Amending your trust to keep it in lock-step with your changing life circumstances is critical - to ensure your true wishes are reflected in your documents. However, amending a trust is a very technical process, and if certain formalities are not followed, a trust amendment can be deemed invalid and voided. Sadly, declaring a Trust Amendment invalid can be the result of years of litigation and thousands of dollars spent on attorneys and court fees. You want to avoid this at all costs.
Here is what to be mindful of when thinking about amending your trust.
First, a Trust is a Contract, and amending a Trust requires that one has the cognitive capacity to sign a Contract. This is a higher level of capacity than the capacity required to sign a Will. If a trust creator has been deemed incapacitated by a physician, an amendment signed after such "letter of incapacity" spells out years of very expensive litigation to determine the extent of incapacity and the validity of such amendment.
Second, when capacity is not an issue, it is very important to follow the specific method of amending your trust - which is spelled out in the trust document itself. Look in your Trust for provisions about "Revocation" and "Amendment" and read them very carefully - if they call for an amendment being delivered to the trustee, or being acknowledged by a notary public (a.k.a. notarized) - then this is an EXCLUSIVE method of amending your trust. If a trust provides for an EXCLUSIVE method of amending it, and this method is not specifically followed, the intended Amendment can be deemed invalidly executed and void.
Next, when several Amendments already exist, be sure to review all prior Amendments before creating a new one - oftentimes, failure to review the terms of prior Amendments in the context of a new Amendment creates conflicts among the various amendments and the initial trust document itself. Conflicts and ambiguities generally lead to a Petition to the Probate Court for interpretation of the trust terms - which spells out high cost and delays in administering the trust.
Be also mindful of the language of your Pour Over Will. This is a Will which is generally prepared along with a revocable living trust, and which names the Trust as its sole beneficiary in the event property is left out of the trust by mistake. Pour Over Wills generally refer to the Trust - and any future amendments. However, if your Pour Over Will does not refer to "future amendments" of the trust, a new Pour Over Will should be executed to refer to the new Trust Amendment - to ensure its terms are contemplated by the Will and avoid conflicts between the two.
Where your new Amendment revises your Trustees, it is also a good idea to update your Certificate of Trust - in the event it mentions the trustees you are removing via the Amendment. Again - to avoid conflicts between the documents that are meant to work together.
When amending a Trust, especially when making changes to the distribution of property (or the trust beneficiaries), consider whether the initial trust was executed years and years ago, and perhaps its "No-Contest Clause" could be quite outdated - in this case, including a current "No Contest Clause" in your Amendment is a good idea to "protect" the Amendment from being contested. Of course, no one ever contests an Amendment that leaves them MORE than what they "got" in the initial Trust - but the opposite happens all the time - when an Amendment decreases the share of a beneficiary under the initial Trust.
Finally, if it has been a while since your Trust was created and its Schedule "A" (schedule of trust property) is very outdated, consider taking this opportunity to also update Schedule "A" to your trust, and itemize the current assets that you own (new homes purchased, new bank accounts, new retirement accounts, new life insurance contracts, etc.). Schedule "A" is a very important part of your Trust that can be updated as part of a Trust Amendment process.
If you have started a business since your Trust was signed (or have acquired an interest in a business, such as an LLC or a Corporation), be sure to also sign an Assignment of your Business to the Trust at the time you work on a Trust Amendment. Business interests are "assets" that are subject to Probate if not properly "linked" (assigned) to your living trust.
These are just a few consideration about how amending a Trust can end up involving several related documents (your Will, Trust Certificate, Business Assignment). This is the type of analysis we conduct when assisting clients with creating a Trust Amendment. Trust Amendments are really important documents and to be sure they will be upheld as valid, they have to conform to certain formalities, have to be signed, and should be notarized. Most importantly - they have to conform to any "exclusive method" of amending the trust that is prescribed by the trust.
Consulting an Attorney when thinking of amending your trust is a great investment in ensuring the validity of your documents remains intact. We are happy to discuss your specific circumstances in detail and see to it that amending your Trust is done correctly.