Though California is an expensive state in which to live, it is also home to plenty of residents who manage to acquire enough property and other assets to justify placing them in a trust.
Revocable vs. irrevocable trusts
There are several options when it comes to trusts, including revocable and irrevocable trusts, both of which are living trusts. As the name suggests, irrevocable trusts cannot be changed after they are created. Revocable trusts can either be revoked entirely or amended by the trustor, the person who created the trust. If two people, such as spouses, are co-trustors, either one can revoke the trust whenever he or she wants to, but both spouses must sign off on any changes made to the trust.
Making changes to your trust
Some people may want to revoke a trust if they plan to make significant changes to it in order to avoid confusion. However, revoking one trust, withdrawing the funds, creating a new trust and re-depositing the funds can be more trouble and cost than it is worth.
For small changes to a trust, a trust amendment is probably sufficient. Another option is a trust restatement. A trust restatement clarifies that the original trust is not being revoked but that it is being restated with amendments. If someone wants to avoid having to make frequent changes to the trust whenever additional property is acquired, he or she may want to ask an estate planning attorney about a pour-over will, which would allow assets owned at the time of death but not accounted for in the trust to be “poured” into the trust.
An estate planning attorney may also help clients weigh the pros and cons of creating a living trust as opposed to another type of trust.