It is important to revisit your trust.
Most things in life require maintenance.
A car needs its oil changed and will require parts to be replaced as road use wears them down.
Homes require new coats of paint, cleaned gutters, and constant lawn mowing.
Even the human body benefits from dentist appointments, annual physicals, and proper diet and exercise.
According to a recent Santa Cruz Sentinel article titled “Revisit trust on a regular basis,” a trust can be impacted both by personal and societal factors.
Because your life and laws change, you will need to revisit your trust regularly to see if updates need do be made.
What are common areas to review on your trust documents?
Table of Contents.
This area will help you quickly navigate the different elements of your estate plan.
An important place to look is for language mentioning Successor Trustees.
As you revisit this section, consider whether the people you appointed as trustees are still alive or whether you still consider them to be trustworthy.
Remember, these people also need to be able to manage money well or know to get professional assistance.
Do these individuals have good relationships with your loved ones?
If no, this could lead to avoidable issues when managing your trust for the benefit of your beneficiaries.
The Section Covering the “Disposition on Death” or “Disposition on Death of Surviving Spouse.”
The plan may no longer fit with the needs of your loved ones.
Beneficiaries who have died should be removed.
If a family member was diagnosed with a disability and receives benefits from the government, you could jeopardize their eligibility through an outright inheritance.
Alternatively, you may find you have a loved ones who are not trustworthy to handle an inheritance on their own.
This could be for a variety of reasons like entering a bad marriage, developing an addiction, or handling money poorly.
You may need to revisit the terms of your trust to provide incentives or stipulations around the money provided to these heirs to protect them from the inheritance and the inheritance from them!
The “Schedule of Trust Assets.”
If you have moved since your trust was created, this section definitely needs to be updated.
If your past home is still listed, you will need to remove it.
Revisit whether your retirement accounts have accurate information.
Additionally, you will need to review what needs to be placed in the trust.
This could include your new home or other new assets.
Failing to do so can be an expensive mistake.
In addition to these sections, you will also want to consider important questions as you revisit your trust.
One question is “What happens between the death of one spouse and the death of the survivor?”
One way trusts handle this is to have an A/B trust.
This allows the content of the trust belonging to the deceased spouse to be split between a Survivor’s Trust and a Bypass Trust or Exemption Trust.
However, your circumstances my be such that instead of an A/B trust, relying on “portability” for estate tax planning may be more advantageous.
Another question involves the health outlook for you and your spouse.
Is it likely one of you will require nursing home care?
If so, you may want to revisit your trust with funding long-term care in mind.
Working with an experienced estate planning attorney and reviewing your trust regularly is essential to ensuring your affairs are in order if you become incapacitated and when you die.
Reference: Santa Cruz Sentinel (Nov. 20, 2021) “Revisit trust on a regular basis”