Puzzle Pieces: What documents control your California Trust?

trust

Trust restatements allow a Settlor to replace the terms of a Trust without having to create a new Trust and transfer the title of all assets to the new Trust. In fact, it is the titling of assets that makes a restatement a much better approach in most cases.

Restatements are used only when the entire Trust document needs to be replaced. If you only have a few small changes, than a Trust amendment will do. And there can be amendments made to a Trust after a restatement is completed. But what happens when a Trust restatement is found to be invalid, but amendments were made to the Trust after the date of the restatement? In other words, do amendment to a Trust restatement still apply if the restatements fails?

The answer is maybe. It all boils down to intent and the language used in the various Trust amendments. Both Trust creation and Trust amendment require an intent to create or change a Trust. When an amendment is created, it can be valid so long as the intent of the Settlor can be determined. For example, if the original Trust had Trustee appointment under Section 2, and the Trust restatement changed the order of Trustees, a later Trust amendment can still affect Section 2 and name new Trustees.

On the other hand, if the amendments used language stating that they were altering the Trust restatement, and that restatement is later invalidated, then the amendments will be irrelevant at that point.

It can all be a bit confusing. The best approach is to map out each amendment separately and try to determine, based on the language of the document, what was meant to be changed. Once you understand that point, then you are well on your way to putting the puzzle pieces of your Trust together.