Tuesday, May 21, 2013

Proper Steps To Amend A Trust

First, only a revocable trust may be amended, and that power must appear in the trust document, and identify what party or parties have the right of revocation and amendment.

Normally, it is the settlor or settlors (sometimes referred to as the trustors or grantors) who have the power of amendment.

Even then, their power may be limited to certain assets or sub-trusts within the trust.

Thus, the first thing that must be done is to review the trust document for the terms concerning amendments to the trust.

Second, the amendment must be made in a proper legal writing.  Just as the trust was created by an appropriate legal document, an amendment must follow the same requirements.

There are 2 kinds of documents typically used to amend a trust, (1) the amendment and (2) the full restatement.   A qualified estate planning lawyer will use both methods, depending on the circumstances.   

Failing to keep the trust up to date through a proper amendment will result in unintended consequences due to the fact that the changes that the settlor wants in the trust will not be enforceable.

Oral instructions to the successor trustee, post-it notes, line outs, and hand-written revisions may fail to amend the trust.   

Dwight Edward Tompkins,
California Estate Planning Lawyer,
Orange, California.