Creating a trust can be an excellent addition to your estate plan. A trust frequently offers tax advantages, assists in the avoidance of probate and allow you, as the grantor of the trust, to retain a significant amount of control over the assets used to fund the trust even after they have been designated as trust property simply through the trust terms you create. What happens, however, if you decide you want to amend one of the trust terms?
Whether or not you can amend or modify a trust depends largely on the type of trust you created. Trusts fall into two broad categories — revocable and irrevocable. Not surprisingly, a revocable trust can typically be changed rather easily while an irrevocable trust may not be able to be changed at all.
State laws determine whether or not a trust can be amended and how an amended must be effectuated; however, there are similarities among the states. As a general rule, modifying or amending an irrevocable trust requires court approval. It can, in some cases, be accomplished, but if you create an irrevocable trust you should consider it unchangeable once created.
A revocable trust, on the other hand, is generally easier to amend than a Last Will and Testament. Again, state laws may vary, but amending a revocable trust often only requires the grantor to put the amendment in writing and attach it to the original trust document. The changes must be clearly labeled as amendments and signed by the grantor. Executing the amendment in front of a notary public is usually a good idea