Similar to a will, a living trust is a legal document that makes clear your intentions and allows the distribution of your assets after you die. Unlike a will, a living trust places all of your assets within the trust for your benefit throughout your lifetime. This can include such assets as bank accounts, retirement accounts, real estate, vehicles, personal property, and life insurance policies.
Benefits of a Living Trust
The main benefit of a living trust is the ability to avoid probate court in the event of death or incapacitation. With a properly executed living trust, a successor trustee is named who would act on your behalf in regards to all financial issues, settling of debts, and even the managing of property of business actions. Unlike a will, a trust acts on your behalf even while you’re still alive avoiding any lengthy legal processes to free up and transfer assets.
Probate costs vary by state, but in Georgia, the average probate fees can be anywhere from 3-5% (or higher) of the estate. Generally, the larger the estate, the larger the costs and the longer the timeline to settle.
Before you can change a living trust, you need to review and understand what type of trust was initially created. If you created an irrevocable trust, it can be very difficult as it was set up to be permanent. The good news? Most people create a revocable trust which is designed to be flexible throughout a lifetime allowing changes, updates, or even deletion.
Reasons to Change a Living Trust
Since a living trust is designed to be carried throughout your lifetime, it’s often inevitable that changes may occur requiring you to update. You might decide to change the beneficiaries or how assets in the trust are distributed. You may want to change your trustee or successor trustee based on current relationships. Common situations that may lead someone to amend their trust include:
- Birth of a Child or Grandchild
- Move to Another State
- Change in Financial Situation
- Death of a Beneficiary
- New Tax Laws
How to Change a Living Trust
The easiest way to make a change to a living trust is through a trust amendment form. This document allows you to make simple or quick changes to an existing trust while still keeping the original living trust active.
When making changes to a living trust, it is important to be very clear about which section is being altered and how. Be sure to indicate the original trust document and paragraph number as well as a statement of the amendment. If this is not the first change you’ve made to the trust, be sure to state that on the form along with the dates and other changes made. This form must be signed and notarized to create a valid change.
Another way to change a living trust is through a trust restatement. Essentially, a restatement is a complete revision of the entire trust. This is the direction you’ll need to take if making numerous changes to the trust.
However, it’s rarely a good idea to revoke the entire trust and re-start. Assets can be (and are often) forgotten in the transfer process.
If you need to make changes to a living trust, it’s in your best interest to contact an estate planning attorney to ensure it’s properly handled. If you have not created a living trust yet or are looking to amend your current Georgia trust, the estate planning attorneys at Smith Barid can help. Contact us today for more information.