Many people know to update their will, but if you have a trust, you should know how to make changes to it as well. While it is very hard to alter an irrevocable trust, a revocable trust allows you to modify its terms as your life circumstances change.
Depending on your present situation, one or more methods of updating your trust may be a suitable option.
Write a trust amendment
One way to change your trust is to draft a trust amendment. An amendment is a separate document that outlines the specific changes you want to make to your trust. You need to include the name of your trust, the date you created it, the names of the trustees, and a reference to the trust provision you want to change.
To make the amendment legally binding, you must have it notarized. The amendment should also reference the trust terms that allow you to make changes.
Restate your trust
Another option is to restate your trust. This involves creating a new trust document that incorporates all of your desired changes. The restated trust will have the same name as the original, but with updated terms.
Restatement is a good choice if you need to make significant modifications, such as altering the way the trust distributes assets or removing a beneficiary. It can also be helpful if you have already made numerous amendments and want to consolidate all the changes into one document.
Revoke and create a new trust
If the changes you want to make are extensive, you can revoke your existing trust and create a new one. This option might be preferable if you are going through a major life event, such as a divorce, and need to start fresh.
When revoking your trust, you will need to transfer the assets back to your personal ownership and then retitle them into the new trust. This process can be time-consuming and may incur additional expenses, but it can provide a clean slate for your updated trust.
Updating a revocable trust is a straightforward process that allows you to adapt to changing life situations. Before making alterations, consider the method that best suits the extent of the changes you need to make.