Part 7 of a series breaking down the process of helping clients set up Trusts by breaking the issues down into smaller, individual topics, enabling the adviser and client to take the necessary steps, and get the plan moving.

Revocable trusts can be changed quite easily. Modifications usually arise when the client has decided to make a change in how the trust should be administered after his/her death or wants to change who is to receive the benefits. Circumstances change over time as beneficiaries marry, have children, divorce, move away, and sometimes, predecease you.

As we discussed in our earlier Wills topic, it is important that the change be done correctly. While a Codicil to a Will has to be executed with the same formalities as a Will (meaning it has to be signed in the presence of witnesses who sign to that effect), a trust modification does not. Just like a Trust (which is essentially just a contract) only needs to be signed by the Grantor and Trustee, as does the Modification. If the Grantor is also the Trustee, you can see how quickly a change can be accomplished, as only one person needs to sign.

If extensive changes are needed, such as a completely new plan for who is to get what, or there have been dramatic changes to the law, it may be better to “restate” the Trust in its entirety.

Just as with Wills, while there is nothing wrong with making changes, whether substantial or minimal, in a series of modifications, it often becomes more confusing for the client (and, later on, the trustee) to keep track of what is the most recent document, what differs from one document to the next, where all the documents are located, and so forth. A restated Trust can clarify the plan, keep it all in one document, and minimize the risk of future confusion and disputes. In addition, by restating the Trust, the Trust keeps its original creation date. That is important because the assets in the Trust (or designated to pass to the Trust) do not need to be re-titled.

Speaking of assets in the Trust, our next topic will be funding the trust once it's been established.   

You can each out to Dan with any questions. Our attorneys are always ready, willing, and able to meet and discuss any questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small steps, the problem that used to lead to procrastination and uncertainty has been addressed and resolved. Learn more about Mansour Gavin’s Estate Planning & Probate group or contact us today.