Restatement of Trust, or Amendment?

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Query: What is a trust "restatement" and how does it differ from an amendment? When should I restate and when should I amend?

Answer: A restatement is simply a major (often comprehensive) modification of a trust agreement. It is often used when a grantor wants to significantly change the terms of a revocable trust agreement. Some folks consider a restatement to be a "new" trust, although this is a misnomer. A restatement simply operates to re-state each of the terms of a trust agreement from start to finish. It affords the opportunity to substantially alter as many of the trust's provisions as desired and creates a new document to govern the trust relationship. (NOTE, a restatement is NOT a new trust.) The underlying document defining the role of the trustee, the interests of the beneficiaries, and other important provisions may be altered, but the actual trust agreement keeps its same name and the same date. Think of a restatement as a total makeover for your revocable trust - the "old" trust is still there; it's just totally updated to suit the client's needs.

By contrast, an amendment simply changes one or two fairly inconsequential matters. An amendment might be used to change the order of trustees, or to alter some otherwise fairly basic provision. Compared to the restatement's "full makeover," an amendment is basically a manicure or a haircut.

Many practitioners think that a restatement should only be used only when fairly extensive work is needed, such as changing the rights of beneficiaries, or changing many things at one time. They will often use amendments to update simple items such as trustee succession, specific  bequests, and other issues that attorneys think are relatively minor.

But practitioners should also consider the fact that WealthDocs is frequently updated and improved to keep pace with changes in the law, provide new planning opportunities, state issues with clearer language, etc. For this reason, many WealthCounsel members will restate trusts for otherwise "minor" changes, especially for clients whose estate plans are a few years old.

There's really not a "right" answer for when to restate a revocable trust and when to do a simple amendment. The advantages of restating include:

1. When necessary, comprehensively redesigning the client's revocable trust without having to re-title assets (because as noted above, the trust keeps its same name and date); and
2. Ensuring that no matter how apparently significant or insignificant the client's desired change, the updated document takes full advantage of WealthCounsel's continuing "R & D" on WealthDocs language and options.

The advantage of doing a "simple amendment":

1. Using less paper;
2. Making things look easy for the client;
3. ??

Attorneys ultimately need to decide for themselves when to restate and when to amend. Hopefully this provides some information to help guide that process.

Matthew T. McClintock, JD
https://www.wealthcounsel.com/home.aspx