diff --git a/src/fsm.c b/src/fsm.c
index 342542f..c5256da 100644
--- a/src/fsm.c
+++ b/src/fsm.c
@@ -214,9 +214,30 @@
 		}
 		osmo_talloc_replace_string(fi, (char **)&fi->id, id);
 
+		if (fi->name)
+			talloc_free((void*)fi->name);
+
+		if (!fsm_log_addr) {
+			fi->name = talloc_asprintf(fi, "%s(%s)", fi->fsm->name, id);
+		} else {
+			fi->name = talloc_asprintf(fi, "%s(%s)[%p]", fi->fsm->name, id, fi);
+		}
+
 		return 0;
 	}
-	return -EINVAL;
+
+	if (fi->id)
+		talloc_free((void*)fi->id);
+	fi->id = NULL;
+	if (fi->name)
+		talloc_free((void*)fi->name);
+
+	if (!fsm_log_addr) {
+		fi->name = talloc_asprintf(fi, "%s", fi->fsm->name);
+	} else {
+		fi->name = talloc_asprintf(fi, "%s[%p]", fi->fsm->name, fi);
+	}
+	return 0;
 }
 
 /*! allocate a new instance of a specified FSM
@@ -244,19 +265,6 @@
 		}
 	}
 
-	if (!fsm_log_addr) {
-		if (id)
-			fi->name = talloc_asprintf(fi, "%s(%s)", fsm->name, id);
-		else
-			fi->name = talloc_asprintf(fi, "%s", fsm->name);
-	} else {
-		if (id)
-			fi->name = talloc_asprintf(fi, "%s(%s)[%p]", fsm->name,
-						   id, fi);
-		else
-			fi->name = talloc_asprintf(fi, "%s[%p]", fsm->name, fi);
-	}
-
 	INIT_LLIST_HEAD(&fi->proc.children);
 	INIT_LLIST_HEAD(&fi->proc.child);
 	llist_add(&fi->list, &fsm->instances);
diff --git a/tests/fsm/fsm_test.c b/tests/fsm/fsm_test.c
index f70b0b5..d7b08ae 100644
--- a/tests/fsm/fsm_test.c
+++ b/tests/fsm/fsm_test.c
@@ -196,6 +196,10 @@
 	finst = foo();
 	OSMO_ASSERT(osmo_fsm_inst_find_by_id(&fsm, "my_id") == finst);
 	OSMO_ASSERT(osmo_fsm_inst_find_by_name(&fsm, "Test_FSM(my_id)") == finst);
+	OSMO_ASSERT(osmo_fsm_inst_update_id(finst, "another_id") == 0);
+	OSMO_ASSERT(osmo_fsm_inst_find_by_id(&fsm, "another_id") == finst);
+	OSMO_ASSERT(osmo_fsm_inst_find_by_name(&fsm, "Test_FSM(another_id)") == finst);
+	OSMO_ASSERT(osmo_fsm_inst_update_id(finst, "my_id") == 0);
 
 	while (1) {
 		osmo_select_main(0);