Estate planning seems to be one of those tasks that can be easy to put off. Many people feel a bit intimidated by the entire issue of trusts, which can lead to setting aside this particular facet of estate planning. A little knowledge about trusts can go a long way, and it might be helpful to understand the way trusts can (or cannot) be changed. Read on to learn more.
Trusts and Changes in General
A trust is a surprisingly simple document, and this estate planning tool deserves a place in every estate plan. It essentially does what a will does, but it can take effect as soon as it is created, as opposed to only after the death of the owner (who is known as the settlor or grantor). Trusts never need to be probated and are private. This means the beneficiaries don't need to wait for probate to be over to get access to their inherited property.
The heart of a trust is the trust document. This document will name a trustee to oversee the trust after the death of the owner. It also names the beneficiaries. Property is transferred to the trust by saying so in the trust document. Some trusts can be changed, and when they can, any change must be in writing and must be signed by the grantor under the auspices of a notary public.
This is the most flexible of the trust instruments. It can only be changed before the death of the grantor, however. Revocable trusts allow the grantor to add or remove property, change beneficiaries, and cancel the trust entirely.
The most common type of revocable trust is the living trust. Living trusts are usually meant to reduce or avoid the way probate treats the property of the deceased. It is called a living trust because it can be used to control and administer property prior to a death as well. When the owner of the trust wishes to make a change, the method used depends on the scope of the change. For minor changes, such as the name of a beneficiary, an amendment can be added to the trust to make the correction. If substantial or extensive changes are necessary, it may be best to revoke the old trust and create a new document entirely. One of the goals of a living trust is simplicity, and too many amendments can make the trust confusing and complicated.
Irrevocable trusts usually cannot be changed. This type of trust does have several variations, so it might be possible to make changes depending on the wording of the trust. In most cases, changes made with an irrevocable trust require the agreement and signatures of all beneficiaries. It is not easy to change an irrevocable trust, so special care should be used when creating it.
Speak to an estate planning attorney like those at Skeen Law Offices to learn more about creating a trust as part of your estate plan.