Estate PlanninG

Should I Make an Amendment to My Estate Plan, or Just Start Over?

Any time a major life event occurs (marriage, divorce, childbirth, death), you’ll probably want to review your estate plan and make sure it’s still in line with your wishes. The same goes for when there are changes to the law.

Let’s take, for example, a revocable living trust. You can make updates to a revocable living trust through an amendment or a complete restatement of the trust agreement. An amendment updates a specific part of the trust, whereas a restatement creates a new set of operating instructions for the entire trust (You might think that an amendment would cost less than a restatement, but that is not necessarily true.)

If you have a will, you can make small changes or updates with a codicil (a separate document). You can also create a new will with new instructions.

Make the Small Changes, or Start Over with a New Document?

Let’s imagine you have a recipe card you’ve used for years. If you’ve crossed out and replaced one or two ingredients, you’ll probably still be able to read it. But if you’ve altered the ingredients many times, it’ll probably be hard to follow the recipe. If someone else reading the card can’t decide if it’s a cup of salt or sugar they should be adding - well, there’s a 50/50 chance of having a great dish or a complete disaster.

The same can be said about a will or revocable living trust. Making one or two changes to a document is generally acceptable, but when revisions are numerous or comprehensive, your instructions may become confusing. The primary reason for confusion is that the old document and any new documents must be read together to understand the full instructions. For this reason, starting over with a new will or a complete restatement may serve you better.

Although codicils and amendments are generally used to make small changes and new wills or restatements are used for large ones, there is no bright-line rule for making changes to your will or trust. A general guideline is that anytime you are making more than two changes, creating a new will or restatement is probably better because it:

  • fosters ease of understanding and administration;
  • tends to avoid ambiguity;
  • reduces the amount of paperwork to retain and provide to financial institutions or parties;
  • decreases the risk of misplacement;
  • prevents beneficiaries from discovering prior terms; and
  • provides an opportunity to include other relevant updates, such as changes in the law.

In many cases, a restatement may be even more cost-effective than amendments. This is especially true today because computer software allows estate planning attorneys to easily and efficiently create and retain documents. Fortunately, you pay for legal counseling, not typing.

We have answers to your estate planning questions

Before you decide whether to make a small change or create a new will or a trust restatement, it’s important to determine whether previous changes have inadvertently altered your intent or might adversely affect the will or trust’s administration. We will help make your instructions clear.

Whatever your circumstances, rest assured that we can help you determine the best way to update your will or trust. Call Santaella Legal Group, serving all of California, at (925) 831-4840.