The estate planning process is a continuous and ongoing process as one progresses in life. Often times, significant life events prompt many to amend or even restate their estate planning documents.

These events include divorce, illness, disability, death of a spouse, having additional children, children becoming adults, adding or removing beneficiaries, and even disputes that may arise between family and friends. 

Updating one’s estate planning documents may involve changes to one’s trust, will, durable power of attorney, or advance healthcare directive. In order for the changes to be effective such updates must be done correctly. Incorrect updates may result in frustration, disappointment, and potential unnecessary lawsuits. 

What is an Estate Planning Amendment?

An estate planning amendment is made when one revises a term or terms of an estate planning document. A trust amendment allows one to keep their documents current, while carefully updating their documents to reflect their current life circumstances and most up to date wishes.

Overall, an amendment serves as a sort of patch to your estate planning documents. In order to understand the amendments made, one must read the original document and then understand how the updates or changes made in the amendment affect such original document. Both documents, the original and the amendment, must be kept so long as the original document remains in effect.

An amendment is appropriate when one has minimal or minor changes. For example, amendments can be made when updating a successor trustee, updating a beneficiaries’ information, or even simply rewording a certain provision to clear up ambiguity. Typically, if one wishes to minorly update a trust, an amendment will suffice. However, if one wishes to make more major updates or even update other estate planning documents such as a will, it may be beneficial to restate the entire document. 

How to Make an Amendment?

Granted an individual seeks to amend their estate planning documents, it is important to note one cannot simply cross out existing language and insert replacement language absent any signatures. Certain formal steps and procedures must be followed in order for amendments to be made correctly and effectively.

The amendment process begins with carefully reviewing the existing trust document and ensuring you have a clear understanding of the changes you want to make. It’s essential to know the specific sections or provisions that need to be amended. When it comes to a trust specifically, it can be amended or revoked in one of two ways. The trust itself may contain language or a provision that lays out how to change or revoke it. If that’s the case, you must adhere to those directives.

However, if no such language exists, you will have to draft an amendment document clearly outlining and stating the changes you want to make to the trust. The amendments should be specific and precise. Further, they should include any necessary legal language to ensure the amendments are legally binding. 

Overall, the process of making changes to estate planning documents can range from super simple to extremely complex. The difficulty of the necessary updates will help guide one as to whether amendments will suffice. 

What is Restatement and How is it Different from an Amendment?

Under certain circumstances, changes to estate planning documents may be so extensive the entire document is rewritten. This is commonly known as restatement. Meaning, restatement is appropriate when one seeks to make extensive changes to their estate planning documents. For example, restatement may be necessary when one wishes to change the way beneficiaries receive their inheritance, when one’s overall goals have changed, when multiple overlapping amendments exists, or when the document has numerous inadequacies that require corrections.

Essentially, restatement completely replaces all provisions of the original document. In choosing to do a restatement over an amendment, all prior documents become obsolete, and the new document becomes the governing document. Therefore, a restatement is a complete amendment to your estate planning document. With regard to a trust restatement specifically, the framework of the trust remains intact (the name of the trust, the original date of the trust, the original grantors of the trust), but the body is completely removed and rewritten to comport with the way one seeks to have their trust written now.

While restatement is typically used to make significant changes to an estate planning document, it can also be used to consolidate several amendments that have been made over time. Doing so helps simplify the process for a successor trustee down the road, as they will no longer have to follow and manage multiple amending documents. Another reason one may choose restatement over amendments includes updating documents to better comply with changes in state laws. 

Restatement and Removing a Beneficiary

One may specifically want to consider restatement as opposed to an amendment when they wish to remove a beneficiary. The following suggestion stems from the fact that when one passes away, all estate planning documents must be given to all beneficiaries. Therefore, if your trust is solely amended, all amendments, together with the original trust, must be available to all beneficiaries. 

For example, let’s say there has been a significant change in circumstance and you no longer wish to include your friend, Joe, in your trust as a beneficiary. If you solely remove Joe from your trust via amendment, when you die Joe will still receive a copy of the original trust, as this document does include Joe as a beneficiary. Moreover, Joe will also receive a copy of the amending document in which you removed him from your trust as well. However, if your trust is restated rather than amended, the restated trust supersedes the prior trust and any amendments made.

Therefore, Joe would not receive any of the trust documents as he is not included anywhere in the new restated trust. Overall, many will see this as beneficial because the restatement will prevent a full-on display of changes made over the years.

Fully Restating Versus Making an Amendment

Consulting with an experienced estate planning attorney can help you determine whether fully restating an estate planning document or making an amendment is most beneficial for your unique situation. Neither restatements nor amendments are necessarily better than the other. However, it is vital one hires an estate planning expert to help ensure details and legal nuances are taken care of in determining which route best suits your needs and goals. 

Factors for yourself and your attorney to consider in making the following determination may include:

1. Analyzing how many aspects of the trust will be impacted;
2. Looking at how many current amendments are already in effect;
3. Determining whether serious time constraints exist; 
4. Considering whether the update necessary raises a sensitive issue; and
5. Conducting a cost/benefit analysis of amending versus restating.

Common Mistakes to Avoid

• Procrastinating updating estate planning documents:

Life, finances, and relationships are constantly changing. It is essential your estate plan stays current to reflect those changes and consider the impact those changes have on your wishes. Procrastinating may lead to one passing away or becoming incapacitated prior to being able to carry out their estate planning desires. More importantly, procrastinating can result in overall loss to those you care about most.

• Updating estate planning documents, but forgetting to update ancillary documents: 

Often times, individuals are most concerned about updating their wills and trusts without taking the time to update their advance healthcare directive or powers of attorney. It is just as vital these documents also be updated to ensure addresses, phone numbers, or even the agents themselves have the most up to date information listed throughout. Some common updates to the following documents include updating your health care agent or even potential backups and updating wishes relating to your health care – life support, pain relief, etc.

• Too many amendments and the potential for ambiguity:

As stated, an amendment is like a patch. However, when one continuously patches up their trust specifically, it leaves room for serious vagueness and ambiguity. Having a multitude of amendments may become confusing and may even take hours to decipher what the grantor’s intent truly was. 

Therefore, it is important to consider the potential benefits of restatement when one has more than a few minor changes. Potential benefits may include ease of understanding, avoiding ambiguity, and decreasing the risk of document misplacement. While a restatement may seem more time consuming and costly, it may actually be more cost effective than amendments in the long run.

In Summary

Updating your estate planning documents is a vital aspect of the overall estate planning process. The following process deserves the same level of careful consideration involved in creating the original documents themselves. 

If you need help or assistance updating any estate planning document, the qualified staff here at Minella Law Group can assist you. For more information or to schedule a consultation call us at (619) 289-7948. We look forward to ensuring all your documents are effective and your wishes are reflected absent any ambiguity.