How Often Should I Review My Estate Planning Documents ?
Generally, it is recommended that your estate planning documents, including your revocable trust, are reviewed at least once a year. This is especially important if you have experienced any significant life changes, such as:
- Marriage
- Divorce
- Birth or adoption of a child
- Death of a beneficiary
- Acquiring new property that you want to add to the trust
- Moving to another state where the inheritance laws are different
- Changing or adding a beneficiary
- Changing or adding a Trustee or Successor Trustee
- Changing or adding property to the trust
Keep in mind that this is not a complete list and there could be many other situations that will require making changes to your revocable trust.
What happens if I Decide I Need to Make Changes to My Trust?
If you review your estate planning documents and decide a change needs to be made, the next step is determining whether you need a trust amendment or trust restatement.
What is a Trust Amendment?
A Trust Amendment revises the terms and conditions of a trust. Trust Amendments are generally only used if certain provisions of a trust agreement have to be modified, but the rest of the provisions of the trust remain unchanged. Minor changes may include updating a beneficiary’s name, changes due to marriage or divorce, adding or removing simple gifts, or naming a different trustee.
What is a Trust Restatement?
A Trust Restatement completely replaces all the provisions of the original revocable living trust with new provisions that meet the current goals of the creator of the trust. A Trust Restatement is usually recommended if the basic goals of forming the trust have changed, or if all or main provisions of the trust agreement need to be changed. Changes in the number of beneficiaries, changes in the way in which the funds or assets are to be distributed, or compliance with new laws are a few of the significant changes that may require a restatement.
A Trust Restatement may also be recommended if the trust has already been amended several times and consolidating all changes in a clear manner will help provide clarity and avoid confusion. A Trust Restatement may also make sense if federal and state estate tax laws change, or new administration laws are enacted.
Trust Amendment v. Trust Restatement:
While an amendment makes sense for minor changes, a restatement may be vital if major changes are made. There is no specific rule regarding when you should use a restatement or how many times a trust can be amended before it needs to be restated. Handwritten changes may not be acceptable in some states or might be considered invalid. In Florida, handwritten changes to your trust document after it has been executed are not valid.
