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My aunt wants to help her mother amend her trust. The mother wants to completely eliminate two grandchildren from her trust. She had originally wanted to gift the two kids with $500k each upon her death. Now, she does not want to leave them anything. The main question is what kind of steps must she take to legally amend the trust. We think we only need to make the change to the paper trust and get it notarized. Is this correct?
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With a million dollars at stake, and nothing to lose, the two grandchildren will have great incentives to challenge whatever is done. As a practical matter (and assuming you don't want to face a court battle when grandma dies), you should fully document this amendment.
Do a formal amendment or - better yet - have grandma completely restate the trust so the prior $500,000 gifts don't even appear in the document.
Be ready to prove that grandma acted of her own free will, was not unduly influenced by anyone, and had full mental capacity to do what she is doing. If there is any doubt about these things, get an expert's opinion and do it now. If grandma is able, she should contact her lawyer directly (and not through your aunt or your mother), and meet with her lawyer alone.
If there is some reason that grandma wants to leave the grandchildren nothing, when she had been so generous before, consider having grandma write down those reasons. (Note, however, that grandma could demonstrate her lack of capacity - if that is a potential issue - by doing so.)
Consider leaving the grandchildren something - say $50,000 each - and provide a no-contest provision so that they have something to lose if their contest fails.
Answered on Dec 06th, 2013 at 5:17 PM