tax code

When should you amend your trust?

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Many times people create trust during their lifetime and they face situations that may require amendments to the trust.  If changes are required to your trust, a trust amendment is the proper way to make the changes. Handwritten marks and notes on the trust document are not considered legal changes. An amendment specifically states what paragraphs of your trust is being changed, and sets forth the new trust language. The amendment may be short, or it may be so drastic that it actually changes the entire trust, from the first word to the last.

What are some reasons why you may need to amend your trust?  Some trusts are completely out-of-date, or irrelevant due to changes in the statutes, case law, or just poorly written. Some trusts may have provisions that are illegal, or contrary to the client’s wishes. Some people need their trusts revised or updated because of changes in their wealth or family circumstances.

Lengthy or complicated trust amendments may be difficult, costly, time consuming and hard to follow for future trustees. Therefore, a good estate planning attorneys will recommend a trust restatement. A trust restatement is a document which completely restates the entire trust agreement, and a new trust is created through the amendment and restatement.

Although a restatement is basically a new trust in the form of a trust amendment, the name of the old trust and the date that it was established remain the same.  Therefore, there is no need to obtain a new tax identification number, move funds to new accounts, change deeds, etc.

With the many tax law changes in recent years, concerns about future ill health and incapacity, or with changes in your family situation, it is recommended to have your trust reviewed by an attorney. A simple amendment may be all that is required or it may be necessary and more efficient for the attorney to restate the entire trust.

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