How do you modify your revocable living trust?
In California, a trust is revocable unless the document provides otherwise. California Probate Code Section 15400 states:
Unless a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the settlor. This section applies only where the settlor is domiciled in this state when the trust is created, where the trust instrument is executed in this state, or where the trust instrument provides that the law of this state governs the trust.
The ability to revoke a trust also includes a Trustor's right to modify the terms of the trust as well. This is specifically provided for under California Probate Code Section 15402, which provides:
Unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation.
*Settlor is synonymous with the term "Trustor" or "Grantor". It simply means the person who created the trust.
Because there can occasionally be confusion after the Trustor's death as to whether additional writings are valid amendments to the revocable trust, the terms of the trust should include specific provisions regarding how an amendment should be made.
Describing the specific procedures can also help to show the Trustor's intent to make a valid and enforceable amendment. Some common requirements include:
- The need for the Trustor to create a writing which specifies the modifications he or she is making to the trust.
- That the amendment be delivered to the Trustee.
The latter requirement is often informal since a Trustor is typically also the Trustee while he or she is competent and alive.
Amendments v. Restatements
Amendments to revocable living trusts are sometimes created in the form of a "restatement". An amendment to a trust normally refers to a document which purports to modify a few provisions of an existing document. As a result, to understand the complete terms of the trust, one would need to have the original terms of the trust as well as the amendments to it to understand how the trust works.
A restatement, on the other hand, is an amendment to a trust which re-writes the entire document. With a restatement, there's no need to reference look at prior documents since the restatement itself contains all of the terms of the trust. A restatement is often preferred when one wants to make numerous changes to an existing trust document.
If you have a revocable living trust, you may find yourself needing to have an amendment prepared if you or your family experience major life changes. Luckily with modern word processing tools, this process is painless. Discussing your ideas with an estate planning lawyer will often allow you to accomplish your goals in the most efficient manner possible.