Amending vs. Restating a Trust

When you want to make a change to your Revocable Living Trust (“Trust”), many clients ask whether they can simply amend the Trust or whether the entire Trust needs to be restated.

Generally, if the change to the Trust is a minor change such as changing a successor trustee or adding additional language to clarify an ambiguity in the document, an amendment to the Trust is going to fine.

However, if there have already been several amendments and the Trust is becoming difficult to read because of the layers of amendments, then a restatement of the Trust is preferred to avoid any confusion.

But, more importantly, a restatement is also recommended when the change raises a sensitive issue.  For example, if you decide that you want to remove a beneficiary or change the distribution scheme, a restatement is going to be a better option.  This is because the law requires that all of the estate planning documents must be given to all beneficiaries when you pass away. If your Trust is only amended, all of the amendments, together with the original trust, must be available to all beneficiaries. So for example, lets say after careful consideration you decide you want to remove your friend, Sally, from your Trust.  If you only remove Sally from your Trust by amending you trust, when you die Sally will receive a copy of your original Trust (which includes her as a beneficiary) plus the amending document in which you removed her from your Trust. However, if the Trust is restated rather than amended, the restated Trust supersedes the prior trust and any amendments.  Therefore under this restated Trust, Sally will not receive any of your Trust documents since she is not included anywhere in your new restated Trust. 

Restating your Trust is simple and does not require your new restated Trust be funded again (ie you don’t need to record new trust transfer deeds for real property, change any bank accounts or other assets that are already in the Trust).