A revocable living trust can be amended whenever necessary, during your lifetime. When clients buy a new house or car, they may ask, "should I amend my trust?" If you are simply purchasing an asset, it is not necessary to amend your trust. You simply title the new asset in the name of your trust. In Nevada, a certificate of trust is a recognized tool to assist you in the titling process.
When should you amend your trust? When your family situation, financial status or any other facet of your life changes, it is always a good idea to revisit your trust and, if necessary, revise its terms. That flexibility is what makes a revocable living trust a very useful estate planning tool. How do you modify your trust? Never attempt to modify your trust on your own. More often than not doing so will land the trust in court where a judge will try to determine what you intended by the modification you have attempted. You entered into the trust process to avoid having your estate go to court; have the process done by qualified counsel.
There are primarily two methods for making changes to a revocable living trust. An amendment to be added to your original trust, is the simplest approach. You can also create a restatement of the terms of your trust, incorporating your changes. Restating the trust is usually best when there are several amendments or when there are a number of provisions in the trust that need revising. Either way, it is essential that you understand and follow the laws of your state, to make sure your trust remains valid and that the changes do not create ambiguity or confusion.
In some situations an amendment is sufficient to effect the changes you require. For example, if you have a child, a simple amendment that adds him or her as a beneficiary, is likely sufficient. If your spouse or a beneficiary passes away, or you change your mind about a particular gift, you can amend the trust to revise those specific terms.
On the other hand, if you anticipate your revisions will be extensive, and possibly complicated or confusing, it may be a better idea to restate the trust altogether and start from scratch. This way you can make sure the terms of your trust are accurate and clear without having to re-title your assets. Revoking the trust and starting again is usually only necessary if a married couple enters into a trust arrangement and later divorces. Revoking a trust will require the trouble and expense of starting over and transferring the property once again. Whether you simply create an amendment, restate the trust, or revoke your trust and start anew, the choice is ultimately yours.
Adding several amendments to an existing trust document can become confusing. Restating the existing trust, you update the entire trust, while keeping the original date of the trust. This way, the property that is already held in trust will not need to be disturbed. Restating voids all prior amendments, thus reducing the possibility of confusion in finally administering the trust estate.
What about amending a shared trust?
If you have created a shared trust, with your spouse for instance, either of you can revoke the trust, as to the share the revoking party contributed. The same is true of amending the trust. Obviously, it is best when amending or revoking the trust, if you both agree to those changes and do so together. Depending on the terms of the trust agreement when one spouse dies, the surviving spouse is free to amend the entire trust, or just those terms of the trust that relate to his or her personal assets. In many trust agreements, the surviving spouse cannot change any terms of the trust which refer to the deceased spouse's trust assets.
If you have questions regarding trusts, or any other estate planning needs in Reno, Nevada please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-WILL (9455).