A Revocable Living Trust Amendment vs. a Trust Restatement
Small Changes vs. Big Changes
A trust amendment is a legal document that changes specific provisions of a revocable living trust but leaves all of the other provisions unchanged, while a restatement of a trust—which is also known as a complete restatement or an amendment and complete restatement—completely replaces and supersedes all of the provisions of the original revocable living trust.
The Basics of Revocable Living Trusts
A revocable living trust is a legal contract between the trustmaker and trustee that can be changed at any time and requires the trustee to oversee the management of property transferred into the trust by the trustmaker for the benefit of the beneficiaries of the trust. While the trustmaker is still alive, they act as their own trustee. After they have died, a new trustee—called the successor trustee—takes over.
A key point of a revocable living trust is the fact that it's revocable—meaning that at any time while the trustmaker is alive and competent, the trustmaker can modify (through a trust amendment) or completely revoke (through a trust restatement) the provisions of the trust agreement. That's in comparison to an irrevocable living trust, which can not be modified or negated.
The living in living trust means that it goes into effect while the trustmaker is still alive. A testamentary trust, in contrast, doesn't become effective until the trustmaker has died.
A living trust is also known as an inter vivos trust, from the Latin for "between living people."
Trust Amendments vs. Restatements
While there really aren't any established written rules as to when a restatement is required, generally speaking, if the changes are minimal, such as 1) adding or deleting specific bequests, 2) changing who will serve as successor trustee, or 3) updating a beneficiary's or the successor trustee's legal name due to marriage or divorce, then a simple trust amendment will suffice. On the other hand, if the changes that the trustmaker wants to carry out are significant, like 1) adding a new spouse as a beneficiary, 2) completely cutting out a beneficiary, or 3) changing from distributions to family members to distributions to a charity (or vice versa), a complete restatement should be considered.
Additionally, if you've made a series of three or four simple trust amendments over the years and you now want to make another change, consider consolidating all of your changes into a complete restatement. Doing so would prove helpful to your successor trustee, who would have a single document to follow instead of needing to piece together the provisions of four or five separate documents.
Finally, if your state's laws governing revocable living trusts have changed, you should create a restatement of your living trust document to comply with the new laws.
Consulting Your Estate Planning Attorney
If you're considering making a change to your revocable living trust, don't simply mark up your trust agreement and stick it back in the drawer. A trust amendment must be signed with the same formalities as the original trust agreement, so your handwritten changes will, depending on applicable state law, either void the trust agreement or be ignored. Instead, ask your estate planning attorney to prepare the trust amendment for you so that it will be legally valid and binding on all of your beneficiaries.
No Name Change
The original name and date of your revocable living trust will remain the same after either a trust amendment or a restatement. So all of the hard work you put into funding your revocable living trust under the original trust name and date won't need to be undone.