Home » Blog » What is a Restatement of Trust in California?
What is a Restatement of Trust in California? - Werner Law

What is a Restatement of Trust in California?

Troy Werner and his family

Written by Troy Werner

Troy Werner has been an indispensable asset to The Werner Law Firm since joining in 2009, providing exceptional legal service to its clients.

Get To Know Troy!
POSTED ON: March 15, 2022

Trusts are powerful and versatile legal entities, allowing for asset protection, the elimination of conflicts of interest, minimizing tax liabilities, and the quick distribution of wealth before and after death. Yet to perform any of these functions, trusts must be written and managed in a certain way. There is a lot that goes into developing […]

Trusts are powerful and versatile legal entities, allowing for asset protection, the elimination of conflicts of interest, minimizing tax liabilities, and the quick distribution of wealth before and after death.

Yet to perform any of these functions, trusts must be written and managed in a certain way. There is a lot that goes into developing and creating a trust to suit any given person’s individual needs and circumstances. Those needs and circumstances change over time.

Therefore, trusts are often amended. Trust amendments can help change provisions within the trust, remove or add beneficiaries, or alter trusts according to your changes in thinking over the years.

But when a trust begins to resemble its original form very little, it may be time to do more than simply amend it. A restatement of trust aims to re-establish a living trust with a complete revision, effectively rewriting the trust, and rendering its old version obsolete.

So, when is a restatement needed over an amendment? And when can trusts be restated or amended? To know this, we need to take a closer look at how trusts work, and how individual amendments are prepared.

Understanding Living Trusts

A living trust, as opposed to a testamentary trust, is one created while the testator or grantor of the trust is still alive. Testamentary trusts are created upon death, and there is no way to amend them based on the testator’s wishes. Therefore, most trusts being amended or restated will be living ones.

Trusts themselves require three parties. The creator of the trust is the grantor or trustor. The person inheriting the trust’s contents or receiving income through it is the beneficiary. The party managing the trust on behalf of the trustor and beneficiary is the trustee.

The document cementing these roles and the purpose of the trust is the trust document. This document will outline the way the trust must be managed and may include certain provisions, such as requiring the beneficiary to fulfill certain expectations before receiving their share of the trust.

Living trusts are revocable or irrevocable. Revocable trusts are amendable, while irrevocable trusts are final. The main difference is that a revocable trust does nothing to change your estate’s tax obligations, and while you fund property into your revocable trust to be managed for your beneficiaries, that property remains in your control until you die. Irrevocable trusts cut you off from the property funded into them, protecting these assets at the cost of control.

All trusts can be written to disburse their contents not only upon death but also upon incapacity. This allows you to provide an inheritance to your loved ones after a serious accident in a way a will would not, for example.

In addition, the quality of being invoked and managed while the grantor is still alive sets trusts apart from wills and is what makes them more difficult and expensive to manage. Trusts can be set up to begin managing assets and paying out income for years before the grantor’s death. A will, on the other hand, changes nothing about the way property is held or managed.

That expense can be well worth it when you consider what a trust can do for your estate. Trusts are far more versatile and flexible than wills, allowing you to withhold an inheritance from spendthrift dependents or immature beneficiaries until certain milestones are met, or manage wealth and provide a steady income for a disabled loved one.

Funding and Amending a Revocable Trust

Once a trust document is completed, witnessed, signed, and notarized, it must also be funded with the assets listed upon the trust. It usually is not enough to simply state each asset on the trust itself. As a grantor, you must amend the ownership documents for each asset or property named in the trust to finalize the transfer. This means writing trust deeds and amending certain documents.

In much the same way, a trust can also be amended. If your wishes or priorities change over time, you must create an amendment to reflect these wishes. Things you can do with a trust amendment include:

  • Adding or removing assets and bequeathments.
  • Altering a beneficiary’s name due to marriage or divorce.
  • Changing the trustee or adding a successor trustee.

These changes must be signed and submitted much the same way the original trust document was created. Once submitted, they become part of the original document, like a grafted plant.

Amending vs. Restating a Trust

Too many amendments can begin to muddy the waters, complicating the trust, and making it difficult for a trustee to do their job. As you change the contents of the trust and amend the beneficiaries attached to it, a trustee may begin to lose track of your changes or may be bogged down by an unnecessarily complex list of changes over the years.

