Although most people realize they need to have estate planning documents in place, many delay because of the concern that once executed, the documents cannot be modified.
Although documents should carefully be drafted so they will last as long as necessary, estate planning should reflect the life of the individual. Documents also must have the flexibility to change when necessary. Each type of document, and the specific language within the document, will determine the way the document can be amended.
It should be noted, only those with mental capacity to make informed decisions shall retain the right to modify documents.
A last will and testament usually is the simplest document to amend. Although the amendment, called a codicil, requires the same formality as a will, the codicil itself generally is a simple statement of changes.
Codicils are a good way to make small changes. They most often are used to change the executors or to modify the way in which a beneficiary receives property. For people who executed last will and testaments when their children were minors, codicils provide a simple update.
Occasionally, a codicil is not the best option. Because a codicil accompanies the original last will and testament, it should not be used to reduce a beneficiary’s share or to remove a beneficiary entirely unless the beneficiary has died or is in agreement with the change. For significant changes such as the removal of a beneficiary, the individual should create a new last will and testament.
Allowing a beneficiary to see what he would have been receiving prior to the amendment may be setting your estate up for a contested will.
Powers of attorney generally are drafted as new documents rather than amended. The new powers of attorney clearly should revoke all previous powers of attorney documents and notice must be sent to revoked agents. Every institution that was given a copy of the prior powers of attorney should be given copies of the new documents and instructed that the old documents are no longer valid. Institutions and agents not advised of the revocation cannot be held liable if they continue to act on the old documents.
If a durable general power of attorney was recorded at the county clerk’s office, the new document should be recorded there as well.
Revocable living trusts, such as last will and testaments, are amended easily. However, the language of the trust document will determine who may amend the trust and to what extent. Generally, the grantor retains the right to modify any part of the trust, so long as he or she retains mental capacity. Like a power of attorney, amendments should be given to necessary parties, such as trustees and successor trustees. If changing trustees, amendments also should be given to financial institutions where trust funds are held.
Even irrevocable trusts may be modified, although not quite as easily as the other documents. irrevocable trusts often include provisions for a trust protector, who may be appointed in a fiduciary capacity to modify provisions in the trust. The trust protector is limited as to what he or she can amend, but might have authority to make amendments that will further the grantor’s intent. The grantor of the trust usually retains the right to change the beneficiaries. Without trust protector provisions, a court might be required for changes to an irrevocable trust.
Most estate planning documents, while created with the intent to last a lifetime, can be modified as your life changes. Do not let the fear of needing changes later prevent you from creating your estate plan today.