Topic: Types of Updates to Your Revocable Trust

UPDATING YOUR ESTATE PLAN

By Milton Babirak, JD, LLM      |      Babirak Carr, PC     |     Sterling, VA

It’s a good idea to review and update your estate plan from time to time. The primary document of your our estate plan may be a revocable trust or a will. By its terms, a revocable trust can be revoked, amended, terminated and supplemented. In addition, you can add assets to the trust or remove assets. A will can be amended by a codicil or be superseded by a new will. It might be helpful to know how this is done in practice.

Two Common Types of Updates: Simple or Global

Frequently, people want to appoint someone else as the successor trustee of their trust or executor of their will or testamentary guardian of their minor children. Sometimes they may want to change, add or remove a beneficiary. Another common situation is the case where someone has not reviewed their revocable trust or will for many years and many changes are needed.

How to Update

If you just want to make a simple change, your lawyer can draft a concise amendment to your trust or a codicil to your will. In the case where many changes are needed, your lawyer may prepare an amendment or codicil, but it will be longer because there are more changes. Importantly, your lawyer also has to make sure that these changes fit together and do not conflict with one another or with the unamended provisions of the original document. This can be expensive because it takes more time.

Because this second scenario can be expensive, it is not uncommon for a lawyer to recommend to a client that a whole new revocable trust or will be prepared. It is cheaper since it takes a lot less time to figure out if everything fits together. But there is one important issue to keep in mind if you do a whole new revocable trust: in the original trust all or some of your trust assets were titled in the name of your original trust or you designated the original trust as beneficiary of some of your assets. If you do a new revocable trust, you have to retitle these assets in the name of the new trust or change the designated beneficiary to the new trust.

Restatement

One approach to solve this retitling problem is to state in the new revocable trust that it is a restatement of the old trust. This way, the new trust is the old trust but is restated with new terms. In such a case, you do not have to retitle the assets or change designated beneficiaries.

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