When an amended trust document scarcely resembles the original intent of the trust, or when you stand at the cusp of a total overhaul of your trust, it is easier and smarter to simply retool the entirety of the trust document through a complete restatement of trust.

A restatement of trust is equal to revoking and recreating the trust from scratch. A completely new document takes its place.

When Do You Need a Restatement of Trust in California?

You may want to consider a restatement of trust when you feel the need to change the trust’s contents, intent, trustee, and beneficiary at the same time, or at least wish to completely recontextualize the trust’s purpose.

Perhaps you no longer feel like your beneficiaries need a trust that holds their inheritance until they’ve fulfilled a certain task, or you’ve changed your mind about who gets what, to the point that your newly proposed changes barely resemble the original.

One of the benefits of simply restating a trust over revoking and creating a newly named trust is that you need not alter any ownership documents for assets already funded into the old trust, as you are not changing the trust’s name. You do, of course, need to fund new assets into your trust if adding assets is part of your restatement of trust. Similarly, assets taken out of your trust will need to be amended accordingly.

What About Irrevocable Living Trusts?

Irrevocable living trusts cannot be amended or restated without invoking the powers of a third-party trust protector, or the judge of a court. If you wish to redo an irrevocable trust, you must typically have it terminated first.

A trust can be a substantially powerful tool for your estate plan. But that tool becomes a burden if it no longer aligns with your wishes. Be sure to revisit and revise your plan every few years, to ensure that it coincides with what you want for yourself and your loved ones.

CONTACT US TODAY!

Share This Post

Why Our Living Trust Law Firm & Probate Attorneys?

Founded in 1975 by L. Rob Werner and serving California for over 48 years, our dedicated attorneys are available for clients, friends, and family members to receive the legal help they need and deserve. You can trust in our experience and reputation to help navigate you through your unique legal matters.

Whether you need help creating a living trust or navigating probate, our living trust law firm's compassionate team of estate planning lawyers and probate lawyers are here to help you and ready to answer your questions.

Our goal is to make your case as easy as possible for you. Hiring a lawyer can be a daunting task, but it doesn’t have to be. From the moment you contact our firm, through the final resolution of your case, our goal is to make the process easy and understandable. We cannot change the fact that probate is a long and complicated process, but through our Werner Law Firm Difference, we strive to go out of our way to keep you informed of your case through every step of the way. We are constantly refining our processes and procedures for a more streamlined and calm client experience. Our goal is to have you feel like a burden was lifted from your shoulders, and that we made the whole process an easy one

If you're dealing with a legal matter, we urge you to schedule a free initial appointment today and join the many satisfied clients who have contacted Werner Law Firm.

Book an Initial Call Now

Join Our eNewsletter and our California Estate Planning and Probate Blog Digest

Werner Law Firm logo
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. See full disclaimer here.
Santa Clarita, CA Office

27433 Tourney Rd, Suite 200
Santa Clarita, California 91355

DIRECTIONS
Los Angeles, CA Office

445 S. Figueroa St., Suite 3100
Los Angeles, California 90071

DIRECTIONS
Bakersfield, CA Office

4900 California Ave, Tower B-210
Bakersfield, California 93309

DIRECTIONS
Newport Beach, CA Office

23 Corporate Plaza Dr., Suite 150
Newport Beach, California 92660

DIRECTIONS
Lancaster, CA Office

626 W Lancaster Blvd.,
Lancaster, California 93534

DIRECTIONS
Pasadena, CA Office

35 North Lake Avenue, Suite 710
Pasadena, California 91101

DIRECTIONS
Simi Valley, CA Office

2655 First St, Suite 250
Simi Valley, CA Office, California 93065

DIRECTIONS
Encino, CA Office

15760 Ventura Blvd, Suite 700
Encino, California 91436

DIRECTIONS
Oxnard, CA Office

300 E Esplanade Dr., 9th Floor
Oxnard, California 93036

DIRECTIONS
Santa Barbara, CA Office

7 W. Figueroa St., Suite 200
Santa Barbara, California 93101

DIRECTIONS
IMS - Estate Planning and Elder Law Practice Growth Advisors
Powered by