Revocable living trusts form an essential part of many estate plans. This type of trust can help avoid probate and protect the grantor’s privacy. Furthermore, it offers higher flexibility compared to an irrevocable living trust.
What happens if the grantor (the trust creator) needs to make changes to an existing revocable living trust? Jackie Bedard, founding attorney of Carolina Family Estate Planning in Cary, North Carolina, explains the legal aspects of altering a revocable living trust in North Carolina.
How Revocable Living Trusts Work
When an estate owner (the “grantor”) sets up a revocable living trust, they can transfer their personal assets to the trust’s ownership during their lifetime. Most grantors appoint themselves as the initial trustee to retain complete control of their property while also naming a successor trustee to take over trust management after their death.
A revocable living trust gives the grantor more power to decide what happens with their property after they die and usually allows beneficiaries to avoid probate.
Although the trust becomes the legal owner of the grantor’s assets, the grantor can continue using them just as they did before setting up the trust, such as living in their home and drawing money from the bank accounts. [It’s important to note that some assets, like IRAs (individual retirement accounts), should not be transferred to a revocable living trust. Consult with your trust attorney for more guidance.]
Why Would a Grantor Need to Change a Living Trust?
For multiple reasons, a grantor may need to change a revocable living trust, often involving shifts in family situations or financial circumstances. For example, the trust creator may wish to:
- Change designated beneficiaries after a death, marriage, or divorce in the family
- Add new children or grandchildren as beneficiaries
- Adding protections for children or grandchildren due to changing family circumstances, such as protection from a future divorce, substance abuse, financial immaturity, or similar
- Add newly acquired assets to a trust
- Name a different successor trustee
- Amend the trust to conform to new laws, such as tax law changes
- If the grantor moves to a new state, the trust may need to be amended to operate correctly under the laws of the new state
Many conditions could call for changing a revocable living trust. A trust and estate attorney can guide you on appropriate trust amendment steps.
Revocable Trust Amendment vs. Restatement
The grantor or an individual that the grantor has authorized may change a revocable living trust either by amending the trust document or restating it entirely. An amendment changes a specific clause or several clauses in the trust document, while a restatement includes a complete revision of the trust terms.
Choosing whether to amend or restate a trust depends on the extent of the required changes. For minor changes, a trust amendment may be sufficient. However, for more extensive revisions, or if you’ve made numerous amendments over time, then a restatement may work better to keep the document clear and concise.
Who Can Change a Revocable Living Trust?
Under North Carolina law, the trust creator can grant power of attorney (POA) to an agent to manage a revocable trust on the grantor’s behalf. Such powers may include granting the agent the authority to amend, restate, or revoke the trust and create a new revocable trust in the grantor’s name.
Can a Revocable Trust Be Changed After the Grantor’s Death?
Most revocable living trusts become irrevocable after the trust creator dies. However, in some instances, the creator of the trust may authorize certain individuals to make changes to their trust. For example, many married couples authorize their surviving spouse to make specific changes to the trust after the death of one spouse.
How an Experienced Estate Attorney Can Help Manage a Revocable Trust
North Carolina law does not require grantor trustees to use an attorney for amending a revocable living trust. However, working with a knowledgeable estate attorney on trust amendments can save time and ensure that any new changes adhere to the state’s legal requirements.
Apart from setting up, amending, or restating trusts, an estate attorney can help you create a comprehensive estate plan. Typically, estate planning includes:
- Drafting legal documents like wills and trusts
- Creating a durable power of attorney
- Building a long-term care plan that protects your assets
- Working to minimize estate or inheritance taxes
- Setting up guardianship arrangements for minor children or disabled adults in your care
Carolina Family Estate Planning has helped many clients across North Carolina achieve peace of mind and financial security through timely estate planning. Our professionalism and dedication to our clients’ needs set us apart from other local estate planning law firms.
Carolina Family Estate Planning: Your Estate Planning Attorney in Cary, North Carolina
Founder and attorney Jackie Bedard and the experienced legal team at Carolina Family Estate Planning can help you create a comprehensive estate plan, from solid asset protection to long-term care planning. At Carolina Family Estate Planning, we help families build better lives by planning for a secure future via estate planning, asset protection, and long-term care planning. Call us today at 919-443-3035 to schedule a needs assessment call. We’re here to help.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.