Trust Amendments: When and How to Make Changes

Trusts are key documents in any robust estate plan. A properly structured trust allows you to pass assets directly to your beneficiaries, bypass probate, minimize tax burdens, and dictate the terms of asset distribution. At some point, you may encounter circumstances when you want to change your trust.

The next step is to make a trust amendment. At Pennington Law, PLLC, we can review your situation and recommend your next steps.

Clients choose our law firm for its personable attorneys and innovative, customized estate planning solutions. Whether you need to set up a trust or have us review your existing trust documents, our experienced attorneys will give you honest answers and propose practical solutions to benefit your heirs and provide peace of mind.

Contact us today for answers about amending a trust in Arizona.

What Is a Trust Amendment?

A trust amendment is a legal document used to change the details of an existing trust without creating an entirely new trust document. Amendments can modify a trust in various ways, including updating beneficiaries, changing trustees, or altering asset distribution terms. However, amendments must be drafted and executed properly to be valid.

While trust amendments are suitable for making simple changes, a trust restatement may be a better option if you have complex or multiple changes to make at the same time. A restatement replaces an outdated trust with an updated version rather than adding amendments. Our Arizona trust lawyers can advise on which option fits your situation.

When Should You Amend Your Trust?

As with the rest of your estate plan, you should review and update your trust whenever you experience a significant life event. Some common reasons for amending a trust include:

• Changes in family circumstances – Marriage, divorce, the birth or adoption of a child, or the death of a beneficiary can all impact your trust. Amend your trust whenever you need to add or remove a beneficiary.
• Changes in financial situation – If you acquire new assets, sell significant property, or have other major changes in your financial situation, it may be a good idea to reflect that in your trust.
• Relocation to a new state – Estate planning laws vary by state, so you should always check that your existing plan, including any trusts, adheres to the laws where you reside.
• Changes to goals – Your wishes regarding your assets may change over time, necessitating a trust amendment. For example, you may wish to leave certain assets to a charity rather than your heirs.
• Designating a new trustee – If your trustee is no longer able or willing to serve in their role, you should make an amendment to the trust.

Revocable vs. Irrevocable Trust Amendments

In Arizona, amending a revocable trust can happen anytime as long as the amendment follows the proper procedures and is signed. Irrevocable trusts are intentionally much harder to amend. However, amending an irrevocable trust is still possible as long as you follow the methods laid out by Arizona law.

First, all of the trust’s beneficiaries must agree to the amendment of an irrevocable trust. Then, the court will review the proposed trust amendment and allow it to proceed if it is consistent with the trust’s material purpose.

If any of the beneficiaries reject the suggested amendment, the court may still allow it to proceed if it believes that it is consistent with the material purpose of the trust and that the interests of the beneficiary who rejected the amendment will be adequately protected.

Legal Requirements for Valid Trust Amendments

For a trust amendment to be legally valid in Arizona, it must meet the following trust amendment requirements:

• Compliance with trust terms – If the trust contains a method for the settlor (the person who created the trust) to amend it, the settlor must follow the stated procedure.
• Settlor’s agreement – Amending a trust can be more complex if the trust has more than one settlor. All settlors must agree to the amendment, or it will only apply to the portion of trust assets attributable to the settlor requesting it.
• Proper execution – Trust amendments must be in writing and signed by the settlor or someone acting on their behalf via a power of attorney. Voice or video recordings of amendments are not legally valid.
• Clear and specific language – Any amendment to the trust should be drafted using unambiguous language to avoid confusion. It should clearly state what part of the existing trust document it is amending and specify the change.

How to Amend a Trust in Arizona

Amending a trust in Arizona involves several steps, which our experienced estate planning attorneys can assist you with:

• Review the trust – The first step is to review the trust, identify which parts you wish to amend, and determine whether there are specific amendment procedures you must follow.
• Draft the amendment – Your amendment should clearly outline the changes you wish to make in clear terms. Our lawyers can help you draft the amendment to adhere to Arizona laws.
• Sign the trust amendment – Once your amendment is drafted and you have reviewed it, you must sign it to be valid.
• Inform relevant parties – Notify the trustee and relevant beneficiaries about the changes you made to the trust. This can help avoid confusion or disputes later on. Explain why you made the changes when notifying your beneficiaries so they understand your reasoning.
• Store the trust amendment – Finally, you should securely store the amendment alongside the original trust document. Your attorney and the trustees should also have copies.

If your trust has multiple amendments made over time, it may be beneficial to draft a trust restatement. This will add all of the amendments directly to the trust and make it easier to track which amendments are currently valid.

Contact Arizona Estate Planning Attorneys Today

Need to make changes to your trust’s terms? Contact Pennington Law, PLLC, for a free consultation with one of our experienced Arizona estate planning attorneys. We’ll review your existing trust document, walk you through the process of amending it, and make sure you understand how the changes will affect your overall estate plan.