How to Correct an Executed Trust

In an executed trust the trustee is not required to do anything but manage and execute the property for the benefit of the beneficiaries. When a grantor or a trust maker creates an executed trust, no further documentation is required for the trust to go into effect. Executed trusts can be corrected or amended by the trust maker when he wants to add or change beneficiaries or trustees or if he wants to add or remove property under the trust.

Instructions

1. Write a Trust Amendment in consultation with your attorney to indicate the corrections being made to the trust. As a grantor you can make modifications to the trust without beneficiary or trustee consent if the trust is revocable. The Trust Amendment is a legal document that indicates minor changes and outlines any beneficiaries, trustee or property that has been added or deleted from the original trust.

2. Leave the trust name and the date the same way they were in the old version of the trust. You do not have to change the title deeds if those entitled to the assets have been clearly noted in the trust. It is not mandatory to inform financial institutions about the corrections made to the trust.

3. Indicate on the title of the trust that the original trust is being corrected. This serves to distinguish it from the new version. In the trust's introduction provide a brief history of the trust: when it was created, the grantors and whether the trust was previously amended. This will ensure that the properties in the old trust do not need to be re-titled.

4. Ask your attorney to create a trust restatement if you want to make major corrections to the original trust. A restatement changes the whole trust or most of it due to reasons such as changes in the family situation or new laws. Ensure that all old and new properties are in fact included in the restated trust. Indicate that the new corrected trust supersedes the older version. Sign and date it.

5. Consult with the trustee and beneficiaries if you want to correct an irrevocable executed trust. To correct an irrevocable trust, the trustees and beneficiaries are required to give consent to correct the trust after which they sign the restated or amended trust. Recent trusts are generally flexible because they allow for correction or termination if the trust is not serving the needs of the family.

6. Petition a state court judge if the trustee and beneficiaries do not offer consent to correct the trust. Convince the judge that the corrections are necessary in the implementation of the trust. Grounds for correcting trusts include changes in family situation, addition or removal of property, change of trustee or beneficiaries or outdated laws.

Tips & Warnings

• Always go over your will or trust with your lawyer or other professional advisors every three to five years.

• To correct an executed trust after the grantor has died, beneficiaries can petition a court to consider changing the terms of the trust in a way that serve the interests of the beneficiaries.

References

• Standard Legal: Can a Surviving Grantor Parent Change the Terms of a Trust on Which Our Entire Family Has Agreed?
• FindLaw: Amending a Trust
• The Magazine of Santa Clarita: Restatement of a Living Trust; Jane M.McNamara; Wednesday 30 April 2008
• Palm Beach Daily News: Amending Irrevocable Trusts; By Rebecca G. Doane, and Randell C. Doane; Sunday January 11, 2009 p. 3 and 4