BeneficiariesEstate Planning

Consider a “Restatement”

Ask Cale Beck, ESQ –

Consider a Restatement – Updating Your Trust

When a client executes an estate plan, the idea is that the plan is perfectly tailored to suit the client’s needs at that moment and for the foreseeable future.  However, for better or worse, the only real constant in life (I suppose in addition to death and taxes) is change! 

The way your life looked 10 years ago, and the situation that your estate plan was based upon, was likely a lot different than it looks now.  This is why almost every trust we create is revocable, to allow our clients the flexibility to amend the trust as life changes.  You are not bound to the decisions you made 10 years ago, and if you have not updated your plan in a while it is time to at least take a look.

Sometimes it makes sense to just amend certain parts of your trust – for instance, to change the Trustees of a trust, to add or delete a gift, to indicate a name change, or to change a specific power of the Trustee.  However, sometimes it is advisable to amend the trust in its entirety. 

This is called a “restatement” of the trust.  If you restate a trust, you are not changing the name of the trust or the date that it is established, and you don’t have to retitle or transfer any assets into the trust again. 

However, the restatement essentially rewrites the rulebook directing the way that your assets will be managed and distributed.  The following are some of the benefits of a restatement that should be considered:

  1. Clarity of the Estate Plan: If you have several changes to make to the trust agreement, or if you have already executed several partial amendments changing only certain provisions of the larger trust agreement, then you can leave the Trustee and beneficiaries in the position of putting together a puzzle of different documents to determine the full terms of the trust.  This leaves the plan more open to challenge if there are any ambiguities between the various amendments.  If you are going to be making several changes to the agreement, or if you have already executed several partial amendments, then it may be a good idea to execute a restatement for clarity.
  2. Privacy: Upon your passing, all beneficiaries and heirs are entitled to receive a copy of the “terms of the trust.” Pursuant to Probate Code §16061.5, if the trust has been restated then the “terms of the trust” includes the restatement and any subsequent partial amendments, but does not include the original trust or any amendment executed before the most recent restatement.  If you would prefer that your children and heirs not see prior versions of your trust, this can provide some privacy because the trustee is not obligated to send that information.
  3. New Law: Our trust documents are frequently modified to keep up with new laws and to include language that we feel may be helpful based on new experience. If it’s been a while since the documents were created, you might consider freshening them up to include current language that might be a benefit to your plan.

Please contact us if you want to discuss whether a restatement of your trust is a good idea for you.  Remember, our review consultations are free of charge, and we look forward to speaking with you.

(760) 489-2938

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