The situs of a Trust — i.e. the location of its forming — may be a key element when designing an Irrevocable Trust, a Legacy Trust, a Self-Settled Trust or a trust that provides asset protection under a state’s common law or statutory law.

But for a basic Revocable Living Trust, the situs is less important.

The main goal of a basic Revocable Living Trust (the one offered by Standard Legal) is probate avoidance. Investment, sophisticated estate planning, creditor protection and tax planning are not primary concerns or goals under a basic Revocable Trust.

Certain states, like Delaware, Nevada, South Dakota and Ohio (among others), have revised (or enacted new) trust codes to add features providing for creditor protection, low or no state income tax and the ability to establish a types of trusts that allow for assets to pass to more than one future generation.

Due to the way a basic Revocable Trust is established (i.e. created for probate avoidance rather than tax planning, investment and creditor avoidance purposes), it may not qualify for the tax avoidance and creditor protections provided for in states such as Delaware, Nevada, South Dakota and Ohio.

Stated another way, the situs of a basic revocable trust is less important since the trust itself may not qualify for (and was not created or intended to qualify for!) the favorable tax, investment and creditor protection laws provided to irrevocable trusts, legacy trusts or self-settled trusts in those states listed above.

That being said, the Grantor can still change the situs for a Revocable Living Trust if desired, including the documents offered by Standard Legal. Simply modify the Trust documents using an Addendum or restate the Trust Agreement. For example, the Grantor may include language in an Addendum indicating that “the situs of this Trust shall be [name of State]. The principal place of administration of this trust shall be [name of State of situs]. The trustee of this trust shall have the authority, in the Trustee’s sole and absolute discretion, to transfer the trust’s principal place of administration, without any notification to any beneficiary of such trust, if the Trustee believes it to be in the best interests of the trust to do so. And upon a change of place of administration of this trust, the law of [name of State of administration] shall continue to govern its validity and construction, but the law of the new situs shall govern the administration thereof.”

NOTE that the language indicated above is for illustrative purposes only; careful consideration must be used when modifying any terms of a trust. There can be significant legal and tax ramifications when using trusts for sophisticated estate and tax planning. Careful consideration must be given to the type of trust chosen and any modifications to the same. Legal and tax advice should be sought in these situations.