Philip M Hawes, Esq

Philip M Hawes
Attorney & Counselor

The process: planning, tools and technique . . . .

Changing Trusts and Trustees

You are likely to make two types of changes involving your trust over your lifetime:
1. Changing the terms of the trust itself. 2. Changing trustees.

Changing Your Trustee. Your trust should name who you prefer to serve as your Successor Trustee. You will not serve as your own Trustee forever. You may become too incapacitated later in life to be able to responsibly manage your own finances, whether temporarily or permanently. And, of course, someone needs to step in following your death to carry out the ultimate terms of your trust.

I will encourage you to name as many individuals in the order of priority you prefer who will serve as Successor Trustees. I explain that you may not have the competence to name these persons later on at the time they are needed. Most often the client will provide me with 2-3 names. It is my preference to have your trust state that, in the unlikely event that none of your nominees is able and willing when needed, then your first priority nominee who is able to do so may nominate the Successor Trustee. This leaves the choice in the hands of someone you trust. I like this method better than leaving the choice to your beneficiaries as a group or the probate judge if they cannot agree.

You will need to amend your trust to add, remove and/or rearrange the names of your nominees to serve as Successor Trustee. The amendment procedure is the same as described above for changing or addition terms to your trust.

When the time comes for you to step down or be replaced as Trustee of your Trust, that change needs to be properly documented so that your Successor Trustee is equipped to take over and carry on in your place. The documentation of this event usually is made in the form of a notarized statement or affidavit. The document itself will recite the basis for the change, the fact that the Successor Trustee is the person named next in priority to serve, and that he or she accepts the job.

If you are capable and making the change on your own, both you and the Successor Trustee will be executing the document. If the change occurs due to your incapacity, then the Successor Trustee will be executing the document alone and provide proper medical certification that you are not able to continue as a Trustee. When the change occurs by reason of your death, then we usually will attach a certified copy of your Death Certificate to document the reason for the change in Trustees.

The formality of this transition document depends in part on the purposes it will serve. If, for example, you own real estate and have changed title into your name as Trustee of your Trust, the Successor Trustee will need to make a record of the change in Trustees, the documentation of the change will need to be recorded. In that case, the form of an affidavit should be used as proper evidence of the facts stated.

Amending Your Trust. You may need or want to make alterations or amendments to the terms of your trust due to changes in your intentions, who your beneficiaries will be, and/or how you will provide for them after your death.

You may change your mind about who will receive your estate following your death. You may wish to change the persons who will act as successor trustees. There are many reasons to make changes, and some where the change may not be necessary.

For example, I am often asked to amend a trust to include the name of a new descendant, mostly grandchildren. If your trust leaves your estate to your children and to the issue of any child who does not survive you, the names of grandchildren and later descendants are not legally important because we will determine the “issue of a predeceased child” at the time the distribution after your death or at the time the distribution will be made. We will know who definitively who makes of the class of “surviving issue” at that time. I understand from a grandparent’s perspective that it is uncomfortable to omit the name of a grandchild who might inherit. This is not a legal issue, but one the lawyer must take seriously nonetheless.

The Amendment. Amending a trust requires some formality. The amending document should reference the original trust and your authority to change it, then list the changes themselves (perhaps revoking a paragraph, a sentence, or a name), then confirm that the unchanged parts of the original trust remain in force. I prefer that your signature on the amending document be notarized. The trustee’s signature indicating he or she accepts the trust as altered and will continue to serve as trustee need not be notarized in most cases.

Republish Your Will. Each time you amend your trust, you should update your Will. The pour-over Will you made with your original trust only refers to the trust as it existed at the time the Will was signed. To bring your Will up to date, you must “re-publish” it. This means you at least make a codicil confirming that all references to your trust in the Will include all changes you have made to the trust up to the time the Codicil is signed. Unless you are also making changes to your Will, all you need is a 1-page Codicil with the republication wording.