Changed Your Mind? How To Make A Change In Your Trust
Trusts are gaining popularity as a key component of a complete estate plan and it's easy to see why. Trusts can almost entirely replace the traditional last will and testament and is far superior in the way estate assets are handled. Trusts are actually simple and easy to work with documents and it may help those making estate plans to find out more about how flexible (or inflexible) a particular trust might be, so read on.
What Is a Trust?
The word trust can seem a bit vague but it's really just like a will in many ways. When you want an asset to be included in the trust, you add it by listing the asset on the trust documents. If you want that asset to go to a certain person or organization, you can add that information to the trust as well. Trusts never need to be probated along with other estate assets even if the other assets are mentioned in a will. For example, if you leave the boat to your nephew in the will and also in the trust, the nephew gets the boat as soon as the death certificate becomes available—there is no need to wait for the boat to pass through probate. When you prepare your trust, you will name someone to oversee it after your death—the trustee. Trusts are broken up into two categories and making changes depends on the type of trust you have.
1. Irrevocable Trusts
When you revoke a trust, you make a change. If you want to make changes to an irrevocable trust, you might end up having to do away with it altogether. Irrevocable trusts are not meant to be changed so great care must be used when creating one. If an irrevocable trust can be changed, it will likely require the signatures of all beneficiaries.
2. Revocable Trusts
Just the opposite of irrevocable, these trusts are the most popular due to their flexibility. As life changes happen, you are free to make changes to the trust. For example, you can add assets, remove assets, change beneficiaries around, add conditions to assets, etc. As the grantor, you can make all the changes you like. Neither the trustee or anyone else, however, can make changes after your death. Take care to keep your revocable trust updated since it will stand as written once you pass away.
Speak to an estate planning attorney about creating the right trust based on your particular financial situation and family needs.