or restate is determine whether your trust document is irrevocable or revocable. “Irrevocable” trusts cannot be amended. If you find yourself in that situation, don’t stop there however, there are other options, often built into the irrevocable trusts that may allow you to make the change you’re looking for.
If you have a revocable trust, congratulations, those are designed to be completely changeable. Changes range from the simple, like changing who the executor and successor trustee will be, to the potentially complex, like modifying your beneficiaries, to the really complex where changes in life situation or changes in the law make your current document completely obsolete.
You’ll want to have a document that clearly lays out the authority given to you as the trustee to amend by referencing the section in your trust giving you that power. You’ll want to identify the section you’re replacing, and you’ll need the new language. You should have the amendment notarized, and it is the best practice to execute a new will referencing the amended trust document, and have a new trust certificate created at the same time.
An “Amendment and Restatement” of the trust document doesn’t replace one or more sections in a trust; it replaces the entire trust document. Don’t throw the old trust out however! A restatement has the advantage that it is easier to understand since you are not going back and forth between two or more documents.
3. Start over
In rare cases, it may make more sense to create an entirely new and separate trust. Examples of this might be a change in marital status or a complete change in the objective of the estate plan. When you and your attorney determine that it would be best to start over, you have the option of terminating the old trust, or amending the old trust to benefit the new trust.
Remember, an outdated plan can create additional headaches at best, and expensive litigation at worst. It is up to you to make sure that your estate plan stays current.