It is not uncommon to revise a will more than once throughout your lifetime. Circumstances are bound to change, and so must our estate plans. Like a will, you can revoke living trusts whenever you desire. In fact, that is one of the benefits of creating a revocable living trust – its flexibility.
Should I amend or revoke living trusts?
The choice is always yours. However, there are some situations where an amendment may be sufficient. For example, if you get married or have a child, if you eliminate substantial property that was to be specifically distributed to a particular person in the trust, if your spouse or a beneficiary dies, an amendment would be in order. If you change your mind about who should inherit a particular item, or if you move to a state that has different laws that will affect the terms of your trust, an amendment may also be necessary.
If, on the other hand, if you need to make extensive revisions that may prove to be somewhat confusing, or if you get divorced, either restating or revoking the trust entirely is usually required. Either way will allow you to start fresh and be sure to include those terms that will meet your changing needs.
How can I revoke living trusts?
If you want to make changes to a will, it is easy to revoke the will entirely by simply executing a new one. Well drafted wills revoke all prior wills. It is a little more complicated with a living trust, however, because the property in the trust has already been transferred. You could revoke the trust, draft a new one and transfer the property again. Because the expense and trouble of doing this is substantial, restating the living trust agreement is usually a better option. A joint married living trust, however, will require revocation of the trust in the event of a divorce.
Simply adding amendments to an existing trust document can get confusing. However, if you restate the existing trust, without revoking it entirely, but include in the restatement any necessary changes, you can keep the original date of the trust and not have to re-title the property that is already held in trust. By doing so, you also eliminate the headache of trying to go through many amendments, which can create confusion, waste time and cost more in administration fees.
Look at it this way. You create a living trust transferring your house to the living trust, making yourself trustee. You name your sister as your successor trustee. Let’s say three years later, you decide you should name your brother as successor trustee, instead. That would require a simple amendment. Then you decide to change a beneficiary; now another amendment. Next, you decide that you really wanted your sister to be a trustee after all. Next, your attorney informs you that there has been a significant change in the law, so you amend again. After several of these, it would be easy to miss something. To eliminate the possibility of confusion, you can simply create a new trust that clearly indicates it is a restatement of the original trust. The restated trust will make it explicit that all trust amendments are now irrelevant and the terms you want are now in effect. It’s that simple.
Are there any differences in joint trusts?
If you create a joint trust with your spouse, for example, either of you can revoke the trust as to the share of the assets the revoking spouse contributed. The same is true of an amendment. You can see, however, that if you decide to revoke or change any of the terms of the trust, it is best if both of you agree to do so in writing. After one spouse dies, the surviving spouse is free to amend the terms of the trust, if the trust is a “married simple trust”. If the trust divides into a trust for the surviving spouse and another trust for the deceased spouse’s assets, the surviving spouse cannot change any terms of the deceased spouse’s trust.
If you have questions regarding revoking, restating or amending a trust, or any other estate planning needs in Reno, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.