The main choice between an amendment vs. a restatement whether you're making small changes vs. big changes.
As part of an amendment to a revocable living trust, specific provisions may be changed, but the other provisions remain the same. In contrast, a restatement of a trust-also known as an amendment and restatement-completely replaces and supersedes all the provisions of the original trust.
The Basics of Revocable Living Trusts
Trustees must oversee the management of property that has been transferred into the trust at the direction of the trustmaker for the benefit of the trust's beneficiaries under a revocable living trust, which can be changed at any time. Trustmakers who are still alive act as their own trustees. But when a trustee dies, a new trustee takes over—the successor trustee.
Revocable living trusts are important because they are revocable-that means they can be modified (by a trust amendment) or revoked (by a trust restatement) by the trustmaker at any time while the trustmaker is alive and competent. Compared to an irrevocable living trust, which can not be modified or revoked.
When a living trust is executed it goes into effect while the maker of the trust is still alive. In contrast, a testamentary trust, doesn't go into effect until the trustmaker dies.
A living trust is also known as an inter vivos trust, from the Latin for "between living people."
Trust Restatements vs. Amendments
Although there are no established written rules stating when a restatement should be made, 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.
Alternatively, if the trustmaker wants to make significant changes, such as:
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.
You should also consider consolidating all of your amendments into a complete restatement if you have made three or four simple trust amendments over the years. Having one document to follow will make it easier for your successor trustee, as they won't have to piece together provisions from four or five documents.
Last but not least, if your state's laws regarding revocable living trusts have changed, you should restate your living trust document to comply with the new laws.
Consult with Your Estate Planning Attorney
Are you considering making a change to your revocable living trust? Don't simply mark up your trust agreement and throw it back into the drawer. Your handwritten changes will, depending on the applicable state law, void or ignore the trust agreement if they are not signed with the same formalities as the original trust agreement. If you want the trust amendment to be legally valid and binding on all your beneficiaries, ask your estate planning attorney to prepare it for you.
No Name Change
Whether the trust is amended or restated, the original name and date will remain intact. The time and effort that you put into funding your revocable living trust under the original trust name and date will not need to be redone.
As always speak to an attorney first.