How to Change a Living Trust After the First Spouse's Death

By Anna Assad

If you and your spouse created a revocable living trust, you can change all or part of the trust after your spouse's death. A traditional living trust allows you to change the terms by creating an amendment or making a new trust agreement. If you have an "A-B" trust, your trust splits in two at your spouse's death and you can't change your spouse's part of the trust. Your part is the survivor's trust and your spouse's part is the bypass trust. Your original trust agreement already contains the terms for both the survivor's trust and the bypass trust. You can change the survivor's trust as you would a traditional living trust until your death.

Reviewing the Original Trust

If you have a traditional trust, you need to review your original living trust agreement before you move to change it. Your spouse's death will change the way the trust's assets are distributed upon your death if your spouse was a beneficiary. You'll also need to decide who you want to name as a successor trustee if your spouse was one of the successors in the original agreement. To keep distributions fair and balanced, you'll want to make a list of the trust assets, current distribution percentages and beneficiaries under the trust. You can use the list to create a new distribution plan for your amended or new trust. If you have an A-B trust, you'll need to split the trust into two trusts. Since A-B trust transfers are complex, you may need the help of an attorney. You'll need to review the part of the original trust agreement that contains the terms for your survivor's trust.

Amendment

If you're only making a few changes to a traditional trust or your survivor's trust, an amendment may suffice. Laws regarding trust amendments vary by state, but you usually must create a separate document that recites the trust sections you''re changing and gives the new terms, word for word. You'll also need to reference the trust agreement--for example, by citing the trust's name and execution date--and sign and date the amendment. Your state may not require notarization, but having your signature notarized on the amendment might avoid questions about your signature later.

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New Agreement

If you have to change large sections of a traditional trust because of your spouse's death, you may need to create a new trust agreement. You'll also need a new trust agreement for your survivor's trust if you decide to change large sections of it. Large amendments may get confusing and raise questions about your intentions after your death. Having to make an extensive amendment also increases the possibility of mistakes in the new terms. If you prepared the trust yourself and feel comfortable with it, you can prepare a new trust and destroy the original one. Consider having the new trust reviewed by an attorney to make sure it's correct. If you're going to have the trust prepared for you, bring the original agreement and your trust asset and beneficiary list to your meeting with the drafter.

Considerations

You don't need to replace your spouse as trustee if she was co-trustee with you on a traditional trust. You can be the only trustee on a traditional trust or your survivor's trust, but you must name successor trustees so there are people who can manage the trust after your death. If your original trust agreement named you as the trustee on your spouse's bypass trust, you'll serve as the trustee on that trust as well.

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What Are the Rules for Changing a Living Trust After a Spouse Dies?
 

References

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