The Importance of Regular Trust Document Reviews
A trust is a legal document that allows you to manage your assets and dictate how they will be distributed after you pass away. It is an important tool for estate planning and can help you achieve your goals for passing on your wealth to future generations. However, life changes and so should your trust. That's why it's important to review your trust documents on a regular basis to ensure they still meet your estate needs.
Why Review Your Trust Documents?
As a licensed Fiduciary I’ve seen and administered many Trusts and have experienced first-hand the disappointment of beneficiaries (usually adult children) when they learn that the Trust doesn’t accurately reflect their current family situation or excluded important assets. By reviewing your Trust on a regular basis you can ensure that your wishes are appropriately and accurately represented. Important reasons for reviewing your trust documents periodically include:
Changes in Estate Tax Laws: Estate tax laws are constantly changing, and your trust document should reflect those changes. If you don't update your trust to reflect the most recent tax laws, you could end up leaving a smaller portion of your estate to your beneficiaries than you intended.
Changes in Your Family Circumstances: Your family circumstances can change over time, and your trust should reflect those changes. For example, you may have a new grandchild or your spouse may have passed away. Your trust document should be updated to reflect these changes and ensure that your assets will be distributed in the manner that you want.
Changes in Your Assets: Over time, your assets may change. You may sell a property or acquire new investments. Your trust document should be updated to reflect these changes and ensure that your assets will be managed and distributed in accordance with your wishes.
Keeping Your Trust Up-to-Date: Regular trust document reviews help keep your trust up-to-date and ensure that it will be effective in accomplishing your goals. It also gives you peace of mind knowing that your estate will be handled exactly as you wish.
How to Review Your Trust Documents
To review your trust documents, you should start by reviewing the document itself and making note of any changes you would like to make. If you are unsure about the changes you would like to make, you can seek the advice of an estate planning attorney.
Once you have identified the changes you would like to make, you should work with your attorney to draft the necessary amendment to your trust document. Your attorney can help you ensure that the amendment is legally sound and meets your goals.
When to Review Your Trust Documents
It is recommended that you review your trust documents every three to five years, or whenever you experience a significant life change, such as the birth of a child or the death of a spouse. By reviewing your trust documents on a regular basis, you can ensure that your assets will be managed and distributed in accordance with your wishes.
In conclusion, a trust is an important tool for estate planning, but it's important to keep it up-to-date. By reviewing your trust documents on a regular basis, you can ensure that your assets will be managed and distributed in the manner that you want, and that your trust will remain effective in accomplishing your goals. If you need help reviewing your trust documents, contact an estate planning attorney today.