When and Why You Should Review Your Trust

Since estate planning tends not to be at the forefront of a person’s mind, time can fly by before the essential documents are reviewed and updated. However, it is important to review your estate planning documents every once in a while to ensure that they are still relevant.

It is advisable to meet regularly with an estate planning professional who can help review your trust document and to update it wherever necessary. This should be done at least every 3-5 years, depending on your circumstances.

Furthermore, you should seek help to review your trust whenever one of many events occurs that should trigger an immediate review of your trust and other estate planning documents.

Events That Should Trigger a Review of Your Trust

The following events are the clearest changes and life moments that should tell you it is time to seek professional help to review and/or update your trust and other estate planning documents:

Marriage or Divorce

All too often people fail to realize the significant legal consequences and changes that occur upon marriage or divorce. It is very unlikely that you will get married or divorced without disturbing your wishes for the distribution of your property after you die.

Besides that, marriages and divorces present many unique estate planning concerns and introduce more issues. You obviously want to ensure that your new family is provided for but you also need to take care to address any children or spouses from your previous marriages.

This is why marriage and divorce is one of the main times in life where your trust document should be reviewed and updated.

Having Kids

Making sure that any children born or adopted into your family are provided for in your trust will clear up any confusion (particularly in multiple marriage cases) that these children are entitled to a portion of your estate.

If you have minor children, then providing for them in your trust becomes especially important. If you have not yet at least made a will to select a guardian, the state will dictate who will get guardianship over your child.

Furthermore, once your child grows up and gets married, you may want to update your trust to put some protections in place. It is rarely desirable to have your child’s spouse affect how you distribute your estate, but that can be a common result of poor estate planning.

You may also wish to give your children more responsibility as they get older. For example, you may want to name them as the successor trustees of your trust.

A Change in Business Interests

If you start, transfer, or wind up a business, this is also a major life event that should compel you to make or update your estate plan. Family businesses often include several generations of the family with all kinds of roles in the company, from shareholder to employee.

This area of estate planning is called “business succession planning” and has to do with how to effectively have your children take over your business after you die. Nowhere in estate planning is there more potential for confusion than with business succession planning. This is why it is important to review and/or update your trust with the help of a seasoned estate planning professional whenever there is a change in the makeup or ownership interests in a business you own.

Buying a Home

Acquiring a home or real property results in a large increase in the value of your estate and any such gain or loss will affect your beneficiaries’ shares and how much you can leave to them after your death.

When you buy or sell a home, you should consider making your living trust its legal owner. This can significantly decrease the likelihood that your estate will have to go through a probate proceeding.

Buying a home also usually means moving. If you move out of the state you may be moving somewhere with vastly different laws governing estate planning and marriage. In these cases, you will need to update your trust to address these changes.

A Health Scare or Close Call

A serious injury or illness can make you realize that you will not be here forever and that you need to arrange for the support of your loved ones after you are gone.

Facing this realization, you will want to ensure that you have prepared properly for your death. In addition to many other important things, this means reviewing and/or updating your trust and other estate planning documents.

It’s Been too Long Time

A lot of things can change over time. These include laws relevant to estate planning, your health and the health of family members, relationships (such as a marriage or divorce within your family), your personal priorities (including charitable giving), and many other factors that will affect how you want to distribute your estate. It is important to make sure that your trust and all of your estate planning documents are up to date, address your loved ones’ most current needs, and reflect your wishes.

Contact an Experienced Estate Planning Attorney

To learn more about how to plan for your estate, contact an experienced estate planning attorney to arrange a free consultation. For help getting started with your estate plan, contact us or sign up below for one of our events.

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