A living trust is one of the most important estate planning documents you can have. But what happens when you need to change your existing living trust? Knowing how to amend a revocable living trust properly is key. In this comprehensive guide, we’ll cover everything you need to know about amending your living trust in 2023 – from why you may need to make changes, what the amendment process looks like, and how much it costs to amend a trust.
What is a Living Trust Amendment?
A living trust amendment is a legal document that modifies an existing revocable living trust. It allows you to make changes to your original trust document, such as:
- Adding or removing beneficiaries
- Changing trustee appointments
- Updating property transfers
- Modifying distribution instructions
- Adjusting administrative provisions
- Accounting for major life events like marriage, divorce, or the birth of a child
Amendments provide flexibility to alter your trust as your circumstances and estate planning needs evolve over time. They ensure your living trust stays current and accurately reflects your wishes.
When Would I Need to Amend My Living Trust?
There are many reasons you may need or want to amend your living trust, including:
- Marriage or divorce – If you get married or divorced, you’ll likely need to update your trust to include or remove your spouse as a beneficiary. You may also want to change successor trustee appointments.
- Birth or adoption of a child – Adding a child as a beneficiary requires an amendment. You may also want to designate a guardian for minor children.
- Death of a beneficiary – If a named beneficiary dies before you, you’ll need to modify distribution instructions and potentially add new beneficiaries.
- Change in assets – If you buy or sell property, your trust will need amendments to reflect ownership accurately. You may need to retitle assets or transfer property into your trust.
- Move to another state – If you move, you may need to update provisions to align with laws in your new state.
- Changes in estate tax laws – Tax law changes may require amendments to maximize tax advantages and minimize liability.
- Health changes – Updates regarding successor trustees or agents under powers of attorney may be prudent if your health declines.
- Desire to change terms – You may change your mind on distributions, trustees, or other trust terms and need amendments to reflect new wishes.
How Do I Amend My Living Trust? What’s the Process?
Amending a living trust is usually a simple, straightforward process. Here are the typical steps:
- Review your trust – Carefully read over your original trust document and note any changes you wish to make. Pay close attention to sections on trustees, beneficiaries, property transfers, distributions, and administrative clauses.
- Draft the amendment – Work with an estate planning attorney to draft your living trust amendment properly. You’ll want to be as precise as possible in describing the changes you want to make.
- Sign the amendment – You and your spouse (if applicable) will sign the completed amendment document in front of a notary public. This executes the legal change.
- Attach amendment to trust – Your attorney will attach the fully executed amendment to your original trust document, either with staples or by referencing it in a trust restatement.
- Retitle assets (if applicable) – If your amendment modifies property transfers, you may need to retitle assets to align with changes. Your attorney can help facilitate this.
- Distribute copies – Distribute updated copies of your complete trust document to all parties (successor trustees, beneficiaries, etc.).
- Store original – Keep the original amendment and updated trust document in a safe but accessible place. Tell loved ones where they are stored.
What Does it Cost to Amend a Living Trust?
The cost to amend your living trust depends on a few factors:
- Complexity of changes – Simple amendments may range from $150-$500. More complex revisions will cost more.
- Your state – Prices vary by state and even by county based on attorney fees. Larger metro areas are often more expensive.
- Lawyer’s experience – Attorneys with more estate planning experience typically charge higher rates. Expect to pay more for an expert.
- Retitling of assets – Assistance with re-titling assets to align with trust changes will increase costs.
Overall, you can expect to pay somewhere between $500-$1500+ for moderate changes to your trust. Extensive amendments may run upwards of $3000 or more. Though not cheap, proper trust modifications are worth the investment to keep your estate plan current. Shop around to find a qualified lawyer with reasonable rates.
Should I Create a New Trust?
Rather than amending your existing trust, you might wonder if you should create an entirely new one. There are pros and cons to each option:
- Faster and cheaper than new trust
- Preserves existing provisions that still apply
- Maintains original trust creation date
- Can become convoluted after multiple changes
- Original terms still apply if not addressed
New Trust Pros
- Fresh, clean document
- Opportunity to fully reevaluate terms
- May reduce future amendments
New Trust Cons
- It is more time-consuming and expensive
- It may be unnecessary if most terms are still applicable
- Loss of original creation date
Amending your current trust is likely the best approach for most minor to moderate changes. However, significant life events or a desire for an overhaul may warrant drafting a new trust. Discuss options with your attorney.
Key Takeaways on Amending Revocable Trusts
Amending your living trust allows you to update your trust document to keep pace with changing life circumstances and estate planning needs. Here are some key points to remember:
- Review your trust periodically to see if any changes are needed
- Work with an estate planning lawyer to properly draft and execute amendments
- Be precise in describing trust modifications you want to make
- Attach the amendment to the original trust document
- Retitle assets if the amendment impacts property transfers
- Distribute updated trust copies to all parties
- Store original amendment and updated trust in a safe, accessible place
- Moderate amendments often range $500-$1500+ in lawyer fees
Keeping your living trust up to date through thoughtful amendments is crucial to ensuring your wishes are followed and your legacy protected. With a proper understanding of the amendment process, you can easily modify your trust as needed well into the future.