ProTip:
A restatement will NOT change the following:
Name of the trust
Tax identification number
Execution/start date
The document's original trustors/grantors.
A restatement is NOT meant to combine multiple trusts.
i.e., Newly married couples looking to combine their individual trusts that were completed before they married.
Clients will need to complete/execute a new trust. They will also need to update their beneficiary designations and the ownership of any assets held by old (now invalid) trusts. The good news is that pricing for the new trust is the same for individual, couples, and domestic partnerships.
When clients opt for a trust-based estate plan, they have a few things in mind. Comprehensive documents that avoid probate are private and move smoothly through events like incapacitation and death. They also select this estate plan type for its ability to be altered. It is not set in stone like an irrevocable trust. It is amendable. However, amendments aren’t always best suited to accomplish the mission.
At Encore, we do not do amendments for documents that were created by others. We will do a restatement at our current rates. We will do amendments on documents we drafted.
While an amendment will accomplish the primary task of modifying beneficiaries, successor trustees, guardians, etc., too many amendments can become a source of confusion that leads to contention.
Consider this: if a client created a trust 30 years ago and amended it several times, the original trust and all of the amendments are now a series of documents. It's a trail of information and changes left for others to see. These documents could be the catalyst for infighting amongst current and former heirs and beneficiaries, which could result in someone contesting the trust. Key parties now see the changes you've made and when you made them, often without an explanation for the timing or purpose of these changes. Therefore, when you encounter a trust-based estate plan with multiple amendments or someone seeking to make significant changes, it might be best to do a restatement. The restatement won’t change the original name of the trust or the tax identification. It also retains the original start date and Trustor/Grantor. But everything else is rewritten.
Your client may prompt the choice to do this, or you may recognize the need. We suggest starting with an Estate Plan Summary at Encore.
Neither an amendment nor a restatement is better than the other. There are just best-case scenarios for using each. Eventually, your beneficiaries are entitled to receive a copy of the complete trust.
What they receive may look like one of the lines below:
the original trust and amendments
the restated trust
the restated trust and amendments
It is best to avoid potential sources of conflict when possible. Please ask questions if you feel a restatement is best for your client(s). We are here to help.