When Should a Trust Be Reviewed?
Many people mistakenly believe that once a trust is created, no further action is needed. This assumption is incorrect. A trust established years ago may no longer serve your current circumstances effectively.
Life evolves, and so do laws. An excellent trust from two decades ago might be unsuitable today for you or your beneficiaries. As a general guideline, review your estate plan and trust every other year.
Examining Key Trust Components
Successor Trustees
Start by reviewing the Table of Contents and locating language about “Successor Trustees.” Verify that your named trustees are still living and actively part of your life. Consider their financial management abilities. If they have experienced family conflicts or money-handling difficulties, they may not be appropriate trustees. You have the right to make changes, and your estate planning attorney can implement these modifications smoothly.
Disposition Provisions
Find the section discussing “Disposition on Death” or “Disposition on Death of Surviving Spouse.” Assess whether current distributions still align with your family’s needs. Have any listed heirs passed away? Do any beneficiaries receive government assistance due to disabilities? Have children developed addiction issues, demonstrated poor financial judgment, married individuals you distrust, or face potential divorce? Changes can protect your children from poor decisions and adverse influences.
Schedule of Trust Assets
Locate your asset schedule and determine when it was last updated. If your residence has changed but the schedule still lists your former home, an update is necessary. Verify that your current home is properly titled in the trust. Confirm that retirement accounts are correctly listed and that new assets have been added. This oversight can prove costly.
Married Couple Considerations
Examine how your trust addresses the period between the first spouse’s death and the surviving spouse’s passing. Do you maintain an A/B trust dividing assets between a Survivor’s Trust and a Bypass Trust? Your current situation may no longer warrant this structure. Consult your estate planning attorney about proper structuring for your present circumstances.
Health Status Changes
If you or your spouse are in a nursing home or anticipating such care, consider establishing a Medicaid Asset Protection Trust.
Additional Review Items
While reviewing your trust, beneficiaries, and trustees, do not overlook the designated beneficiaries for retirement accounts and life insurance policies. These require regular review as well.
Key Takeaway
Regular trust reviews are as essential as annual physical examinations. Protecting your accumulated assets is straightforward when addressed while you are healthy and capable. Contact an experienced estate planning attorney to schedule a review of your trust and ensure it still reflects your wishes and current circumstances.
