THE LIVING TRUST NETWORK - ABOUT AMENDMENTS TO TRUSTS

Once a revocable living trust has been established (either by a Declaration of Trust or a Trust Agreement), the Grantor may wish to change one or more of its provisions. The Grantor reserves that right under a revocable living trust, subject to the consent of any third-party trustee(s).

There are two (2) ways to change provisions in a trust instrument. The first is to restate the entire trust instrument with the desired changes incorporated therein. The resulting document is referred to as an "Amendment and Restatement."

The second is to restate just the particular provision or provisions that are to be changed. An amendment made in this manner has no effect on the remainder of the original trust instrument.

While it may seem somewhat redundant to restate the entire trust instrument whenever a minor change is desired, there is a practical reason for doing so. By restating the entire trust instrument each time an amendment is made, the current trust instrument is housed in one document rather than many (i.e., the original and each amendment).

Prior to word processors, it was impractical to restate the entire trust instrument each time an amendment was made. Not only was it a lot of work re-typing the entire document, it also posed a substantial risk that substantive changes would be made inadvertently due to typographical errors, the omission of a paragraph, etc. For these reasons, most people preferred to amend only the desired portion of the instrument, even though it meant having to keep track of one or more amendments.

Today, trust instruments are created by word processors and the original documents are stored electronically. If a change is required, it's a relatively easy task to retrieve the original document electronically, make the necessary changes, then run off a complete document for signature. The risk of altering the text inadvertently is significantly lower and most people prefer to have the entire trust instrument in one document. That's not to say that a simple amendment doesn't have a place in today's electronic age. It's largely a matter of preference on the part of the draftsperson.

It is important to note, too, that, even though a trust instrument is amended in the form of an "Amendment and Restatement," it is still necessary that the original trust instrument and each prior amendment be retained as evidence of the terms of the trust from its original effective date.

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