March 18, 2010

Amending a Trust

When individuals or couples write a trust (called a settlor(s)), they often ask me if they can amend or change the trust at a later time. 

For example, the settlor might decide to select a new successor trustee or choose a different beneficiary because the previously-named beneficiary is fabulously wealthy now. The successor trustee is the person who becomes the trustee after the original trustee, usually the settlor, has passed away. Per California law, a settlor may modify the terms of the trust. Prob C § 15402. In every revocable trust there should be a section which specifies how to amend the trust. For example, the trust might say that the amendment has to be in writing and must be delivered to the current trustee. 

A settlor is always free to amend the trust on their own. There is no legal requirement that you hire a lawyer to amend your trust. However most, if not all, people hire an attorney to amend the trust because most people lack experience in drafting legal documents. Thus, they would rather have somebody else do it, an attorney, because an attorney has experience with such. 

The process should only take one or two meetings with the attorney at most because an amendment or amendments typically entail minor rather than major changes. Of note, the most common amendment I have seen and done is for the name of the successor trustee to be changed. The attorney's fee to amend a trust should not substantial.

Another common question related to amending a trust is, "how often do I need to get a trust amended or updated." As a general rule of thumb, you should get your trust updated whenever you undergo a major life change: marriage, divorce, death of a spouse, birth of a child, death of a child, retirement, etc. I remember one client who told me that another attorney told her that she needed to update her trust every year. An attorney who subscribes to that belief is looking to drum up business through the dissemination of inaccurate information to clients. As stated, unless there is some major life change, there is no need to amend your trust. Thus, one can expect to amend a trust maybe once a decade.