Life changes and laws change too. The great trust created two decades ago may not be a good idea today and may no longer be suitable for you or your beneficiaries. As a general rule, you should review your estate plan and trust every other year, according to the article “Revisit trust on a regular basis” from the Santa Cruz Sentinel.
Start with the Table of Contents, if there is one. There should be language concerning “Successor Trustees.” Are the trustees you named still alive? Are they still part of your life, and do you still trust them? How are their money skills? If they don’t get along with the rest of the family or have been involved in a series of petty disputes, they may not be appropriate to manage your trust. Don’t be afraid to make changes. Your estate planning attorney will know how to do this smoothly and correctly.
Next, find the paragraph that discusses “Disposition on Death” or “Disposition on Death of Surviving Spouse.” Does it still make sense for your loved ones? Have any children or family members who are listed as receiving benefits died? Are any heirs disabled and receiving government benefits? Have any of your children developed addictions, problems handling money, married people you don’t trust or are preparing to divorce their spouses? You can make changes to protect your children from themselves and others in their lives.
Look for a “Schedule of Trust Assets.” When was the last time you updated this? If you’ve moved and the trust still lists your previous residence, you need to change it. Is your new home in the trust? Are retirement accounts correctly listed? Do you have new assets you’ve never placed in the trust? Not including new assets is a common and costly oversight.
If married, how does the trust address what occurs between the death of the first spouse and the surviving spouse? Do you have an A/B trust to divide everything between a Survivor’s Trust and a Bypass Trust or Exemption Trust? Maybe you don’t need or want an A/B trust anymore. Talk with your estate planning attorney to ensure this is appropriately structured for your life right now.
How is your health? If you or a spouse are in a nursing home or if one of you is ill and likely needs nursing home care, it may be time to start planning for a Medicaid Asset Protection Trust.
While you’re reviewing your trusts, trustees, and beneficiaries, don’t forget to check the people named as beneficiaries for your retirement accounts and life insurance policies. You should review these accounts regularly as well.
Regularly reviewing your trust and estate plan is just as necessary as an annual physical. Leaving your accumulated assets unprotected is easily fixed while alive and healthy.
Reference: Santa Cruz Sentinel (Nov. 20, 2021) “Revisit trust on a regular basis.”