The Power to Amend a Trust Deed
Three parties are involved in a trust: a trust grantor, a successor trustee and a beneficiary. A trust grantor is a person who establishes a trust. In most cases, a trust grantor establishes a trust to pass property onto children. Because trust property is distributed after a trust grantor's death, the trust grantor must appoint a trustworthy individual to manage the trust and distribute trust property according to a trust deed. The individual who benefits from a trust is the beneficiary. A trust is not effective until a trust grantor funds a trust with assets.
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Identification
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Technically speaking, only a revocable trust can be revoked or altered once created. A trust grantor of a revocable trust can revoke or modify a trust deed at any time during his lifetime. The successor trustee of an irrevocable trust also possesses the power to make modifications to a trust deed. However, such changes must be executed during the trust grantor's lifetime.
While an irrevocable trust is considered fixed once created, it can, in some instances, be revoked. For example, if the beneficiaries of an irrevocable trust permit the trust grantor to modify the original trust deed, the trust can be revoked. Under no circumstances does a beneficiary have the power to revoke a revocable or irrevocable trust.
Power to Make Minor Changes
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A trust grantor or successor trustee may amend a trust deed when a minor correction is required. For example, to amend a beneficiary's date of birth, a trust grantor can fill out an amendment form and attach it to the original trust deed. The trust grantor must sign and date the form in front of two witnesses and have it notarized by a notary public. The form attaches to the original trust deed.
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Power to Make Major Changes
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Major changes to a trust -- like the hiring of a new successor trustee -- warrant the use of a restatement document. A restatement is an instrument that documents significant changes to an original trust deed. For a restatement to be effective, both a trust grantor and a successor trustee must sign and date the instrument in front of two witnesses. A notary public must notarize the instrument before it is attached to the original trust deed.
Power to Offer Supplemental Instruction
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Only a trust grantor has the power to offer supplemental instruction to a successor trustee regarding the distribution of assets. A supplemental instruction document does not attach to an original trust deed like an amendment form or restatement document. It should, however, be kept in a trust portfolio. The trust grantor must sign, date and notarize the document.
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