Your living trust is out of date and needs to be updated.
There are two options to updating your trust:
- Amendment
- Restatement
Amendment vs Restatement?
Amendment
An amendment to a trust only revisions certain sentences or paragraphs. In essence, you have an addendum to the trust that says, replace paragraph 3(A) with this paragraph. The remaining trust language remains the same, so you need a copy of the original trust document and all amendments. If you have multiple paragraphs that need to be updated, amendments become tedious, confusing and not as effective as a restatement.
Restatement
A restatement replaces every word of the original trust; it’s almost like a brand new trust. The trust name stays the same, so you don’t have to retitle your assets into a new trust. Restatements are preferred because you don’t need the original trust document to refer to. It offers more privacy. For instance, if you are removing a beneficiary, a restatement means that beneficiary will never know they were removed. With an amendment, the beneficiary can see all the changes and that they were removed.
Why a restatement?
For new clients, we almost always recommend a restatement.
It’s cheaper for you to have us restate your trust. We haven’t had a chance to get to know you and your family yet, we don’t have our notes and file open for you yet. We spend just as much time with you as someone who doesn’t have an existing trust. Further, an amendment would require us manually rewrite the update and match new language to old language. If you were to pay hourly for us to manual rewrite sections of your trust and double-check that everything a trust needs is included, you would spend a lot more money than if you simply had us restate your existing trust.
Clients often believe that they just need a simple update, to change a trustee for instance. However, when we do our 50-point review of the existing trust, we find the trust is missing critical protective language that should be included in the update as well. Once we add the missing language, the paragraph numbering gets confusing and we might as well restate the trust to keep it clear and simple.
Also, as mentioned above, an amendment also means that all your changes will be known. Some changes such as updating beneficiaries are more sensitive and keeping it private helps minimizes family conflict.
Finally, we can’t certify another attorney’s work, and the law is constantly changing. We find that it’s better for the client to have a trust with language they know was drafted correctly, with protective language, and will actually work when they need it.