After a trust is formed, the life situations of the people who created it might change. A couple might go through a divorce. One or more family members might die. Someone might get married and change their name. A politician, business executive or other person who set up a blind trust might retire and no longer need the trust to remain blind. Any of these circumstances might prompt a need or desire to change the trust's name.
You might be able to change the name of the trust, the beneficiaries or the trustees, depending on the type of trust you've formed. Reviewing how to change the name of a trust will help you better understand the process as you work with your attorney and trustee.
What Is a Trust?
According to the IRS, a trust is a financial arrangement that has one person (called a trustee) managing and safeguarding the assets of another person, persons or group (a beneficiary). Parents might want to put money into a trust for their children to protect their assets in the event they die while the children are still minors.
Irrevocable vs. Revocable Trusts
A trust can’t be changed in some cases. Those that can't are known as irrevocable trusts. The assets are held in the name of the trust, not in the names of the trustee or trustees. The trustee cannot be the grantor, the person who set up the irrevocable trust (such as a parent managing a revocable trust). It must be a third-party administrator who manages the trust.
The grantor can act as trustee of their revocable trust. They can change the trust's terms at any time and even revoke the trust if they choose. These types of trusts offer more flexibility but they offer no protection from estate taxes as irrevocable trusts do. Any income earned by these trusts is reported on the grantor's personal return and income tax is paid by the grantor.
What Is a Blind Trust?
A blind trust allows a person to have their assets managed by a reliable third-party manager who does not share information about the assets with the person who owns them. This helps politicians who have to vote on issues that might affect their stock holdings. If the politician doesn’t know what stocks they own, they can’t be accused of voting on legislation to help their stock holdings.
What Is a Living Trust?
A living trust is one that's created while you’re alive, according to the American Bar Association. It designates who will receive them when you pass. Your trust will pay your living expenses (such as your medical care) until you die if you become physically disabled or mentally incapacitated if it's revocable or if these terms were included in your irrevocable trust formation. You would typically name a successor trustee to manage your revocable living trust for you if you act as trustee during your lifetime and in the event you become incapacitated.
A living trust is the opposite of a testamentary trust, which is formed under the terms of a last will and testament. It doesn't exist yet and therefore isn't active during the grantor's lifetime.
Changing a Trust Name
Depending on the type of trust you have, you might not be able to change the terms, the beneficiaries or even the name of the trust. You can sometimes dissolve an irrevocable trust with a court order and start a new one if all parties to the trust agree. The same process would allow you to modify a trust, such as to change its terms, participants or name.
An attorney will have to create the paperwork to change the name of any trust, which should include the current trust name, terms and parties to the trust. The attorney will describe the change or changes being proposed and provide signature and date lines for each participant to sign. In some cases, the attorney might require the document to be witnessed or to have individual signers get their signatures notarized.
If you are changing the name of a person who is a party to the trust, check to see if the original trust document has a provision for handling the death of a party to the trust or a name change (such as when someone gets married or divorced).
A personal name change should be easier to accomplish even with an irrevocable trust because you're not changing the terms or parties to the trust. You're simply clarifying the correct identity of one of the trust participants. But you might have to form a new living trust, give it a new name, and transfer the assets from the old trust to the new trust, depending on the circumstances.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.